Internal Order

1. BASIC CONCEPTS
1.1 What is Internal Order?
Internal Order is a cost object, which collects costs for management information system
and, in some instances, revenues for an organization.
Internal orders can be used to
• Monitor the costs of short-term measures
• Monitor the costs and revenues related to a specific service
• Monitor ongoing costs
Internal orders are divided according to function into the following categories:
• Overhead Orders: Overhead orders monitor sub areas of indirect costs
arising from short-term measures. They can also be used for detailed
monitoring of ongoing plan and actual costs independently of organizational
cost center structures and business processes.
• Capital Investment Orders: Capital investment orders monitor investment
costs, which can be capitalized and settled to fixed assets.
• Accrual Orders: Accrual orders monitor period-based accrual between
expenses posted in Financial Accounting and accrual costs in Controlling.
• Orders with Revenues: Orders with revenues monitor the costs and revenues
arising from activities for partners outside the organizational boundaries, or
from activities not belonging to the core business of the organization.

1.2 What is Order Type? What are the parameters it controls for internal
order?
An order type contains many kinds of control information that is important for
managing orders. This includes many default values that can be called upon when we
create a new order with this order type. We must assign each order to an order type
that transfers specified parameters to the order.

The order type is client-specific, which means that every order type can be used in all
controlling areas.

The order type control / determines the following fields for an order:
Order Category
Number Assignment
Control Indicator
Co Partner Updating
Order Classification
Commitment management
Revenue Posting
Integrated Planning
Settlement Profile
Planning Profile
Budget Profile
 Internal Order

Status Management

1.3 What is Order Category?

A technical classification criterion for orders. The order category determines the SAP
application to which an order belongs, and controls the functions with which an order
can be processed. SAP has provided standard order category these are
01 - Internal Order (Controlling)
02 – Accrual Calculation Order (Controlling)
03 – Model Order (Controlling)
04 – Co Production Orders
05 – Product Cost Collector
Etc…

1.4 What is Settlement Profile?

In settlement profile we are defining a range of control parameters, how the order will
be settle to other cost object. We must define the settlement profile before we can
enter a settlement rule for a sender.
In settlement profile, we define the following parameters:
Permitted settlement receivers (such as cost center or asset)
Default values for the settlement structure and the PA transfer structure
Allocation bases for defining the settlement shares (using percentages and/or
equivalence numbers)
Maximum number of distribution rules
Retention period of the settlement documents
Document type for settlements relevant to accounting, or, more
specifically, to the balance sheet.
Definitions for the settlement of actual costs or the cost of sales

1.5 What is Planning Profile?

This profile contains parameters and default values for overall planning. We can also
assign an order type to the planning profile at a later date.
We need planning profiles for the planning methods below:
o Overall planning for internal orders
o Hierarchy cost planning for projects
o Preliminary costing for production orders that do not have a quantity structure
(CO production orders).
o Cost planning for investment programs or investment measures, and for
appropriation requests.
o Financial budgeting

1.6 What is Budget Profile?

Budgeting with in SAP provides the user with enhanced project management
capabilities not provided by internal order planning. Where an internal order planning
is an estimate of expenditure made at the beginning of the fiscal year, a budget
represents the actual approved amount of funding for a given order. Because the
 Internal Order

budgeted amount is maintained separately we have an opportunity to do plan versus

budget comparisons. This profile contains parameters and default values for
budgeting. We can also assign an order type to a budgeting profile at a later date.

1.7 What is Reference Order / Model Order?

Model order is not a real order in the commercial sense. It is customized with certain
default values, to reduce time and efforts while creating real internal order. Model
orders contain default values for the orders in an order type. We need to enter the
model order as the reference order in the order type. When we create a new order, all
the fields active in the relevant order type are copied from the model order to the new
order. Model orders make the work of entering new orders considerably easier. The
data that recurs in orders from a particular order type is already defined. This
reduces the likelihood of errors.

1.8 What is Settlement Rule?

The settlement rule determines what portions of a sender's costs are to be settled to
which receiver(s). We specify this by assigning one or more distribution rules to
each sender. Typically there is one distribution rule for each receiver. This is carried
out at order level.

1.9 What is availability control in Internal Order?

It is process where user of the internal order will caution at a particular point of time,
when order cost reached at a particular stage. The Idea behind availability control is
that SAP should alert us when we are about to exceed some predefined percentage of
the budgeted amount. This activity is carried out through the establishment of
spending tolerance levels associated with each budget profile / controlling area
relationship.

1.10 What is budget manager?

Budget manager is a person, who has been assigned to internal order type for being
informed, when an internal order spending reaches a particular level. When we are
maintaining the action setting for availability control, SAP offers us a decision of
whether to return a warning with or with out a mail message. If we have chosen
warning with a mail, we must have established the proper budget manager setting
before the mail process will work.

1.11 What is Internal Order Status Management?

Status management is the act of determining and managing what transactions are valid
for an order at any given time with in its life cycle. The term life cycle was coined by
SAP to refer to an order’s fluid existence, moving from one phase to another until it is
closed
 Internal Order

2. PRE REQUSITES:
(Before going for customization of internal order, be ensure that following steps are
customized with respect to FI and CO)

2.1 Define Company:

T Code SPRO
Path IMG → IMG-Enterprise Structure →Definition→ Define Company
In this step, we will define Company for our enterprise structure. Company
represent to a group of company.

