Ksa Co BBP V1final PDF

Phoenix
BUSINESS BLUEPRINT
module CO
For implementation project of system SAP

R/3 in Schneider Electric KSA
February 2011
Business blueprint CO
Project SAP R/3, Schneider Electric, KSA
Phoenix
Team Sajid Basha Version: 01 Created: 22.07.10 Printed: 11.03.15 Designed:
CONTENTS
1 INTRODUCTION....................................................................................................3
2 TEAM STRUCTURE..............................................................................................3
3 TARGETS, REQUIREMENTS AND EXPECTED BENEFITS...............................3
1.1 Targets (objectives) and Requirements...................................................................3

3.2 Expected Benefits.....................................................................................................3
4 MODULE CO OPERATION IN TARGET STATE...................................................3
4.1 Supposed Implementation of Program-unit and Function in Module CO.............3

4.1.1 Implemented program-units.................................................................................................... 3
4.2 Organisational structure of module CO in target state..........................................3

4.2.1 Company Code....................................................................................................................... 3
4.2.2 Controlling Area....................................................................................................................... 3
4.2.3 Operating Concern.................................................................................................................. 3
4.3 Master data................................................................................................................ 3

4.3.1 Master Data............................................................................................................................. 3
4.3.1.1 Cost Center............................................................................................................................................ 3
4.3.1.2 Cost Center Group................................................................................................................................. 3
4.3.1.3 Cost Center Hiearchy.......................................................................................................................... 10
4.3.1.4 Cost Element......................................................................................................................................... 3
4.3.1.5 Cost Element Group.............................................................................................................................. 3
4.3.1.6 Activity Type......................................................................................................................................... 13
4.3.1.7 Statistical Key Figures........................................................................................................................... 3
4.3.1.8 Statistical Key Figure Groups................................................................................................................3
4.3.1.9 Internal Orders....................................................................................................................................... 3
4.3.1.10 Profit Centers......................................................................................................................................... 3
4.3.1.11 Profit Center Hierarchy........................................................................................................................ 16
4.4 Implemented process description (Process model)............................................17

4.4.1 Distribution (CO – CCA)........................................................................................................ 37
4.4.1.1 Plan Cycle (from indirect cost centers to direct cost centers)..............................................................3
4.4.1.2 Actual Cycle (from indirect cost centers to direct cost centers).........................................................38
4.4.1.3 Actual cycle (from dummy cost centers to indirect cost centers).......................................................19
4.4.2 Expense Budget Planning (CO – CCA)...................................................................................3
4.4.3 Activity Unit Price Calculation (CO – CCA).............................................................................3
4.4.3.1 Planned Activity Unit Price Calculation.................................................................................................3
4.4.3.2 Actual Activity Unit Price Calculation....................................................................................................3
4.4.4 Product Costing (CO – PC)..................................................................................................... 3
4.4.4.1 Material Types and Price Determination...............................................................................................3
4.4.4.2 Production Types with CO point of view................................................................................................3
4.4.4.3 Cost Object Controlling (CO-PC)........................................................................................................34
4.4.4.4 Integration Points with Logistic (master data, some definitions, etc.)(CO-PC)..................................25
4.4.4.5 Standard Costing (CO – PC)...............................................................................................................27
4.4.4.6 Raw-Material Costing (CO-PC).........................................................................................................293
4.4.4.7 Preliminary Costing (CO-PC)..............................................................................................................29
4.4.4.8 Actual Costing in PP Orders (CO-PC)................................................................................................30
4.4.4.9 Subcontracting (CO-PC).....................................................................................................................30
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4.4.4.10 Rework Process (CO-PC)...................................................................................................................32

4.4.4.11 Period-End Closing Transactions / Actual Costing (CO-PC)..............................................................33
4.4.5 Project Costing (CO-PC & PS).............................................................................................. 36
4.4.5.1 Master Data in PS............................................................................................................................... 36
4.4.5.2 Standard Costing (plan costing)..........................................................................................................37
4.4.5.3 Actual Costing..................................................................................................................................... 39
4.4.6 Services Costing (CO-PC)..................................................................................................... 41
4.4.6.1 Planned Costs..................................................................................................................................... 32
4.4.6.2 Actual Costs......................................................................................................................................... 33
4.4.7 Cost of Quality (CO-CCA & CO-PC)....................................................................................34
4.4.7.1 IQC – Appraisal Costs......................................................................................................................... 34
4.4.7.2 FQC – Appraisal Costs........................................................................................................................34
4.4.7.3 Reworks – Non-Conformity Costs.......................................................................................................35
4.4.7.4 Scraps – Non-Conformity Costs.........................................................................................................35
4.4.8 Profit Center Accounting (CO-PCA)..................................................................................... 36
4.4.8.1 Profit Center Structure.........................................................................................................................47
4.4.8.2 Profit Center Assignments..................................................................................................................... 3
4.4.8.3 Revenue & Cost Elements...................................................................................................................37
4.4.8.4 Statistical Key Figures........................................................................................................................... 3
4.4.8.5 Planning................................................................................................................................................. 3
4.4.8.6 Actual Posting...................................................................................................................................... 38
4.4.8.7 MM Goods Movements........................................................................................................................ 39
4.4.8.8 SD Billing Documents.......................................................................................................................... 60
4.4.8.9 FI Postings and FI-AA AsKSA Postings................................................................................................3
4.4.8.10 Transferring Balance Sheet Items.......................................................................................................31
4.4.8.11 Assessment & Distribution..................................................................................................................31
4.4.9 Profitability Analysis................................................................................................................ 3
4.4.9.1 Characteristics....................................................................................................................................... 3
4.4.9.2 Value Fields........................................................................................................................................... 3
4.4.9.3 Derivation............................................................................................................................................... 3
4.4.9.4 Valuation................................................................................................................................................ 3
4.4.9.5 Actual Data Flow................................................................................................................................... 3
4.4.9.6 Budgeting Process................................................................................................................................. 3
4.4.9.7 Reporting............................................................................................................................................... 3
4.5 Integration with other modules in the target state..................................................3

