Controlling

Overview.....................................................................................................................................................1
Organization in Controlling..........................................................................................................................2
Company Code........................................................................................................................................2
Controlling Area.......................................................................................................................................2
Processing Controlling Areas...............................................................................................................3
Selecting and Displaying Current Controlling Area..............................................................................7
Assigning Controlling Areas and Company Codes................................................................................7
Assigning Controlling Areas and Plants................................................................................................7
Business Area..........................................................................................................................................7
Operating Concern..................................................................................................................................7
Profit Center............................................................................................................................................7
Plant........................................................................................................................................................8
Controlling Methods....................................................................................................................................8
Overhead Cost Controlling (CO-OM)...........................................................................................................8
CO External Data Transfer...........................................................................................................................8
Interfaces to other SAP system Components..............................................................................................8

Overview
 Controlling provides you with information for management decision-making.
 The main task of controlling is planning. You can determine variances by comparing actual data with
plan data. These variance calculations enable you to control business flows.
 Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The
data flow between the two components takes place on a regular basis.
 All data relevant to cost flows automatically to Controlling from Financial Accounting. At the same
time, the system assigns the costs and revenues to different CO account assignment objects, such as
cost centers, business processes, projects or orders.
 Cost elements or revenue elements enables you to compare and reconcile the values from Controlling
and Financial Accounting.
 Sections:
1. Cost Element Accounting (CO-OM-CEL)
2. Cost Center Accounting (CO-OM-CCA)
 3. Activity-Based-Accounting (CO-OM-ABC)
4. Internal Orders (CO-OM-OPA)
5. Profitability Analysis (CO-PA)
6. Profit Center Accounting (EC-PCA)

Organization in Controlling
 In the Financial Accounting (FI) component (external accounting), you can define the organizational
units for accounting in the Controlling (CO) component (internal accounting) under controlling
aspects. This means that FI and CO organizational units are related.
 Following are the basic organization units in FI and CO:
1. Company code in the Financial Accounting component (FI)
2. Business area in the Financial Accounting component (FI)
3. Controlling area in the Controlling component (CO)

Company Code
 The smallest organizational unit for which a complete self-contained set of accounts can be drawn up
for external reporting (FI). This involves recording all relevant transactions and generating all
supporting documents for financial statements, such as balance sheets and profit and loss statements
 We can have multiple Company codes for a Client or a Company.
 There must be at least one Company code.
 A legally independent company is normally only represented by one company code in the SAP
system. You can, however, also use a company code to represent an operation that is not independent
according to trade law. This is required, for example, if this operation is in another country and must
use the corresponding country currency and must meet the local tax requirements.
 In financial accounting, business transactions are always entered on the company code level and
processed further. The costs are also managed on the company code level. By using internal
organizational structures, it is possible to divide this up even further.
 All company-specific specifications are made on the company code level.

Controlling Area
 Organizational unit in an organization that represents a closed system used for cost accounting
purposes.
 A controlling area may contain one or more company codes, which can operate in different
currencies, if required. The company codes within a controlling area must all use the same
operational chart of accounts.
 Internal business transactions (CO) are portrayed in the controlling area.
 Primary costs are transferred from external accounting and classified according to managerial
accounting perspectives. If the primary costs are direct costs, then they are assigned to cost objects. If
they are overhead costs, then they are assigned to cost centers or overhead cost orders.
 When you create master data, the system always assigns the Controlling objects to a controlling area
and a company code.

Processing Controlling Areas

 Before creating a controlling area, you need to create the company codes and business areas (in FI)
that are to be assigned.
 Define the controlling area and enter the basic data relevant to cost accounting.

 Activate each component in the controlling area (cost centers, order management, profitability
analysis, and so on).
 Store additional control information, such as, which currency the system should use to update the
values, and whether it should display variances.

 Assign one or more company codes to the controlling area.

Selecting and Displaying Current Controlling Area
 When you call up the first business transaction in Controlling, you need to select a controlling area.
The system saves this as a user parameter so that you do not need to enter the controlling area again if
you call up another transaction.
 You cannot execute a transaction for more than one controlling area at the same time.
 If you are working with multiple sessions, note that changing the controlling area setting in one
session affects all other sessions. It is not possible to work with different controlling areas in different
sessions.
 To set the default Controlling Area for an user, Enter CAC as the parameter ID (for controlling area)
in User Parameter of User Profile.

Assigning Controlling Areas and Company Codes

Assigning Controlling Areas and Plants

Business Area


Operating Concern


Profit Center

Plant



Controlling Methods

Overhead Cost Controlling (CO-OM)

CO External Data Transfer

Interfaces to other SAP system Components