2.2 Define Company Code:

T Code SPRO
Path IMG → IMG-Enterprise Structure → Definition → Define/Delete/Check
Company
In this step, we will create company code and other master data for company.

2.3 Assignment of Co. Code to Company:

T Code SPRO
Path IMG→Enterprise Structure → Assignment → Financial Accounting →
Assign company code to company
In this step, we will assign company code to company. Please note N number of
company code may be assigned to a company.

2.4 Maintain Fiscal Year Variant

T Code OB29
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Fiscal Year
In this step, we will create / copy Fiscal year variant for our company code

2.5 Assign Co. Code to Fiscal Year Variant

T Code OB37
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Fiscal Year
In this step, we will assign Fiscal year variant created at step 2.4 to our company code

2.6 Define Variants for Open Close Posting Periods

T Code OBBO
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Document → Define posting Period
 Internal Order

In this step, we define variant for open close posting periods

2.7 Open & Close Posting Periods

T Code OB52
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Document → Assign posting period variants to company code.
In this step, we define what are periods and what are accounts open for posting

2.8 Assign Posting Period Variants to Company Code

T Code OBBP
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Document → Open & Closing Posting period
In this step, we will assign posting period variant created to our company code

2.9 Document Number Ranges

T Code FBN1
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Document → Define Document Number Ranges → Overview
In this activity create number ranges for document. For each number range specify
(1) a number interval for which document numbers are selected. (2) The type of
number assignment (internal or external). Assign one or more document type to a
number range

2.10 Maintain Field Status Variants

T Code OBC4
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Line item→ Control →Define Fields Status Variants
We group several field status groups into one field status variant. Assign a company
code to a FSV. This allows we to work with the same FSG in any no of co codes. A
FSG determines the screen layout for doc entry. Fields can have the following
statuses. Optional / Required / Suppressed entry. Enter the FSG in the master record
of the GL a/c. When a doc is entered, the definitions stored for the group are effective.
The FSG determines which fields are ready for input, required and hidden. Bear in
mind that additional assignments [i.e. cost centers or orders] are only possible if data
can be entered in the corresponding fields.

2.11 Assign FSV to Company Code

T Code OBC5
Path IMG → Financial Accounting → Financial Accounting Global Setting →
Line item→ Control → Assign FSV to company code
Establishing relationship between FSV and company codes.

2.12 Define Tolerance Groups for Employees

T Code OBA4
 Internal Order

Path IMG → Financial Accounting → Financial Accounting Global Setting →

Line item→ Define Tolerance groups for employees
In this transaction code, define various tolerance limits for employees with which
determine (1) The maximum document amount the employee is authorize to post (2)
The maximum amount a employee can enter as a line item in a customer or vendor
account, (3) The maximum cash discount percentage the employee can grant in a line
item, (4) the maximum acceptable tolerance for payment difference for employees.
This is a mandatory step, other wise we can’t post the transaction.

2.13 Edit Chart of Account

T Code OB13
Path IMG → Financial Accounting →General Ledger Accounting →G L
Accounts → Master Records →Preparation → Edit Chart of account list.
In this activity overview the chart of account list and if needed create new chart of
account. The chart of account is maintained at client level maybe used by more then
one company code. In this step maintain following fields for a newly created COA.

2.14 Assign Co Code to Chart Of Account

T Code OB62
Path IMG → Financial Accounting →General Ledger Accounting →G L
Accounts → Master Records →Preparation → Assign Co Code to Chart of
Account.
Assigning COA to Company code. A chart of account may be assigned to more then
one company code. In a single Co. Code three chart of account may be assigned (1) ->
Operating chart of account (2) -> Country Chart of Account (3) -> Group Chart of
Account.

2.15 Define A/c Group

T Code OBD4
Path IMG → Financial Accounting →General Ledger Accounting →G L
Accounts → Master Records →Preparation → Define Account Group
Here define various account groups for balance sheet and profit & Loss Account.
Account Group controls various parameters line (1) Number range of general ledgers
(2) Field Status of accounts, (3) Short variant etc.

2.16 Define Retained Earnings A/c

T Code OB53
Path IMG → Financial Accounting → General Ledger Accounting →G L
Accounts → Master Records →Preparation → Define Retained Earning
Account.
Here define retained earning account, which will carry balance of income &
expenditure account to next year. If we have defined more then one retained account,
then in general ledger master have to define retained earning account to which a
particular GL pertains
 Internal Order

2.17 Enter Global Parameters

T Code OBY6
Path IMG → Financial Accounting → General Ledger Accounting →G L
Accounts → Master Records → Preparation → Define Retained Earning
Account.
In this activity, we can make various global specifications for the company code. In
addition, we can look at the most important specifications of the company code at any
time in the overview. This includes, among other things, the chart of accounts and the
fiscal year variant.

2.18 Maintain Controlling Area

T Code OKKP
Path IMG → Controlling → General Controlling → Organization → Maintain
Controlling Area.
In this activity, we will maintain various parameters for out controlling area

2.19 Maintain Number Ranges for Controlling Documents

T Code KANK
Path IMG → Controlling → General Controlling → Organization → Maintain
number ranges for controlling documents.
In this IMG activity we will create number ranges for business transactions in
Controlling or change existing settings.
For every posting in CO the R/3 System generates a numbered document. The
document numbers are unique to each controlling area, since each number is assigned
only once

2.20 Maintain Versions

T Code OKEQ
Path IMG → Controlling → General Controlling → Organization → Maintain
Versions.
We will use versions to create independent data groupings in planning and in actual.
In planning, versions display alternative plan scenarios based on different planning
assumptions. For example, we can illustrate varying employment markets, price and
wage increases, or sales programs in different versions with differing parameters.