4.5.1 CO - PP................................................................................................................................... 3
4.5.2 CO – PS.................................................................................................................................. 3
4.5.3 CO – CS.................................................................................................................................. 3
4.5.4 CO – MM................................................................................................................................. 3
4.5.5 CO – SD.................................................................................................................................. 3
4.5.6 CO – QM................................................................................................................................. 3
4.5.7 CO – FI.................................................................................................................................... 3
4.5.8 CO – FA................................................................................................................................... 3
5 CHANGE IN PRESENT ORGANISATION AND RESULT ASPECTS................... 3
6 INTERFACE REQUIREMENTS..............................................................................3
6.1 Data Take Over........................................................................................................... 3

6.2 Interfaces.................................................................................................................... 3
7 DESCRIPTION FOR THE SYSTEM OUTPUTS AND REPORTS.........................3
7.1 Abap Reports............................................................................................................. 3
7.2 Other standard outputs............................................................................................. 3
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9 LIST OF USED ABBREVIATIONS.......................................................................77
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1 Introduction
Company Trade name : Schneider Electric
Address : Industrial City 2– Riyadh
Team BPE : Sajid Basha
BPO : Anil Kumar
BPO :
Project : Rollout Implementation of the SAP R/3 system, CO module (Controlling)
This blueprint summarises the strategies and requirements in the area of management and assurance of
quality. It expresses options of their implementation within SAP R/3 module of CO.
The content of this blueprint was prepared on the basis of workshops within the frame of the project team
or as applicable the working circle of integration meetings and meetings of the project key team with
responsible persons of the key areas.
On this occasion, we would like to thank all employees of the company for the co-operation.
The blueprint target consists in defining the functional and process parts of the CO module and a method
of their application in the processes essential to the company with the standard SAP R/3 functions.
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2 Team Structure
Team Members Sajid Basha
Business Partners Younes Souini,Anil Kumar
SAP Advisor
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3 Targets, Requirements and Expected Benefits
3.1 Targets (objectives) and Requirements

Basic targets to be fulfilled by implementation of the CO Module Concept:
 to assume the maximum of current processes of the Management Controlling function into CO
Module
 to reduce manual works on costing process
 to provide an integrated system with logistic transactions
 to remove duplicated works on costing and reporting cycle
 to increase reliability of the results obtained
 to improve planning function on costing and profitability processes
 to provide an easy-to-use, comparable, reliable, costing cycle
 to compare the actual results with budgeted/planned figures and analyse the variances with details
 to support management decisions with detailed data and forecasts
3.2 Expected Benefits

The expected benefits resulting from the targets and requirements:
 the minimum of processes outside of SAP after the system implementation
 lower manual and duplicated works on Management Control function
 information consistency with other modules
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4 Module CO Operation in Target State
4.1 Supposed Implementation of Program-unit and Function in

Module CO
1.4.1 Implemented program-units
Program-unit Program-unit name Presumption
description
CO-OM-CEL Overhead Management – Cost Element Accounting YES
CO-OM-CCA Overhead Management – Cost Center Accounting YES
CO-OM-OPA Overhead Management – Internal Order YES
CO-PC-PCP Product Cost Controlling – Product Cost Planning YES
CO-PC-OBJ Product Cost Controlling – Cost Object Controlling YES
CO-PC-IS Product Cost Controlling – Information Systems YES
CO-PA Profitability Analysis YES
CO-PCA Profit Center Accounting YES
4.2 Organisational structure of module CO in target state

1.4.1 Company Code
The company code is an organizational unit used in accounting. It is used to structure the business
organization from a financial accounting perspective. The company code represents a legal entity for
financial reporting purposes. This means that in all the financial transactions and master data definitions
the company code must be identified.
Schneider Electric KSA Company Code will be KSA1
2.4.1 Controlling Area

Organizational unit within a company, used to represent a closed system for cost accounting purposes.
A controlling area may include single or multiple company codes that may use different currencies.
These company codes must use the same operative chart of accounts.
All internal allocations refer exclusively to objects in the same controlling area.
In KSA:
 Controlling Area Code : ME01
 Controlling Area currency : EUR
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3.4.1 Operating Concern

Represents a part of an organization for which the sales market is structured in a uniform manner.
By setting off the costs against the revenues, we can calculate an operating profit for the individual
market segments, which are defined by a combination of classifying characteristics (such as product
group, customer group, country, or distribution channel). The market segments are called profitability
segments.
We can assign multiple controlling areas to one operating concern.
In KSA:
 Operating Concern Code : ME01
 Operating Area Currency : EUR
 All PA reports will be updated in monthly periods. (There will be no daily or weekly data
transfer to PA module.)
4.3 Master data

