SAP CO Configuration/Customizing Step by Step Guide

SAP Controlling (CO) module is an important component of SAP ERP systems. It is used for cost accounting and management accounting functions. This module helps in managing the costs of products and services in a company. It is essential for companies to configure and customize SAP CO to meet their specific business needs. In this article, we will provide a step-by-step guide on SAP CO configuration/customizing.

Table of Contents

1. Introduction to SAP CO Configuration/Customizing
2. Understanding the SAP CO Module
3. SAP CO Configuration/Customizing: Prerequisites
4. Step-by-Step Guide for SAP CO Configuration/Customizing
   • Define Controlling Area
   • Assign Company Code to Controlling Area
   • Define Number Ranges for Controlling Documents
   • Define Versions for Controlling Area
   • Define Cost Element Categories
   • Define Primary and Secondary Cost Elements
   • Define Cost Center Categories
   • Define Standard Hierarchy for Cost Centers
   • Assign Cost Centers to Hierarchy
   • Define Activity Types
   • Define Statistical Key Figures
   • Define Profit Center Categories
   • Define Standard Hierarchy for Profit Centers
   • Assign Profit Centers to Hierarchy
   • Define Internal Orders
5. Conclusion
6. FAQs

1. Introduction to SAP CO Configuration/Customizing

SAP CO Configuration/Customizing is the process of setting up the SAP Controlling module to meet the specific requirements of a company. This process involves defining the controlling area, cost centers, activity types, internal orders, and other parameters that are required for cost accounting and management accounting functions. SAP CO Configuration/Customizing is a critical process that requires careful planning and execution to ensure that the module is set up correctly.

2. Understanding the SAP CO Module

The SAP CO module is designed to support the cost accounting and management accounting functions of a company. This module allows companies to track and manage the costs of products and services, as well as to analyze the profitability of different business units. The SAP CO module is integrated with other SAP modules such as SAP FI (Financial Accounting) and SAP MM (Materials Management) to provide a complete solution for financial and cost management.

3. SAP CO Configuration/Customizing: Prerequisites

Before starting the SAP CO Configuration/Customizing process, companies must have a clear understanding of their business requirements and processes. They must also have a well-defined organizational structure, including company codes, profit centers, cost centers, and other relevant units. Additionally, companies must have access to SAP CO experts who can help with the configuration/customizing process.

4. Step-by-Step Guide for SAP CO Configuration/Customizing

The following is a step-by-step guide for SAP CO Configuration/Customizing:

Define Controlling Area

The controlling area is the highest level of organization in the SAP CO module. It is used to define the organizational structure for cost accounting and management accounting. To define a controlling area, follow these steps:

1. Go to transaction code OKKP.
2. Enter the controlling area ID and the name of the controlling area.
3. Define the currency for the controlling area.
4. Save the controlling area.

Assign Company Code to Controlling Area

The company code is the legal entity in SAP. It is used to define the financial accounting structure of a company. To assign a company code to a controlling area, follow these steps:

1. Go to transaction code OKKP.
2. Enter the controlling area ID.
3. Click on the “Company Code” button.
4. Enter the company code and the name of the company.
5. Save the assignment.

Define Number Ranges for Controlling Documents

Number ranges are used to assign unique numbers to controlling documents such as cost centers, internal orders, and profit centers. To define number ranges for controlling documents, follow these steps:

1. Go to transaction code KANK.
2. Select the controlling area for which you want to define the number range.
3. Define the number range for each type of controlling document.
4. Save the number range.

Define Versions for Controlling Area

Versions are used to manage different planning scenarios in the SAP CO module. To define versions for a controlling area, follow these steps:

1. Go to transaction code OKKP.
2. Select the controlling area for which you want to define versions.
3. Define the versions for each planning scenario.
4. Save the versions.

Define Cost Element Categories

Cost element categories are used to classify cost elements into different categories such as primary cost elements and secondary cost elements. To define cost element categories, follow these steps:

1. Go to transaction code KA06.
2. Define the different cost element categories.
3. Assign each cost element to a cost element category.
4. Save the cost element categories.

Define Primary and Secondary Cost Elements

Primary cost elements are used to track direct costs such as material costs and labor costs. Secondary cost elements are used to allocate indirect costs such as overhead costs. To define primary and secondary cost elements, follow these steps:

1. Go to transaction code KA01.
2. Define the primary cost elements.
3. Go to transaction code KA06.
4. Define the secondary cost elements.
5. Assign the secondary cost elements to the appropriate cost element category.
6. Save the cost elements.