2.21 Create Cost Elements

T Code KA01, KA06
Path IMG → Controlling → Cost Element Accounting→ Master Data→ Cost
Element → Create Cost Element.
In this activity, we will create primary and secondary cost element. Cost element is
being used for posting transaction between various cost object and from FI to Co

2.22 Create Cost Element Groups

T Code KAH1
Path IMG → Controlling → Cost Element Accounting→ Master Data→ Cost
 Internal Order

Element → Create Cost Element Groups.

In this IMG activity we will create new or maintain existing cost element groups

2.23 Define Standard Hierarchy

T Code OKEON
Path IMG → Controlling → Cost Center Accounting→ Master Data→ Cost
Centers → Define Standard Hierarchy.
In this activity, we will maintain the relevant standard hierarchy for our controlling
area.

2.24 Create Cost Centers

T Code KS01
Path IMG → Controlling → Cost Center Accounting→ Master Data→ Cost
Centers → Create Cost Centers.

In this activity, we will create cost centers master data. Cost centers are created to
support differentiated assignment of overhead costs, to calculate overall costs of sales
(cost calculation function), and to carry out detailed control of costs occurring within
the organization (cost controlling function).

2.25 Define Cost Center Groups

T Code KSH1
Path IMG → Controlling → Cost Center Accounting→ Master Data→ Cost
Centers → Create Cost Center Groups.
In this activity we will define cost center groups. We can combine similar cost centers
to form cost center groups. We may then combine similar groups into further groups
to create a cost center hierarchy.

3. CUSTOMIZING STEPS:
3.1 BASIC SETTING
3.1.1 Activate Order Management in Controlling Area
T Code OKKP
Path IMG → Controlling → Internal Orders → Activate Order Management in
controlling Area

Purpose: In this activity we will activate internal order management for a particular
controlling area.

Customization
Select the controlling area for which we want to activate controlling area component.
 Internal Order

Then double click on activate components / control indicator from the left hand site, we
will be taken to the following screen, where we have to select component activate with
respect to order management

Save
 Internal Order

Customizing Results

In this step, we have activated order management component. Which is the 1st step
towards internal order customization.

3.1.2 Define Order Type

T Code KOT2_OPA
Path IMG → Controlling → Internal Orders → Order Master Data → Define
Order Type

Purpose: An order type contains many kinds of control information that is important
for managing orders. This includes many default values that can be called upon when
we create a new order with this order type. We must assign each order to an order
type that transfers specified parameters to the order. The order type is client-specific,
which means that every order type can be used in all controlling areas.

Customization
Chose New Entries from main screen
Give Order category 01 (Refer order category)
We will be taken to following screen, where we will customize various parameters for
our internal order type
 Internal Order

The above screen is the main customization screen for order type; it controls a lot of
parameters and default values for internal order master. Update the above screen as
shown. Click on Save to save the setting

Fields Description
Order Type It is 4-character field, Key that differentiates orders according to
their purpose.
Order The order category determines the technical properties of the order,
Category Here in our case we have enter 01 at the time of creation of internal
order, which represents internal order controlling
Number An interval of consecutive numbers or other alphanumerical
Range characters within a number range. Which we will maintain in the
Interval next step
General Parameter
Settlement Here will assign settlement profile, which we will assign in later
Prof. stages
Planning Here we have to key planning profile ID, which will be carried out at
Profile later stages.
Budget Here we will key budget profile ID, which will carried out at later
Profile stages.
 Internal Order

Object Class Here we have to select object class. The object class categorizes the
objects in the Controlling application component according to their
managerial purpose and makes it possible to analyze flows of costs
according to managerial aspects.
Functional Here we have key functional area ID. The functional area is required
Area to draw up a profit and loss statement in Financial Accounting (FI)
using the cost of sales accounting method.
Reference Here we have Key reference or model order no., which will carry
Order default values at that time of creation of Internal order master
This indicator controls whether in the case of a link between
production orders and collective orders automatic goods movements
should take place between the individual levels of a collective order.
Archiving
Residence Residence time 1 determines the time interval (in calendar months)
Time 1 that must elapse between setting the delete flag (step 1) and setting
the deletion indicator (step 2).
Residence Residence time 2 determines the time (in calendar months) that must
Time 2 elapse between setting the deletion indicator (step 2) and
reorganizing the object (step 3).
Master Data Display
Order layout Specifies which title the tab pages should have in the order master
data, and which group boxes appear on the corresponding tab pages.
Print Form Name of a layout set. The name of a layout set has a maximum
length of 16 characters and can include upper case letters and
numeric characters. It must begin with a letter.
Field Here we set internal order master data field selection whether it is
selection required, optional, suppressed
Control Indicator
CO partner In allocations within CO, a sender-receiver combination
update
Classification Classified orders can be selected in the information system for
Controlling in a list showing all orders that have certain
characteristic values and statuses.
Commitment Controls whether commitments are updated for this controlling
Management object. You set the indicator in the order type. When you change it,
the change is valid immediately for all existing orders in the system
that has this order type.
Revenue This indicator controls whether revenues can be posted to an order.
Posting Orders with revenues can be settled in the following way: a. Costs:
Settlement to any receiver b. Revenues: Settlement to G/L account,
profitability segment, sales order, billing element and other orders
with revenues. You set the indicator in the order type. It is copied
from the order type when you create new orders. Orders that already
exist are not changed when you set this indicator at a later date in the
order type.
 Internal Order