1.4.1 Master Data
4.3.1.1 Cost Center

The cost center is an organizational unit in controlling area representing a clearly delimited location
where costs occur. Cost center can be defined according to several different design approaches. (eg.
Functional requirements, allocation criteria, activities or services provided, geographic location and/or
area of responsibility) A typical approach could be for an enterprise to define a cost center for each low-
level organizational unit that has responsibility of managing costs. As costs are incurred, they are
assigned or posted to the appropriate cost center.
Any creation of cost centers must be assigned to the cost center hierarchy.
Schneider Electric cost centers are defined according to the organizational units in KSA.
Each cost center will be assigned to a category:

D : DVC
I : Industrial
C : Commercial
A : Administrative
4.3.1.2 Cost Center Group

Hierarchical group of cost centers defined and organized according to selected criteria.
Schneider Electric cost center groups are defined according to the reporting needs on the budget
process.
4.3.1.3 Cost Center Hierarchy

Hierarchical structure which combines several cost centers according to certain criteria.
Standard hierarchy code will be ME01
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Cost Center Hierarchy
Cost Center Group1 Cost Center Group 2
Energy – Sub group Solution center
NRG BU SOL
Oil & Gas Marketing
Power – Sub group Marketing
Power Mfg. & Logistic
ISC EPS Indust
services Q&A
EEM Quality
Industry Finance & Accounts
Industry F&A
Building HR & Admin
Building Hr& Admn

ITB Country President
ITB CP
Yemen
Yemen
S2B
S2B
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4.3.1.4 Cost Element

Cost elements captures costs incurred within a particular accounting period. They are closely related to
the general ledger accounts used in FI-GL.
There are two types of cost elements: primary cost elements and secondary cost elements.
4.3.1.4.1 Primary Cost Elements
Cost elements whose costs originate outside of CO and accrual costs that are only used for controlling
purposes.
Primary cost elements will be same with the expense and revenue accounts in GL.
The primary cost elements and revenue elements are directly from the expense and revenue accounts of
the P&L statement.
Primary cost elements correspond to the expense and revenue GL accounts in FI.
The following cost element categories will be used in KSA:

 1 : Primary costs
 11 : Revenues
 12 : Sales deduction
Primary cost element will be defined after chart of accounts creation.
4.3.1.4.2 Secondary Cost Elements

Cost element that is used to allocate costs for internal activities.
Secondary cost elements do not correspond to any G/L account in Financial Accounting. They are only
used in Controlling and consequently cannot be defined in FI as an account.
The following cost element categories will be used in KSA:

 21 : Internal settlement
 31 : Order/project result analysis
 42: Assessment cost element
 43 : Internal activity allocation
Secondary cost element codes will be defined in Realization Phase.
4.3.1.5 Cost Element Group

Organizational entity that combines cost elements of the same type.
Cost element groups can serve various purposes: planning, reporting, distributions, etc.
Expense budget planning process will be managed on cost element groups. “L Codes” will be defined as
cost element groups.
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L1 – Personnel Expenses
L101 – Salaries & Wages
L102 – Overtime
L103 – Bonus & Premium
L104 – Social Charges & Taxes
L105 – Meals & Transportation
L106 – Provisions & Expenses For Bonus, Holiday and Retirement
L107 – External Personnel
L108 – House Rental
L109 – Other Personnel Expenses
L2 – Communication & Promotion

L201 Promotion & Documents
L202 Advertising
L203 Exhibitions
L204 Customer Training & Travels
L3 – Transport, Travel & Entertainment

L301 Airplane Tickets - Domestic
L302 Travel Expenses - Domestic
L303 Airplane Tickets - Foreign
L304 Travel Expenses - Foreign
L305 Entertainment & Other Travel Expenses
L4 – Rental, Insurance & External Services

L401 Office Rental
L403 Cleaning
L404 Repair & Maintenance - Car
L405 Repair & Maintenance - Other
L406 Insurance
L407 Professional Fees
L408 Seminar and Training
L409 Bank Charges
L410 General Provision Risk
L411 Other External Services & Purchases
L5 – Administrative & Offices Expenses

L501 Electricity
L502 Other Consumable
L503 Post & Cargo
L504 Telephone & Telex
L505 Stationary
L509 Other Official Expenses
L6 – Taxes & Other Costs

L601 Local Taxes
L602 Other Taxes & Penalties
L603 Warranty Expenses
L7 – Provisions
L701 Provisions for Stock
L702 Provisions for Customer Account
L703 Other Provisions
Drafted Cost element group yet to be finalised
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4.3.1.6 Activity Type

Unit in a controlling area that classifies the activities performed in a cost center.
Activity types describe the activity produced or supplied by a cost center and are measured in units of
time or quantity. These are used to charge out costs from cost centers to production orders, projects, and
service orders. Each activity will have a price/rate. Activities will be charged to these cost objects during
confirmation.
In KSA the following activity types will be used:

Activity
Type Activity Name Secondary CE
DEDE Design Engineer Elec 9431104
DFDE Draftsman Activity 9431105
EXSV SRV Site Expenses 9431108
Production Direct
LABOUR Labour 9431000
PDPS Project design Engg 9431106
PDSV PROJECT DES SRV 9431106
PEAU Automation Engineer 9431103
PEPS PROJECT ENGINEER PRJ 9431102
PROJECT ENGINEER
PESV SRV 9431102
PLPS PROJECT LEADER PRJ 9431101
PLSV PROJECT LEADER SRV 9431101
PROJECT MANAGER
PMPS PRJ 9431100
PROJECT MANAGER
PMSV SRV 9431100
SASV Service Assist SRV 9431001
SESV Service Engineer SRV 9431001
STSV Service Techni SRV 9431001
SWSV Site Worker SRV 9431108
TESV Testing & C SRV 9431109
TRSV Trainer 9431110
DMDE Design Engineer Mech. 9431111 ( new added)

Auto also need to add few more cost activity
4.3.1.7 Statistical Key Figures

Statistical key figures represent activities or statistics in a cost center, such as the number of employees,
the floor area of a cost center.
Statistical key figures will be used for different purposes in KSA:

 Distribution Keys (in cycles)
 Non-productive times (for reporting purposes)
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In KSA, the following statistical key figures will be used:

 Number of employee (quantity)
 Floor area (m2)
 Energy consumption (KWH)
 Production times (hours)
 Non-productive times for each employee
 Etc.
4.3.1.8 Statistical Key Figure Groups

An organizational unit that groups together statistical key figures that are to be processed in one step.
In KSA, statistical key figure groups will be used for reporting for non-productive times. The followings
will be used:
4.3.1.9 Internal Orders

Object used to monitor costs 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
Actual/real internal orders will be used in KSA.
Actual/Real internal orders are used to collect costs and this can be settled to the other cost objects.
The following actual/real internal order types will be used in KSA:
 DAI (Investment Follow-up)

 General Services
 MARCOM
Parameters and number ranges of the internal orders will be defined in Realization Phase.
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4.3.1.10 Profit Centers

The profit center is an organizational unit in controlling area representing a clearly delimited location
where revenue is generated. Any creation of profit centers must be assigned to the standard hierarchy.
PCA lets us analyze internal profit and loss for profit centers. This makes it possible for us to evaluate
different areas or units within our company.
Cost centers, internal orders, projects, production orders, cost objects and materials have a profit center
assignment field in their master records.
In KSA, the following organizational units are defined as profit centers:

 Energy
 Power Construction
 Oil Gas & Petrochemicals
 Installation systems & Control
 Services
 Energy Efficiency
 Industry Business Unit
 Building Business Unit
 IT Business Unit
 Strategic Project & Prescription
 Manufacturing & Logistics
 Solution centre
 Quality Management
 Finance & IT
 Human resource
 Marketing
 Country President
 Yemen BU
 S2 Business
4.3.1.11 Profit Center Hierarchy

Before a profit center can be created, a hierarchical profit center structure in CO-PCA must be defined.
Profit Center Hierarchy code will be PPME01.
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4.4 Implemented process description (Process model)

2.4.1 Distribution (CO – CCA)
Cycle:
Collection of rules for cost allocation.
A given cycle can contain a number of segments. A segment consists of the following elements:
 Sender objects whose values to be allocated are computed using the same rules
 Receiver objects whose allocation bases are computed using the same rules
The sender-receiver relationships defined in a cycle are processed iteratively.
Cycles are only valid in the environment in which they were defined (such as planned distribution, actual
distribution, etc.)
The followings will be defined in the cycles:

 Cost centers or cost center groups
 Cost elements or cost element groups
 Orders or order groups
 Cost object groups
 WBS element groups
Sender and receiver cost centers and related cost elements will be defined.
4.3.2.1 Plan Cycle (from indirect cost centres to direct cost centres)
Plan
Cycle
Creation
Manual
entry
Statistical
Expense
key Run the Check the
budget
Figure cycle results
Planning
values
Transfer
from LIS
Planned costs on the indirect cost centers will be posted to the direct cost centers before standard
costing run. Sender cost centers are indirect cost centers, and receiver cost centers are direct and
indirect cost centers in various situations. At the end of the distribution, indirect cost centers will have no
planned costs.
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Sender cost centers:

 Energy
 Power Construction
 Installation systems & Control
 Services
 Energy Efficiency
 Strategic Project & Prescription
 Manufacturing & Logistics
 Solution Center
Distribution rules (segments and statistical key figures) are defined, but not finalized yet. All the
distribution keys and strategies will be finalized in Realization Phase.
/
4.3.2.2 Actual Cycle (from indirect cost centers to direct cost centers)
Cycle
creation
Payroll
(data flow
from HR)
Invoice entry
from
FI
Distribution
of
common
expenses
Manual entry
Statistical
Collection of Run the Check the
key
actual costs cycle results
figure values
Transfer
from LIS
The aim and the process will be same with the planned costs distribution. Same distribution strategies
and statistical key figures will be used in the cycle. Actual cycle will be created in the system for actual
cost distribution.
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Cycle
creation
4.3.2.3 Actual cycle (from dummy cost centers to indirect cost centers)
Check the
Manual results
entry
Invoice
Statistical
entry to
key Run the
the dummy
Figure cycle
cost
values Transfer
center
from LIS
Common expenses will be posted to the dummy cost centers at the invoice entry transaction. This
process will make easy the invoice entry transaction. Because accountants will enter only one cost
center for the common expenses.
Values of the statistical key figures will be entered to the system or transferred from other applications.
(From LIS, etc.) The following statistical key figures will be used in this process:
 Energy consumption (KWh)
 The floor area (M2)
 Number of personnel
 Etc.
Statistical key figures will be finalized in Realization Phase.
Cycle will be run. (First run: test run, afterwards actual run)
The results of the cycles will be checked. There will be no amount on the dummy cost centers after
cycle run. All the costs/common expenses will be posted to the related cost centers.
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3.4.1 Expense Budget Planning (CO – CCA)