Define Cost Center Categories

Cost center categories are used to classify cost centers into different categories such as production cost centers and service cost centers. To define cost center categories, follow these steps:

1. Go to transaction code KL01.
2. Define the different cost center categories.
3. Save the cost center categories.

Define Standard Hierarchy for Cost Centers

A standard hierarchy for cost centers is used to group cost centers into a hierarchical structure. To define a standard hierarchy for cost centers, follow these steps:

1. Go to transaction code OKEON.
2. Define the standard hierarchy for cost centers.
3. Assign cost centers to the appropriate nodes in the hierarchy.
4. Save the standard hierarchy.

Assign Cost Centers to Hierarchy

To assign cost centers to the standard hierarchy, follow these steps:

1. Go to transaction code OKO6.
2. Assign the cost centers to the appropriate nodes in the hierarchy.
3. Save the hierarchy.

Define Activity Types

Activity types are used to measure the activity level of cost centers. To define activity types, follow these steps:

1. Go to transaction code KL01.
2. Define the different activity types.
3. Save the activity types.

Define Statistical Key Figures

Statistical key figures are used to track non-financial data such as production quantities and headcounts. To define statistical key figures, follow these steps:

1. Go to transaction code KK01.
2. Define the different statistical key figures.
3. Save the statistical key figures.

Define Profit Center Categories

Profit center categories are used to classify profit centers into different categories such as sales profit centers and cost profit centers. To define profit center categories, follow these steps:

1. Go to transaction code KCH1.
2. Define the different profit center categories.
3. Save the profit center categories.

Define Standard Hierarchy for Profit Centers

A standard hierarchy for profit centers is used to group profit centers into a hierarchical structure. To define a standard hierarchy for profit centers, follow these

1. Go to transaction code OKEV.
2. Define the standard hierarchy for profit centers.
3. Assign profit centers to the appropriate nodes in the hierarchy.
4. Save the standard hierarchy.

Assign Profit Centers to Hierarchy

To assign profit centers to the standard hierarchy, follow these steps:

1. Go to transaction code KE52.
2. Assign the profit centers to the appropriate nodes in the hierarchy.
3. Save the hierarchy.

Define Internal Orders

Internal orders are used to track costs and revenues for specific purposes such as product development or marketing campaigns. To define internal orders, follow these steps:

1. Go to transaction code KO01.
2. Define the internal orders.
3. Save the internal orders.

Define Order Types

Order types are used to classify internal orders into different categories such as development orders and marketing orders. To define order types, follow these steps:

1. Go to transaction code KOT2.
2. Define the different order types.
3. Save the order types.

Define Settlement Profiles

Settlement profiles are used to determine how costs from internal orders are settled to cost centers or other objects. To define settlement profiles, follow these steps:

1. Go to transaction code OKO7.
2. Define the different settlement profiles.
3. Assign each settlement profile to an order type.
4. Save the settlement profiles.

Define Assessment Cycles

Assessment cycles are used to allocate costs from one cost center to another. To define assessment cycles, follow these steps:

1. Go to transaction code KSU5.
2. Define the different assessment cycles.
3. Save the assessment cycles.

Define Distribution Cycles

Distribution cycles are used to allocate costs from one cost center to several other cost centers. To define distribution cycles, follow these steps:

1. Go to transaction code KSU1.
2. Define the different distribution cycles.
3. Save the distribution cycles.

Conclusion

In conclusion, configuring and customizing SAP CO is a complex process that requires a thorough understanding of the module’s functionality and business processes. By following the step-by-step guide outlined in this article, you can ensure that your SAP CO implementation is optimized for your organization’s unique needs and requirements.

FAQs

1. What is the SAP CO module used for?

• The SAP CO module is used for cost accounting and controlling in organizations.

2. What are some common SAP CO reports?

• Some common SAP CO reports include cost center reports, internal order reports, and profit center reports.

3. What is the difference between a primary cost element and a secondary cost element?

• A primary cost element is used to track direct costs such as material costs and labor costs, while a secondary cost element is used to allocate indirect costs such as overhead costs.

4. What is an internal order in SAP CO?

• An internal order is a cost object that is used to track costs and revenues for specific purposes such as product development or marketing campaigns.

5. What is a settlement profile in SAP CO?

• A settlement profile is used to determine how costs from internal orders are settled to cost centers or other objects.