Integrated This indicator specifies whether an order/project participates in

Planning integrated planning or not.
Status Management
Status Profile Here we have key status profile ID
Release Here we have check the box, if we want to release IO immediately
immediately for input. This option allows every type of transaction
Status This is used with respect to status profile
dependent
fields

Customizing Results

In this step, we have created our order type “M100”. The other fields will be
customized in the subsequent step and integrated to IO.

3.1.3 Maintain No. Range for orders

T Code KONK
Path IMG → Controlling → Internal Orders → Order Master Data → Maintain
No. Range for orders

Purpose: Every order master record must be uniquely identified within its client by
means of an order number. Each order is assigned to a number range group via its
order type. Several order types can be assigned to the same number range number
range group with the same number interval. The No. range may be internal or
external.

Customization
Chose Group from main menu.

Select maintain or press F6 as shown above; we will take to following screen.

 Internal Order

Select Group → Insert from main menu as shown below

The following pop up screen will appear, update the fields as shown

Click on + button on the above screen to insert the above number range. Find the
above number range group from the screen

Select the check box

Double click the internal order type we have created earlier. It will become blue

Select to assign the internal order type to number range group. We

will find that internal order type is assigned to the number range group as shown
below

Save the setting and enter

 Internal Order

Customizing Results

In this step, we have created a number range group for our order type “M100”. All the
internal order created under the controlling area SINF, will be allotted one sequential
number from this number range.

3.1.4 Maintain Settlement Cost Elements

T Code KA01 (Primary Cost Element), KA06 (Secondary Cost Element)
Path IMG → Controlling → Internal Orders → Actual Posting → Settlement →
Maintain settlement cost element

Purpose:
In this activity we will maintain either primary settlement cost element or secondary
cost element according to which cost object settlement is done.

Primary settlement cost element is required, where receiver cost object is out side
of CO area with cost element category type 22
Secondary settlement cost element is required, where receiver cost object is with
in CO area with cost element category type 21

Customizing Results

Maintenance of settlement cost element is not necessary, Instead of settlement cost

element we can use original cost element for settlement.

3.1.5 Maintain Allocation Structures

T Code SPRO
Path IMG → Controlling → Internal Orders → Actual Posting → Settlement →
Maintain Allocation Structures

Purpose:
In this step we will define and establish relation between source (Cost Element) and
receiver category (Cost center and / or internal order). The main activity in this step is
Create Allocation Structure & Save (Controlling Area Independent)
Select newly created allocation structure and double click assignment, select new
for creating new assignment. Allocation structure may contain mare then one
assignment.
Select the required assignment for which we will maintain source. Here we will
define the source cost element, either it may be cost element range or cost element
group.
Select settlement cost element, here we define
o Receiver category it may one of the several category provided as default
like CTR- Cost Center, G/L- General Ledger.
 Internal Order

o The receiver may be either Original cost element or a settlement cost

element. According to the requirement we will define in next 2 col.

Settlement though Original Cost Element Vs. Settlement Cost Element

Fact: We are having one internal order 1000 which need to be settle to a cost center
2000. With respect to internal order 1000 we have incurred certain cost through cost
element 3000 and Cost element 4000.

1. Settlement through Original Cost Element

Original Entry: Order No. 1000 Debit

Cost element 3000 Rs.10000

Cost Element 4000 Rs.20000

Settlement Entry: Order No. 1000 Credit

Cost element 3000 Rs.10000

Cost Element 4000 Rs.20000

Settlement Entry: Cost Center 2000 Debit

Cost element 3000 Rs.10000

Cost Element 4000 Rs.20000

2. Settlement through Settlement Cost Element

We need to create secondary cost element 5000

Original Entry: Order No. 1000 Debit

Cost element 3000 Rs.10000

Cost Element 4000 Rs.20000

Settlement Entry: Order No. 1000 Credit

Secondary Cost element 5000 Rs.30000

Settlement Entry: Cost Center 2000 Debit

Secondary Cost element 5000 Rs.30000

Customization
Select New Entries
We will taken to following screen
 Internal Order

Update the screen as given above for our new allocation structure
Save the setting

Select the allocation structure we have created as give below

Double click on Assignment cost element

Select

Create new assignment as show below for IO M100

Save
Select new assignment we have created as sited below

Double click on source

We will be taken to following screen, where we have update the cost elements
 Internal Order

We have updated a cost element range, through which we are booking expenses
relating to this fair

Save

Double click on settlement cost element

Select

Update the above screen as shown

Save .
Customizing Results

In the above process, we have defined allocation structure M1 and assignment

structure M10 for our controlling area SINF. We have also defined our source cost
element rang 316 to 317 will be settle through cost element to a receiver category
CTR (Cost Center)

3.1.6 Maintain Settlement Profile

T Code OK07
Path IMG → Controlling → Internal Orders → Actual Posting → Settlement →
Maintain Settlement Profile

Purpose:
In this we will define the settlement profile. The settlement profile holds various
parameters, which is required for our settlement of internal order. One should define
the settlement profile before enter to settlement rule for a sender

Customization

Double click on Maintain Settlement Profiles

We will taken to the following screen

 Internal Order

Select

Update the above screen with the values as shown and save the settlement profile.