Expense budget planning process will be managed on cost element groups (L Codes) in SAR currency.
Various CO versions will be used for each step of the budgeting process. First draft planning will be in
Version 1 by the department managers. Consolidation and evaluation of budget will be done in this
version by the Management Control Manager. Necessary changes will be done in Version 2 by the
Finance Director and General Manager. (Data on the Version 1 will be copied to Version 2.) Budget
approve process will be managed in different CO versions. If budget is approved the last version will be
copied to “Version 0” as the final budget figure.
4.4.1 Activity Unit Price Calculation (CO – CCA)

We can use the following price calculation methods in the plan and in the actual:
Price calculation can be based on:
 Period-based price
 Average prices
 Cumulative price
Period-based price:
The system divides the costs arising in each period by the activity. This can result in different prices in
each period.
Period-based price calculation method will be used with “standard costing” and “RECO” processes, in
KSA.
Average prices:
The average price is based on the total costs from all periods divided by the total activity quantity of an
activity type from those periods. This ensures that the activity inputs of all receivers are valuated with the
same price, regardless of the period in which the activity input occurs.
Average price calculation method will be used with budget costing process.
4.3.4.1 Planned Activity Unit Price Calculation
Manual
entry
(Planned
working
Hours)
Plan activity
Expense Distribution unit
budget Splitting
(Plan cycle) price
Planning
calculation
Transfer
from LIS
(Planned
working
hours)
Plan price calculation determines prices for the plan activity types of each cost center and activity type.
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In the plan, the SAP System considers all the planned activity relationships between cost centers. It
calculates the prices iteratively by dividing the plan costs by the plan activity quantity.
 Expense budget planning will be done “activity-dependent” on “L codes” in direct cost centers.
 Costs of indirect cost centers will be distributed to the direct cost centers.
 Planned working hours will be planned:
 Manual planning: planned working hours will be entered to the system manually.
 Automatic planning: after MRP run, planned working hours will be calculated on related work
centers – cost centers. These planned working hours can be transferred from PP to CO and used
on plan activity unit price calculation.
 In KSA, planned working hours will be entered to the system manually. (Number of personnel, total
production times, % efficiency, non-productive times, etc.)
 Planned costs will be divided by planned working hours. And the planned activity unit price will be
calculated.
Plan Labour activity unit price will be calculated manually and entered to the system. Holiday provisions
will be taken into consideration on labor cost planning. So the planned labor activity unit prices will be
same for each period. Calculation will be made 2 times in a year. (first 6 months and last 6 months)
Overhead activity unit price calculation will be same with labor activity unit price calculation. There will
be no differences between monthly figures.
All of the calculations will be based on SAR currency figures.
4.3.4.2 Actual Activity Unit Price Calculation
Actual data
Period-end
flow
closing
From FI to
Transactions
CO
in FI
(Postings)
Actual
Actual
Plan-Actual working
Distribution activity unit
Comparison Splitting hours from
(actual cycle) price
(expenses) confirmation
calculation
s
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During actual price calculation, the system calculates iterative prices for activity types based on actual
costs and actual activities. The calculation takes into account all activity exchanges between cost
centers.
Activity allocations / transfers between direct cost centers will be entered to the system before activity
unit price calculation.
 All invoice entries in FI side, update the cost elements and cost centers in CO module.
 When invoice entries finish in accounting department, budget-actual expense comparisons can be
reported.
 The activity unit price calculation process is same with “plan” cycle.
Actual labor activity unit prices will be calculated with holiday provisions (personnel expense budget) and
planned working hours. Provisions and working time decisions will provide to see the same amounts on
plan and actual activity prices.
Actual production overhead activity unit prices will be calculated with actual costs.
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5.4.1 Product Costing (CO – PC)
4.3.5.1 Material Types and Price Determination

Material Types:
Groups together materials with the same basic attributes, for example, raw materials, semi-finished
products, or finished products.
When creating a material master record, we must assign the material to a material type.
The following material types will be used in KSA:

 ROH – Raw Material V : Moving average price
 VERP – Packaging Material V : Moving average price
 HALB – Semi-finished Product S : Standard price
 FERT – Finished Product S : Standard price
 HAWA – Trading Goods V : Moving average price
 ERSA – Spare Parts V : Moving average price
 HIBE – Indirect Materials (consumables) V : Moving average price
 UNBW – Non-valuated Material ---
 DIEN – Services Products ---
Price Control:
Indicator determining the procedure used for material valuation.
Two procedures are available in the standard system:
 Valuation at standard price (S)
 Valuation at moving average price or (if the material ledger has been activated) periodic unit
price
(V and/or PUP)
4.3.5.2 Production Types with CO point of view

In KSA, two main production types will be implemented:
 Product Cost by Order
 Make-to-stock
 Make-to-order
 Product Cost by Period
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Product Cost by Order:

We can manage our costs at the level of production orders.
We can use the Product Cost by Order application component in make-to-stock and sales-order-related
production environments.
In Product Cost by Order, the production orders themselves are the cost objects. Costs charged to
production orders are usually analyzed and settled by lot. This means that variances can only be
analyzed after the entire planned production quantity has been put into inventory.
Product Cost by Period:
We can manage our costs by period at the level of production cost collectors.
The application component Product Cost by Period enables periodic analysis of costs at the product
level.
In contrast to Product Cost by Order in which we analyze costs by lot, in Product Cost by Period we
analyze costs by period. This means that we collect the costs on a cost object over an extended period of
time, and analyze the debits and credits in each period.
Product Cost Collector:
Product cost collectors enable us to collect costs at the product level independently of the production
type. Regardless of whether the production environment is order-related production, process
manufacturing, or repetitive manufacturing, we collect the production costs for the product on a product
cost collector and analyze the costs in each period.
4.3.5.3 Cost Object Controlling (CO-PC)

Cost Object
Units of output resulting from the value-added process with which costs are identified according to how
they are incurred.
Cost objects can be independent entities (called cost object IDs), or they can represent other entities
such as orders or projects.
The functions of preliminary costing, simultaneous costing, and final costing can be performed on cost
objects.
The following cost objects will be used in KSA:

 Product cost collectors
 Production orders
 Service orders
 Internal orders
 Sales order items
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4.3.5.4 Integration Points with Logistic (master data, some definitions, etc.)(CO-PC)
Bill of Material (BOM):
Bill of material is a multi-level material structure that defines the composition of the main material
reference.
Bills of materials contain essential master data for integrated materials management and production
control. A bill of material is a complete, formally structured list of the components that make up a
product or assembly. The list contains the material number of each component, together with the
quantity and unit of measure.
Order BOM (BOM with reference to a sales order) :
We work with order BOMs when we specially tailor the “make-to-order” production of our products to the
requirements of our customers. In order to meet the customer requirements, sales order specific
modifications to various assemblies are often required. Furthermore, assemblies are often specially
constructed for a particular sales order.
The order specific, modified or created BOMs are saved with reference to materials, sales orders, and
sales order items. BOMs of this category are linked to sales orders, so they are known as sales order
BOMs or order BOMs.
For Master pact, RM6, LC Component
Alternative BOM:
One product can be manufactured from alternative combinations of materials. The product is
represented by a number of alternative BOMs (alternatives). The differences between the alternative
BOMs are only small. Usually the only difference is in the quantity of individual components.
Work Center:
A work Center defines the organisational units where operations or work steps are carried out that
produce outputs of work. Each work center is assigned to a cost center for specific time periods that are
defined in the work center master records.
Work Center in Schneider will represent a group of people, a group of machines or a single production
line.
Work Center will be based on the Production Routing.
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Routing:
Routing is a sequence of operations that describe the process and the resources used to manufacture a
product or a semi-finished product.
It defines:
 operations (work steps) and their sequence
 where the work must be done (work centers)
 how much time is needed for the operation
 the quality checks to be carried out
 what materials have to be used (and when)
 The activities to be produced in the operations as a basis for determining dates, capacity
requirements and costs.
Allocation of components will be done to related operations.
The routing is to be defined based on the production flow and the layout on the shop floor.
The routing will consist of work centres which can be differentiated through the various operational
functions.
The routing & rate routing will include the standard times: Labor, machine time, setup, other activities
etc.
Rate Routing:
Rate routings meet the needs of rate-based production schedules in the R/3 PP Module. It contains
specification for production rate, setup and teardown times and assigned production activities. This is
usually used for repetitive manufacturing.
Production Version:
A production version determines which alternative BOM is used together with which task list/master
recipe to produce a material.
For one material, we can have several production versions for various validity periods and lot-size
ranges.
Production versions are used in discrete and repetitive manufacturing.
Production versions are used in material requirements planning (MRP), production order creation, and
product costing to select the most suitable task list or recipe and the corresponding material list.
Production version will be used for DISBOS products
Production Order:
A production order defines which material is to be processed, at which location, at what time and how
much work is required. It also defines which resources are to be used and how the order costs are to be
settled.
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In KSA, the following production order types will be used:

 YP10 Standard Production Order-MTS
 YP11 Standard Production Order-MTO
4.3.5.5 Standard Costing (CO – PC)
Material master Routing

BOM creation
data creation creation
Planned
Standard
activity
costing Mark Release
Unit price
run
Calculation
 Standard costing will be calculated at the beginning of the month, after raw-material costing.
 Necessary master data for standard costing are:
 Material master data (all of the necessary views and fields)
 BOM
 Routing
 Work Center – cost Center – activity type relations
 BOM : material usage quantity x raw-material planned prices
Routing: standard production times x activity unit prices
Related activity types are defined in the routing master data.
 Standard costing run will be calculated for the next period. Costing results will be analysed and
checked.
 Costing results will be marked. The planned prices will update the “price of the next period” field in
material master data.
 Costing results will be released at the first day of the month. All of the stock accounts will be
valuated with the new planned prices. Variance accounts will be updated. (variances : standard cost
for the last period and standard costs for the current period) And the standard costing results will
update the “current period’s price” fields.
 A special costing variant will be used in standard costing run. (ZPPC)
4.3.5.5.1 Cost Component Structure

