2/22/2019 IO/ and Cost Center

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IO/ and Cost Center

Hi Everyone,

Would there be anyone willing to help m with IO, and CC. i have read some books, and still im not very clear.

let me know if you could, i will compensate for your services.

Thanks

https://archive.sap.com/discussions/thread/393543 1/6
2/22/2019 IO/ and Cost Center

(https://people.sap.com/former.member)

Former Member
May 02, 2007 at 09:53 AM
0 Likes

oking for? View more on this topic (https://go.sap.com/community/tag.html?

43523242285841826221) or

tps://answers.sap.com/questions/ask.html?primaryTagId=648420875567243523242285841826221)

8 replies

(https://people.sap.com/former.member) May 01, 2007 at 23:26 PM

Former Member replied

Internal order is used to track the cost of a particular activity within the organization for
example an exhibition, SAP implementation and this activity may run across departments.

Cost centre is used to track the cost of well defined responsibility units within an
organization. Normally these are the departments e.g. finance, HR. production, quality
assurance, etc

cost allocation methods are different for cost centre and internal order. internal order uses
settlement and cost center can use various methods such as assessment, distribution,
activity allocation, costing sheet, etc

Regards,

(https://people.sap.com/former.member) May 02, 2007 at 01:57 AM

Former Member replied

why do we need allocation structures, settlement structures, valuation and so forth

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2/22/2019 IO/ and Cost Center

(https://people.sap.com/former.member) May 02, 2007 at 05:00 AM

Former Member replied

There are various methods in CO which is used to allocation costs from one cost collector
to another. For allocation of costs, we need to define which cost element will be used as a
medium / carrier. Allocation structure is used to define which cost element will be used as
carrier / medium. There can be multiple cost elements depending on the sender cost
elements.

Settlement is the method used for allocating the costs of orders to receiver. Settlement
profile contains the settings such as type of receivers, whether settlement is possible on %
basis / ratio / amount, etc.

(https://people.sap.com/former.member) May 02, 2007 at 06:47 AM

Former Member replied

what are versions used for?

Former Member replied May 02, 2007 at 06:58 AM

The version is meant for planning in all sub modules of controlling .

You can plan your cost centers in as many CO versions as you wish. Each version in the
R/3 System is tailored to particular planning requirements.

when you create a controlling area, the R/3 System automatically creates version 0, valid
for five fiscal years. You can also create alternative versions for, for example, positive or
negative scenarios.

When referring to actual postings, the R/3 System always uses version 0. Alternative
versions can relate only to saving planning data in Cost Center Accounting.

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2/22/2019 IO/ and Cost Center

Former Member replied May 02, 2007 at 08:19 AM

Hi Ganga,

The purposes of IOs & Cost centers are same. IOs are temporary in nature but Cost
centers are permanent in nature compare to IOs.

Example for IOs:

Construction of a building --- All the expenses are collected in IOs, on completion of the
building the IOs are settled to a Asset(Building). The purpose of created IOs ends here.

Cost centers: Production cost centers, Service cost centers, etc. which are all permanent
in nature for your organisational day to day activities.

Find the link below to know more.

http://www.sap-img.com/financial/difference-between-cost-centers-and-internal-orders.htm

Regards,

Murali

Assign points if is useful.

(https://people.sap.com/former.member)
Former Member replied May 02, 2007 at 08:22 AM

can someone explain to me:

-actual assessment cycle

-actual distribution cycle

-Stat key figures

-commitments

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0

(https://people.sap.com/former.member)
Former Member replied May 02, 2007 at 09:53 AM

Actual Assessment Cycle:

Assessment was created to transfer primary and secondary costs from a sender cost
center to

receiving controlling objects. During assessment, cost centers or business processes can
be used as

senders

Stat Key Figures: You can use statistical key figures as the tracing factor for periodic
transactions such as distribution or assessment, and for key figure analysis.

<b>Commitments</b>: Commitments are payment obligations that are not entered into
the accounts, but at a future date lead

to actual costs. They are incurred in the purchasing function, in the "Materials
Managment"

component:

- The internal communication for a purchasing request is known as a purchase requisition

(from the

ordering party to the purchaser). A purchase requisition is a provisional obligation, that can
be

changed at any time. You do not need to assign a CO object to a purchase requisition row.
If you do

not do so, then the commitment is not displayed in CO.

- A purchase order is a contractual agreement specifying that goods or services from a

vendor

will be taken under certain, agreed conditions Therefore, a purchase order is a binding
obligation, as

it is based on a contractually fixed agreement. For a purchase row that is assigned to a

cost element,

you need to specify a CO object, so the commitment is also displayed in CO.

n If you create a purchase order with reference to a purchase requisition, the commitment
is

reclassified (as a purchase order commitment) in CO.

n The commitment is reduced by processing goods receipts against the purchase order.
Actual costs
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2/22/2019 IO/ and Cost Center

are posted to the CO object. This business transaction is continued until the purchase
order is

processed, and the commitment amount is zero.

n You need to activate commitments management in the controlling area in CO.

Additionally, the

cost center may not be locked for commitments (locking indicator).

n Commitments are not reduced when you create an outline agreement. These are only
incurred when

you create the contract release order (contact), or goods release order (scheduling
agreements).

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