The settlement profiles controls the following fields, which was narrated in details

Fields Description
Settlement Here we will give settlement profile ID and description there of to
Profile identify the settlement profile
Actual Cost / Cost of Sales
To be This is the default setting. If we try to close the object, or set the delete
settled in flag, the system displays an error message if the balance in the object is
full not zero.
Can be We can settle actual costs and costs of sales, but do not have to. When
settled we try to close the object or set the delete flag, the system displays a
warning if the balance in the object is not zero. We can, however, close
the sender with a balance.
Not for Actual costs and costs of sales are not settled, even if we trigger
 Internal Order

settlement settlement expressly for this object. Wipe and variances can be
settled. When we close the object or set the delete flag, the system does
not display a message if the balance in the object is not zero.
Default Values
Allocation Here we have to key the allocation structure ID, what we have defined
Structure in our earlier step.
PA transf. Here we have to key the Profitable Analysis structure ID
Str.
Default A default settlement object available for this settlement profile.
Object type Depending upon entry in this field the system produces settlement rule
Source The source structure is used to settle costs incurred on the sender to
structure various receivers, split by cost element. In this way, the source
information is retained.
Indicators
100% If we have defined percentage distribution rules for a particular
validation settlement rule, the system checks the total percentage either when we
save the settlement rule or if we use the percentage check function.
% If we set this indicator, we can use the settlement rule to determine the
Settlement distribution rules governing the percentage costs to be settled.
Equivalence If we set this indicator, we can define distribution rules in the
numbers settlement rule, according to which costs are settled proportionally. For
example, we want to settle an order to three different cost centers on the
basis equivalence numbers 1, 2, 4:
The first cost center receives 1/7 of the costs
The second cost center receives 2/7 of the costs
The third cost center receives 4/7 of the costs
Amount If we set this indicator, we can define distribution rules in the settlement
settlement rule, which allow costs to be settled by amount. For examples we can
settle Rs.5000 of the costs incurred on an order to cost center.
Variance If we set this indicator, variances are passed on to costing-based
from cost- Profitability Analysis (CO-PA component) during order settlement.
based PA
Valid receiver
In the control segments, we will define which will the settlement received. The options
are
Blank - If you want to forbid settlement to G/L accounts, choose "settlement not
allowed". No settlement rule with receiver type "G/L account" can be created in the
settlement rule.
1- If you want to allow settlement to G/L accounts, choose "can be settled".
2- If you want at least one settlement rule to have a G/L account as a receiver, choose
"must be settled".
Other Parameter
Document Document type for settlement runs relevant for accounting and balance
type sheet.
Max no. dist Maximum number of distribution rules for each settlement rule. You
rls cannot settle receivers for which there are no distribution rules.
 Internal Order

Residence This field contains the residence time for the settlement documents,
time expressed in calendar months.

Customizing Results

In the above step, we have created our settlement profile “Met”. We have defined
there the residence time, object class; maximum no of settlement rule can be defined.
We also assigned allocation structure; we have created in our earlier steps.

3.1.7 Assignment of settlement profile to order type

T Code SPRO
Path IMG → Controlling → Internal Orders → Actual Posting → Settlement →
Maintain Settlement Profile

Purpose:
In this step, we will assign the settlement profile created earlier to the order type
M100

Customization

Double click on “Enter settlement profile in order types”

Click on and give order type “M100” to finding out the order
type from the list of list of order type

Key settlement profile ID against the order Type M1000

Customizing Results

In the above step, we have assigned settlement profile “MKTG” to order type “M100”

3.1.8 Maintain Number Ranges for Settlement Documents

T Code SNUM
Path IMG → Controlling → Internal Orders→ Actual Posting→ Settlement →
Maintain Number Ranges for Settlement Documents
Purpose:
In this step, we will create a number range group, which will utilized in the settlement
process for documentation process of settlement document.

Customizing
 Internal Order

Select from system menu as given below

Select maintain
We will be taken to following screen

Select insert from the above screen. The following pop up screen will be shown on the
screen. Maintain the screen as given for settlement document number range
 Internal Order

Click + button above, the above number range will be inserted

Select the check box against the number range we have created
Double click on controlling area SINF it will become blue
Select element/group to assign the controlling area to the number range group

Now controlling area is assigned to settlement document number rage, which is

depicted below

Save
 Internal Order

Customizing Results

In the above we, created number rage group for our settlement document and assigned
to controlling area.

With the above steps, we have completed the basic customization steps of internal
order. In the next steps we will do the planning customization steps for our order type
M100

3.2 INTERNAL ORDER PLANNING

Internal order planning is another area, in which one planning or one type of panning
doesn’t hold well. It’s very with the business scenario and the client’s requirement.
For example a simple project with short span of time, overall planning may the
perfect choice, and a more complex projects spanning an entire year or more may
require a details unit cost planning approach.