Controls how the results of activity price calculation or material costing are stored.
The cost component structure groups cost elements into cost components to show the following
information:
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 Activity prices for an activity type

 Cost of a process
 Planned cost of a product
In Product Cost Controlling (CO-PC), the cost component structure determines the attributes for passing
on the following costs:
 Material costs passed on to material valuation as the standard price or inventory price
 Cost of goods manufactured passed on to Profitability Analysis
In KSA, the cost component structure will be as follows:

110 Materials IG & OG
120 Packaging Materials
210 Direct Labor
220 Subcontracting Labor
310 Other production overheads (direct cost centers)
TOTAL COST OF THE MATERIAL (semi-finished or finished product)
4.3.5.5.2 Costing Variant

Contains all control parameters for costing, including parameters that control how cost estimates are
executed and which material prices or activity prices are used to valuate the costing items.
Costing variants will be defined and customized in Realization Phase.

 Planned costing
 Preliminary costing
 Actual costing
 RECO
 Other….
 …………
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4.3.5.6 Raw-Material Costing (CO-PC)
There are no BOMs and routings for raw materials in the system. Raw materials (ROH), packaging
materials (VERP) and trading goods (HAWA) will be included in this process, the raw material price will
be contractual price agreement with the vendor or purchase order price.
4.3.5.7 Preliminary Costing (CO-PC)

We precost a production order for the following purposes:
 To determine the planned costs for the material being manufactured based on the planned lot
size of the order
 To calculate the planning variances and use them to decide what production version to use
 To be able to determine the production variances at a later time
In sales-order-related production, we can use the preliminary costing for the production order for the
following purposes:
 To use the planned costs calculated in this way to determine the planned costs for the sales
order item
 To use the planned costs calculated in this way as the basis for results analysis
Preliminary costing will be run with a special costing variant. Costing will be calculated by the system
automatically according to the system status of the production order. (REL: released) There won’t be a FI
transaction at this step, such as valuating of stock accounts, etc.
Material costs: (BOM in the production order) planned material usage quantities x material unit prices
(planned)
Labor + Overhead costs: (Routing in production order) planned operation times x planned activity unit
prices.
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4.3.5.8 Actual Costing in PP Orders (CO-PC)

Actual costing in PP orders is not really actual costing. All of the confirmations and material movements
update the costs in production orders. But the activity unit prices are planned prices at that time. Actual
costing results won’t update the GL accounts.
Production orders, product cost collectors, and sales order items must have the status REL (released)
before they can be debited with actual costs.
Material costs: Material consumption from stock to PP orders x material unit prices (planned)
Labor + Overhead costs: Confirmed times in PP orders x planned activity unit prices
Time confirmations and material consumptions are actual in this step. Material unit prices and activity
unit prices are planned values. Their actual values will be calculated after period-end closing
transactions in FI and CO modules.
4.3.5.9 Subcontracting (CO-PC)
4.3.5.9.1 Subcontracting / Planned Costs
Special Purchasing
Material procurement BOM master
Info
master & costing types data
on the master Record
data creation creation
data creation
Standard
costing Mark Release
run
 Standard costing for the subcontracted materials will be calculated at the beginning of the month,
like standard products. Costing steps are same with the standard products. The difference in on the
valuation strategies. Necessary strategies will be defined in customizing, in costing variant.
 There won’t be routing master data for subcontracted materials in the system. BOM master data will
be created in the system. Special procurement indicator for “subcontracting” will be entered in the
material master data, in accounting and MRP views.
 Purchasing info record master data will be created in MM module. Purchasing info records will
include subcontracting labor prices and other conditions related with purchasing and procurement
processes. (Payment terms, delivery times, discounts, etc.)
 Material costs : Material quantity (BOM) x planned material prices
Subcontracting labor costs: subcontracting unit price in Purchasing Info Record x quantity
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 FI accounts (stock accounts) will be updated with the planned prices for the next period, after
standard costing run, marked and released.
4.3.5.9.2 Subcontracting / Actual Costs
Send materials
PO creation Goods receipt Invoice receipt
to the vendor
Period-end
closing
transactions
 Purchase order will be created for the subcontracted materials. There won’t be a production order for
these materials in the system. The components that the vendor needs to manufacture the end
product are specified in the purchase order.
 Materials will be sent to the vendor with the PO reference. Materials will be followed in special stock
statuts.
 The vendor performs its service and delivers the ordered material (the end product). The
consumption of the components is posted.
 Subcontracted materials will be receipt to our stocks. Stock accounts will be valuated with the
standard prices of the materials. Vendor invoice will be entered to the system in FI module.
 Material costs : consumed material quantities x actual material prices
Subcontracting labor costs: goods receipt quantity x actual unit price (invoicing price) for
subcontracting services
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4.3.5.10 Rework Process (CO-PC) ( Not in scope for KSA)
New PP order
Confirmations
PP order Rework creation
(time &
creation decision (without
material)
material)
Settlement Settlement
From rework from rework
Confirmations order order
to the main PP to the main PP
order order
 Routine production scenario will be completed. Confirmations and material consumptions will be
done in the production orders. Rework decision will be made at the final operation in routing: final
quality control.
 New production order will be created. The order type will be different than normal production order:
“production order without material”. Rework process will be managed in the rework order.
Confirmations will be made and material movements will be done in the rework orders.
 When rework process is finalized, Settlement rule will be defined in the order. Settlement rule will be
main PP order.
 Settlement will be done in CO. The rework costs will be posted to the main production order, and the
main production order’s costs will be increased.
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4.3.5.11 Period-End Closing Transactions / Actual Costing (CO-PC)
Period-end Actual activity

