It focuses on internal users, in contrast to SAP FI which focuses on data drawn for external reporting. The transactions posted in FI are transferred to CO for cost accounting processing, analytical reporting, and audit-controlling spectrums. There can be either a one-to-one relationship or there can be one-to-many relationship between Controlling Areas Verses Company Codes.
Hence, CO becomes the governing module that oversees the consolidation of costing data whereby management can derive their perspectives for analysis.
The SAP Controlling (CO) Modules Components are:
- Cost Element Accounting
- Cost Controlling
- Cost Center Accounting
- Internal Orders
- Activity-Based Costing
- Product Costing - Controlling
- Profitability Analysis
- Profit Center Accounting
Some methodologies that are unique in their structural concepts are for example – CO PA & PCA. PA refers to Profitability Analysis that derives from how profitable your market-segments are on their external sides. EC-PCA refers to Profit Center Accounting that produces the analysis that portrays how your internal profit centers are functioning in terms of their profitability. To further expand the potential, we also have CO-PC in SAP which streamlines Product Cost Controlling.
CO-PA supports two forms of Profitability Analysis:
- Costing-based & Account-based.
- Costing-Based Profitability Analysis is groups costs and revenue according to value fields and costing-based evaluation approaches. Both of these may be defined by the client. It provides the client with a complete short-term profitability reporting capability at all times.
- Account-Based
- Profitability Analysis is organized in accounts using an account-based valuation process. Its use of cost and revenue elements gives it a distinguishing characteristic. This provides the client with a profitability report that is permanently reconciled with financial accounting. Hence, Profitability Analysis (CO-PA), alongside Profit Center Accounting (EC-PCA), is one of the application components of Profitability Analysis.
The SAP Control (CO) Module is integrated with FI, AA, SD, PP, and HR. While FI is the main source fordata for CO, the others such as SD, MDD, and PP have many integration points with CO. Revenue postings in FI will result in postings in CO-PA & EC-PCA. The HR Module also generates various types ofcosts to CO. In addition, Planned HR Costs can be passed on to CO as well for CO planning purposes.
The above is just a summary outline and write-up about the dynamics of SAP CO. It would be well worthwhile for Costing Professionals to explore the depths of this innovative software for the enrichment of their career spectrum.