In the Co module, SAP makes a distinction between planning and budgeting. Planning
implies that an iterative process may occur in which many different versions of the
plan may be developed until one is decided upon.

On the other side budget can be defined as a detailed work plan describing how the
approved amount will be allocated once planning has confirmed.

The budget is tool through which project management will approve and allocate costs
with in the internal order.

Availability control is a concept, which is used in relation to budget management to

have proper control over internal order development. Through proper customization,
availability control with its helping hands assists project manager for monitoring
ongoing project variances and initiating specific actions when tolerances are reached.

SAP provides us three level of internal order planning with each level more detailed
than the proceedings.

Overall Planning: This is the simplest form of planning for internal order. Planned
cost is maintained at internal order level. If the purpose of planning is to find out the
variances between planning and actual expenditure, then in such situation it is the best
solution.

Cost Element/Activity Planning: In this planning type, planning is carried out at

cost element level and / or activity level. In this planning process, we are able to
integrate our internal order planning with CCA.
 Internal Order

Unit Costing: This planning is detailed as compared to the previous planning process.
In this planning process expenses specific to the cost element level are broken down
to greater details through the use of costing sheets and valuation variants.

It is important to note that, there is no such restriction that once we have planed in
overall planning; we should stick on with overall planning. After having further
detailed information we can move forward for more details planning.

Let us start customizing steps for planning

3.2.1 Maintain Version

T Code OKEQ
Path IMG → Controlling → General controlling→ Organization→ Maintain
version

In these steps, we will review the version maintenance for controlling areas. In
particular we have pay much attention two important fields in version maintenance.
These are

Planning integ. CCtrs / Process cost: Activate the setting, where we required
internal order / WBS elements plans integrate with cost center accounting. This
integration behaves two ways i.e. internal order-planning effects cost center and cost
center planning effects internal order.

Valuation version for IAA: This setting is required where the above setting is not
active. Here we have define version from where SAP will extract activity price
information for activity types used as input to the orders/WBS elements
 Internal Order

Customizing Results

We have customized not to integrate Cost center planning with internal order / WBS
element and at the same time customized activity price will taken from defined
version 0.

3.2.2 Maintain Planner Profile for Overall Planning

T Code OKOS
Path IMG → Controlling → Internal Order→ Planning → Manual Planning →
Maintain Planner Profile for Overall Planning

Double click on Define Planning profile for overall planning

Select

We will be taken to the following screen

 Internal Order

Save
The above screen controls various parameters, that has described below
Fields Description
Profile This if Planning profile ID and description there on
Time horizon
Past Value, which specifies how far into the past we can plan/budget for. The
start year is the reference point. For examples The start year is 2005 and
the value entered here is 5, so you can plan/budget as far back as 2000
inclusively.
Future Value, which specifies how far into the future we can plan/budget for.
The start year is the reference point. For examples
The start year is 2005 and the value entered here is 5, so you can
plan/budget up to 2010 inclusively.
Start Value, which determines the start year for planning/budgeting. The
reference point is the current fiscal year. If we add the entered value to
 Internal Order

the current fiscal year, this equals the start year. If left it blank, the
current fiscal year is taken as the start year.
Overall Indicator, which controls whether it is possible to plan/budget total
Values values.
Annual Indicator, which controls whether it is possible to plan/budget annual
Values values.
Format
View The figure controls the value displayed with the plan / budget value
when we access the function. In the droop down we will find following
option with their meaning
03 Cumulative: Displays the total plan accumulated values over the
allowed planning years.
04 Remainder: Derived by the formula (Planned total – Accumulated)
05 Planned Total: The sum value of the total plan enters for the order.
06 Previous Year: Displays the values planned for the previous year
08 Costing: Displays any values entered using unit costing
09 Cost element plan: Displays any values enter using unit costing
Decimal This fields controls, how the amount will be displayed and up to what
Places decimal
Scaling This fields controls display of amount. For example our planning
Factors amount Rs.100000 and we have defined here 3, the amount will
displayed Rs.100
Detail Planning and unit Costing
Prim.Cele If desired, enter the primary cost element group to be defaulted during
Grp cost element level planning on the order. Entering a defined group of
cost element is a good way to limit the user’s ability plan
Revenue If desired, enter the revenue element group to be defaulted during
CE Grp revenue element level planning on the order. For revenues to be planned
on an order, the order type must allow revenue postings. Planning
entries must be entered as negative that is with a preceding minus (-)
sign
Sender If desired, enter the cost element group that we want to be the default for
CCtr activity input planning. Planned activity is relayed from the cost center
Group group and as activity is recorded, the group is credited accordingly
Sender If desired, enter the activity type group that we want to the default for
Act. type activity planning on the order. If maintained, when the user selects the
grp activity input button on the order-planning screen, this activity type
group will appear as the only option.
Stat. Key If desired, enter the statistical key figure group to be defaulted during
fig group key figure planning on the order. Entering a defined group of key figures
is a good way to limit the user’s ability to plan
Costing Key that determines how a cost estimates is performed and valuated.
Variant Depending on the object being costed, either the functions of unit
costing or the functions of product costing can be used.
Currency Translation, Overall plan value
Exchange Key representing a type of exchange rate in the system.
 Internal Order

rate type
Value The value date in planning determines which daily exchange rates apply
date for currency translation.

