Cost Center in SAP | Cost Center Accounting - Overview

Cost Center in SAP reflect the organizational structure of a company and display the areas of responsibility. The cost center structure is ... CostCenterinSAP(CostCenterAccounting)–DetailedOverviewPublishedbyPradeeponJanuary13,2022January13,2022LastUpdatedonMarch23,2022byPradeepWhatisCostCenterinSAP?CostCenterinSAPreflecttheorganizationalstructureofacompanyanddisplaytheareasofresponsibility.Thecostcenterstructureisveryimportantbecauseitdefinesthebasisforothermodulesandoverheadreporting.HowtoactivateCostCenterAccountinginSAPBeforeusingCostCenterAccounting,weneedtoactivateitinControllingArea.TransactionCodeOKKPorIMG.Then,followthebelowsteps:-OpentheActivateComponents/ControlIndicatorsfolderontheleftsideofthescreen.IntheActivateComponentsSelection,chooseComponentActivefromtheCostCenterfield.Ifyouselecttheaccountassignment:activitytype(AA:ActivityType)checkbox,thesystemallowsyoutoassigncostsdirectlytotheactivitytypeofacostcenter.Thisisadvantageousifyouhavemorethanoneactivitytypeassignedtoacostcenterandwanttouseautomatedactivitypricecalculation.WhatisCostCenterMasterDataCostcenterrepresentsanareaofresponsibility,thatisanorganizationalunitwithinanorganization.WehavetoassignallcostcenterstoacostcentercategorytocreatecostcenterMasterData.Weusethecostcentercategoriesinboththeactivitytypeplanninganddefaultspecificcharacteristicswhencreatingacostcenter.IMG=>Controlling=>CostCenterAccounting=>MasterData=>CostCenter=>DefineCostCenterCategories.KnowallimportantSAPFICOTcodesHowtocreateCostCenterMasterData?Afteryouhavecheckedthecostcentercategoriesandadjustedthemtomeetyourrequirements,youcanfinallycreateacostcenter.TodothisgotoTransactionKS01orfollowthemenupathAccounting=>Controlling=>CostCenterAccounting=>MasterData=>Costcenter=>IndividualProcessingWecreateCostcentersbycontrollingareasandhavingavaliditydate.Wecan’tassignanumberrangetothecostcenter,butithasprovenusefultostartthecostcenterwiththecompanycodenumberfollowedbyasequentialnumber.Thisconsequently,allowstheusertoeasilyidentifythecostcenterofaspecificcompanycodewithinthecontrollingarea.Further,enterthenumberofthecostcenteryouwanttocreateandadjustthevaliditydate.IntheBasicDataTab,weneedtomaintainanameandadescriptionforthecostcenterintheNameSection.ThisthencreatesacostcenterforUtility.ImportantFieldsofCostCenterMasterWecanentertheuserwhoisresponsibleforcontrollingthiscostcenter.UserResponsibleWecanentertheuserwhoisresponsibleforcontrollingthiscostcenter.Bypressing(F4)wecansearchforusersinthesystem.Thisfieldisnotmandatory.PersonResponsibleThepersonresponsibleisamandatoryfieldandthereisnoinputhelp.Inthisfield,weenterthepersonthatisresponsibleforthebudgetandtheactualcostsonthiscostcenter.DepartmentWecanassignthecostcenteradepartment.Thisisnotamandatoryfieldandthereisnoinputhelp.CostCenterCategoryThecostcentercategoryisamandatoryfieldthatdefaultssomecharacteristicsofthecostcenter.Wecanuseitinactivitytypeplanning.HierarchyAreaWeneedtoassigneveryCostCentertoahierarchyarea.Wecanentereitherthetop-notchofthehierarchyorasubnotchofthecostcenterhierarchy.Thesystemchangestheassignmentautomaticallyinthisfieldifwemovethecostcentertoanothernotchinthehierarchy.CompanyCodeWemustassignallcostcenterstoacompanycode.BusinessAreaTheBusinessareaisanorganizationalunitwithintheFinancialAccountingmodule.SAPrecommendsnolongerusingtheBusinessareaandinsteadofusingprofitcentersandsegments.However,ifyouwanttousethebusinessarea,youneedtoactivatethescenarioFIN_GSBERinyourleadingledger.Related:ScenariosinSAPGeneralLedgerFunctionalAreaTheFunctionalareaisanorganizationalelementusedtodisplaytheP&Lstatementincostofsalesaccounting.CurrencyThecurrencyisdefaultedbythecontrollingareacurrency.Ingeneral,thesystemmaintainsacostcenterinthecompanycodecurrency.Wecanchangethecurrencyonlyatthebeginningofthefiscalyear.ProfitCenteranditsconnectionwithCostCenterinSAPSometimesweactivateProfitCenterAccountingscenariointheFinancialAccountingmodule.OrweuseclassicProfitCenterAccounting.Inthatcase,thesystemexpectsanentryintheProfitCenterfield.However,ifwedon’tassignaprofitcentertothecostcenter,thesystemexecutesawarningmessage.CostCenterStandardHierarchiesWemustdefineacostcenterstandardhierarchyforthecontrollingareawhenweactivatecostcenterAccounting.Thestandardhierarchyisequivalenttoacostcentergroupthatcontainsallcostcenterswithinthecontrollingarea.Itcanalsocontainmultiplecostcentergroupsandrepresentthestructureofthecompany.CostCenterGroupsWecancreateCostCentergroupstodisplaycostcentersindifferentstructuresbygoingtoTransactionCodeKSH1.Thesegroupscanbeupto15characterslong.Specialcharactersarenotallowed.SAPHANAinCostCenterAccountingSAPS4HANAFinanceoffersnewlineitemreportsinCostCenterAccountingwhenactivatingthecorrespondingacceleratorscenario.Youmaybeinterestedin:SAPS4HANAFinanceTrainingConclusionSincewiththeCostCenterAccountinginSAP,youcananalysetheoverheadcostsoftheorganization,itgivesyouacompleteholdovercostmanagementanddefinesabalancedapproachtowardsthecompany’scost.Alongwithprovidingabroadoverview,italsohelpstoanalysetheprofitabilityofeachfunctionalareaandamoreaccuratedecisionmaking.ItisthejobofanSAPFICOconsultantthathandlesthecostcenteraccountinginSAP.SotheconsultantmustknowtheSAPManagementAccountingpartverywelltohandlethecostcenterperfectly.Further,Asitiscloselyconnectedwithprofitcenterpartaswell,soaknowledgeofthataswellishighlyrecommendedforefficientworking.IfwecompareECCvs.S4HANA,thereisnodifferenceinfunctionalityforCostcenterinSAPinboth.Hence,anSAPS4HANAFinanceconsultantalsoisexpectedtohaveasimilarkindofknowledgeonCostcenter.SolearningitisequallyimportantforS4HANAFinanceconsultantsaswellasforSAPFICOconsultants.Learn:HowtogetajobinSAPFICO?Categories:SAPControllingSAPFICOSAPHANASAPS/4HANAFinanceTags:costcenteraccountingsapcoSAPControllingsapcostcentersapcostmanagementSearchfor:KnowPradeepHota OnlineTrainingSAPS/4HANAFinanceTrainingSAPFICOTrainingonS/4HANA SAPCentralFinanceTrainingSAPProductCostingTrainingPolularPostsDifferencebetweenSAPFICOandS/4HANAACareerinSAPFICOAssetAccountinginSAPFICOSAPCOInterviewQuestionsBestSAPFICOInterviewQuestionsSAPProductCostingInterviewQuestionsUniversalJournalinSAPSAPHANAMigrationGuideCategoriesSAPCentralFinanceSAPControllingSAPFICOSAPFICOInterviewQuestionsSAPHANASAPHANAOnlineCoursesSAPProductCostingSAPS/4HANAFinanceUncategorizedRecentPostsCostObjectControllinginSAP-AQuickGuideIntegratedAssetAcquisitioninSAP–ProcessFlowSAPManagementAccounting(SAPCO)–CompleteGuideSubscribeMyBlogRelatedPostsSAPControllingCostObjectControllinginSAP-AQuickGuideWhatisCostObjectControlling?Costobjectcontrollingenablesyoutodeterminethecostofgoodsmanufacturedandsoldgoods.Inthisblog,wecollectandanalyseplannedandactualcostsonindividualcostobjectsReadmore…SAPFICOIntegratedAssetAcquisitioninSAP–ProcessFlowWhatisIntegratedAssetAcquisitioninSAP?WhenweprocureassetsthroughthelogisticsmodulewithPO,wecallitIntegratedAssetAcquisitioninSAP.Thus,itisapartofExternalAssetAcquisition.ExternalReadmore…SAPControllingSAPManagementAccounting(SAPCO)–CompleteGuideWhatisSAPManagementAccounting?SAPManagementAccountingonS/4HANAfollowsthecompleteprocessofSAPCOalongwithusingtheadvancementofS/4HANAtechnology.ItisbasedontheHANAplatform,whichworksonReadmore…