Double Click on Maintain Planning Profile for order types

Customizing Results

In the above customizing steps, we have defined planning profile “M1000” for our
marketing internal order type “M100”. This planning profile “M1000” will support us
cost element level planning for the cost element group “MARKETING”. All
expenses relating to this order will planned at beginning of the year at project level.
As the project s are activated, a cost element level plan will be developed for each
project for just the accounts found in the cost element group “MARKETING”.

3.2.3 Assign Planning Transactions to Number Ranges

T Code KANK
Path IMG → Controlling → Internal Order→ Planning → Basic Setting →
Assign Planning Transactions to Number Ranges

Purpose: In these steps we will maintain number range for internal order planning
document

Customizing: This step is already carried out at controlling area setting. We will not
do ant extra setting here.

Customizing Results

In the above customizing steps, we have maintained internal order document number
range for planning.

3.3 INTERNAL ORDER BUDGETING

Budgeting with in SAP provides the user with additional project management capabilities,
which is lacking behind in internal order planning. Internal order planning is an estimate
 Internal Order

of probable expenditure, which is carried out before setting of budgeting. A budget

represents the actual approved amount for a given project. Naturally budgeted amount is
determined based upon planning results. In SAP planning and budget is maintained
separately, it helps us to find our variance between planning and budget.

Let us start the customizing steps for budgeting

3.3.1 Maintain Budget Profile

T Code OKOB
Path IMG → Controlling → Internal Order→ Budgeting and Availability
Control → Maintain Budget Profile

Purpose: In this steps we will create budget profile and attach various parameters that
controls budgeting of an internal order

Customizing:

Double click on budget profile for CO Orders

Select

We will taken to following screen, where we have carry out major activities
 Internal Order

The above screen almost all same as the planning profile. Update the above as given
and save the setting

The field description of the above screen are appended below

Fields Description
Budget This is Budget profile ID to identify
Profile
Text This is description of budgeting profile
Time horizon
Past Value, which specifies how far into the past we can plan/budget for.
The start year is the reference point. For examples The start year is
2005 and the value entered here is 5, so you can plan/budget as far
back as 2000 inclusively.
Future Value, which specifies how far into the future we can plan/budget for.
The start year is the reference point. For examples
The start year is 2005 and the value entered here is 5, so you can
plan/budget up to 2010 inclusively.
Start Value, which determines the start year for planning/budgeting. The
reference point is the current fiscal year. If we add the entered value
to the current fiscal year, this equals the start year. If left it blank, the
current fiscal year is taken as the start year.
Overall Indicator, which controls whether it is possible to plan/budget total
Values values.
 Internal Order

Currency Translation, Overall plan value

Exchange Key representing a type of exchange rate in the system.
rate type
Value date The value date in planning determines which daily exchange rates
apply for currency translation.
Display
View The figure controls the value displayed with the plan / budget value
when we access the function. In the droop down we will find
following option with their meaning
03 Cumulative: Displays the total plan accumulated values over the
allowed planning years.
04 Remainder: Derived by the formula (Planned total –
Accumulated)
05 Planned Total: The sum value of the total plan enters for the
order.
06 Previous Year: Displays the values planned for the previous year
07 Assigned: The total amount of funds, commitment plus actual
postings that have been posted to an internal returns
11 Current Budget: The total budget currently available, including
any supplements, transfers and returns.
12 Release: Related to functionality in fund management and project
systems only.
Decimal This fields controls, how the amount will be displayed and up to what
Places decimal
Scaling This fields controls display of amount. For example our planning
Factors amount Rs.100000 and we have defined here 3, the amount will
displayed Rs.100
Investment Management
Program The program type budget section is related to investment (IM). We
type budget have to enter ID for valid IM program type
Availability Control
Activation This setting, where we have define how availability control will be
Type activated for a given internal order type. The option are
0 Cannot be activated
1 Automatic activation during budget allocation
2 Background activation
Usage This field is used in conjunction with background activation and
funds commitment and is maintained as a percentage. When
percentage funds entered in this fields is archived or exceeded,
availability control is automatically activated
Overall Select this box if you chose to have the availability check occur
against the overall budget of the project. If this field is left
unchecked, availability checks will occur against the annual budget
values.
Budgeting Currency
 Internal Order

This section gives us option, what type currency we wants to use for our planning
profile. The default will be controlling area currency.

Customizing Results

In the above customizing steps, we have defined budget profile “BMktg “ for our
marketing internal order type “M100”. In the above budget profile we have activated
availability control, which will activate as soon as order has been budgeted this gives
signals for approval of budget. Till that time no transaction will be allowed for that
particular order type.

3.3.2 Maintain budget profile in order types

Double click on “ Maintain budget profile in order types”

Click on box

Give Internal order type “M100”

Assign budget profile to internal order type, by keying budget profile against internal
order type

Save

Customizing Results

In the above customizing steps, we have assigned budget profile “BMKTG” to our
internal order type “M100”. It is worth while mentioned that we can assign one
budget profile to more then one internal order type, those are having similar.

3.3.3 Define Tolerance Limits for Availability Control

T Code SPRO
Path IMG → Controlling → Internal Order→ Budgeting and Availability
Control → Define Tolerance Limits for Availability Control
 Internal Order

Purpose: The Idea behind availability control is that SAP should alert you when we
are about to exceed some predefined percentage of project spending. This is achieved
through setting of tolerance limit associated with budget profile

Customizing:

Select

Update the above screen, with the values as shown above

Save the setting

The above screen contains the following fields, which are described below
Fields Description
CoAr Here we will key the controlling area ID
Prof Here we will key the budget profile ID
Act.Gr Action group, having a list of values which will limit and activate if
an particular act has been performed in that groups
Actn The setting in the field denotes the action SAP will take if defined
tolerance limit is exceeded, There are 3 option available
1 Warning
2 Warning with MAIL to person responsible
3 Error message
Usage Expressed as percentage, this amount represents the threshold for the
total funds committed to an order. If the threshold percentage is
exceeded the assigned action is trigged
Abs. variance Expressed in amount this setting represents the total permitted amount
of budgeted overrun
Curr

Customizing Results

In the above customizing steps, we have defined three alert types, which will be
carried out at various level of budget spending. When our budget spending cross 80%
of the budgeted amount, SAP will give us a warning message. When our budget
spending crosses 85% of the budgeted amount SAP will give a SAP Mail to the
budget manager. When budget spending is more then 105%, SAP will allow budget
spend up to budget amount + Rs.1000.
 Internal Order

3.3.4 Maintain Budget Manager

T Code OK14
Path IMG → Controlling → Internal Order→ Budgeting and Availability
Control → Maintain Budget Manager

Purpose: In this step, we will assign budget manager to our order type. If our
expenditure crosses certain pre-defined limit, SAP will through a SAP Mail to the
budget manager.

Customizing:

Select

Update the fields as shown below

The above screen is having following fields, with their description are given below.
Fields Description
CoAr. Controlling Area, Enter controlling area IF on which these setting will
have impact
Type Order: Enter order type ID for which budget manager will receive
SAP mail for budget overrun.
ObjCl Object Class: If applicable enter the class over which the budget
manager should be made aware of budget overruns.
User name Enter the SAP ID of the assigned budget manager

Customizing Results

In the above customizing steps, we have assigned budget manager logon ID “TUNA”
to our order type “M100”. Budget manager “TUNA” will SAP Mail, when budget
spending crosses 85% of the budgeted amount.

3.3.5 Maintain Number Ranges for Budgeting

T Code OK11
Path IMG → Controlling → Internal Order→ Budgeting and Availability
Control → Maintain Number Ranges for Budgeting

Purpose: In this step, we will maintain number ranges for planning and budgeting.
The number range intervals are pre defined by SAP and are not subject to change. We
 Internal Order

do have the ability to change the range values. The default intervals for planning and
budgeting include the following:
03 Overall order planning
04 Order Budgeting

Customizing Results

In the above customizing steps, we have decided to use SAP given number range for
planning and budgeting.

With this we have completed minimum customization for (1.) Basic customization of
internal order, (2.) Planning of internal order, (3). Budgeting of internal order. Now
we can check our customization from the user point of view, by carrying out business
transaction.

-----The End of Customization-----

 Internal Order

IMPORTANT TRANSACTION CODE

.1 Customization
T Code Path
KOT2_OPA Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Order Master Data → Define Order Types
KONK Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Order Master Data → Maintain Number Ranges for
Orders
OKEV Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Planning → Basic Settings → Maintain Versions
OKAP Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Planning → Manual Planning → Maintain Planner
Profile for Overall Planning
OK11 Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Planning → Manual Planning →Maintain Number
Ranges for Overall Planning
OKOB Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Budgeting and Availability → Control Maintain
Budget Profile
OK11 Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Budgeting and Availability → Maintain Number
Ranges for Budgeting
SPRO Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Budgeting and Availability → Define Tolerance
Limits for Availability Control
KA01, Implementation Guide for R/3 Customizing (IMG) → Controlling →
KA06 Internal Orders → Actual Postings → Settlement → Maintain
Settlement Cost Elements
SPRO Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Actual Postings → Settlement → Maintain
Allocation Structures
SPRO Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Actual Postings → Settlement → Maintain Source
Structure
OKO7 Implementation Guide for R/3 Customizing (IMG) → Controlling →
Internal Orders → Actual Postings → Settlement → Maintain
Settlement Profile
 Internal Order

.2 End User
T Code & Path
SAP standard menu → Accounting → Controlling → Internal Orders → Master data
→ Order →
KO01 – Create
KO02 – Change
KO03 - Display
SAP standard menu → Accounting → Controlling → Internal Orders → Planning →
Overall values →
KO12 - Change
KO13 - Display
SAP standard menu → Accounting → Controlling → Internal Orders → Budgeting
→ Original budget →
KO22 - Change
KO23 - Display
SAP standard menu → Accounting → Controlling → Internal Orders → Period-end
closing → Single functions → Settlement
KO88 - Individual processing
KO8G - Collective processing
KOB5 - Investment Order: Line Items
SAP standard menu → Accounting → Controlling → Internal Orders → Information
system → Reports for internal orders → Line Items →
KOB1 - Orders: Actual Line Items
KOBP - Orders: Plan Line Items
KOB4 - Orders: Budget Line Items
KSB5 - CO Documents: Actual Costs
KO2B - Display Budget Document
SAP standard menu → Accounting → Controlling → Internal Orders → Information
system → Reports for internal orders → More Reports →
S_ALR_87013019 - List: Budget/Actual/Commitments
S_ALR_87013015 - List: Actual Debit/Credit