Revaluation WIP
transactions unit price
of PP orders calculation
in CCA calculation
Variance
Variance Variance Asset
Distribution
calculation analysis settlement
Revaluation at Actual Prices:

Revaluation at actual prices supplements revaluation of activity allocations between cost centers. It is
used to correct activity allocations that occurred previously from cost centers to other cost accounting
objects.
We will use revaluation at actual prices for the following objects:

 Internal orders
 Sales document items (for example, sales orders)
 General cost objects
 Projects
 WBS elements
 Networks
 Network activities
If a cost accounting object uses an activity from a cost center, we usually start with a plan price to
allocate the activity. This is because the actual price is calculated during period-end closing. In the actual
price calculation, the SAP system performs an iterative calculation of the prices for the activity types. To
do this, it uses the actual costs that were debited to the cost center, and the activities actually incurred.
During this process, the system accounts for all activity relationships between cost centers.
After actual price calculation, we can revaluate the objects at actual prices if they have used the
activities from cost centers. We do this using Revaluation at actual prices (revaluation). The system
always determines the variances between the costs posted up to this point and the costs that occur under
the new prices. The corresponding sender cost center is credited by the actual price revaluation and the
receiver is debited accordingly.
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WIP Calculation:
The WIP calculation function valuates the unfinished products. (Work in process) The WIP is valuated at
actual costs. Work in process is the difference between the debit and credit of an order that has not been
fully delivered. The system status of the manufacturing orders can be PREL (partially released) or REL
(released).
Variance Calculation:
Stage in the period-end closing process that determines variances for the following objects:
Production variances are calculated based on the different between the actual cost against the standard
cost of semi-finished and finished goods produced. Production variances can be analyzed in terms of
price, quantity and other variances.
The main variance categories are:

 Input price variance: Input price variances are caused by differences between the planned and
actual prices of the materials and activities used.
 Resource-usage variance: Resource-usage variances are caused by the use of different materials
and activities than were planned.
 Input quantity variance: Input quantity variances are caused by differences between the planned
and actual consumption quantities of materials and activities.
 Lot size variance: Lot size variances are only calculated if the planned quantity is different than the
confirmed quantity (the delivered quantity).
 Others….
Settlement:
Full or partial allocation of calculated costs from one object to another.
The following objects can be Settlement senders in KSA:

 Internal orders
 Service orders
 General cost objects
 Networks
 Projects
The following objects can be Settlement receivers in KSA:

 Assets
 Internal orders
 Profitability segments
 Cost centers
 Materials
 Networks
 Projects
 G/L accounts
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The following Settlement will be performed in KSA business scenarios:

 to GL accounts (WIP, variance accounts, warranty accounts, etc.)
 to material (stock accounts)
 to sales order (make-to-order strategy)
 to cost centers
 to CO-PA
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6.4.1 Project Costing (CO-PC & PS)
4.3.6.1 Master Data in PS

Project Definition:
The project definition is the framework for all objects within a project. The project definition contains
dates as well as organizational information that are binding for the entire project.
Work Breakdown Structure (WBS):

Hierarchical outline of an undertaking described in the project definition.
The work breakdown structure (WBS) forms the basis for the organization and coordination of a project.
A WBS consists of various WBS elements. The WBS elements describe specific tasks or actions in the
project to be carried out within a defined time period.
Work Breakdown Structure Element:

WBS elements are the individual structure elements in the work breakdown structure (WBS).
The term describes a concrete task, or a partial task, which can be further subdivided.
Network:
Object containing instructions on how to carry out tasks in a specific way, in a specific order, and in a
specific time period.
Activity:
An activity is a task in a network which has a defined start and finish. An activity can be broken down into
activity elements.
There are four categories of activities in the Project System:
 Internal activities
 External activities
 General costs activities
 Service activities
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4.3.6.2 Standard Costing (plan costing)
Equipment Master
Data Creation Planning of
purchasing
(materials & services
BOM & Routing
Creation
Planning of
Standard Costing financial expenses
Run
Planning of customer
related expenses
Mark & Release
Planning of Services Planning of

Activities other costs
Planning of
labor activities
Costing run on
the project
Planning of
Project hrs activities
Reporting
Planning of
other project costs
4.3.6.2.1 Equipment Standard Cost

The standard cost of the equipment mainly is composed of two main parts, product cost of the
equipment and the Project Office cost that will be used in design of this equipment. Product cost may
only be calculated after the BOM and routings are finished. That is trivial because the costing of a
product will be calculated by the material used for this product and the activity costs that will be spent for
production will be calculated by the time planned for production and standard activity unit price in the
relevant cost centre.
As the BOM and routing is completed, it is so important to run the standard costing for the newly created
this finished good. The level of the Product Cost Detail may be seen in CO-Product Costing.
Of course we have to refer at this point to the materials that have no material code that are existing on
Equipment BOM’s. Normally there is no standard cost for materials without code. But to make the cost
planning efficient on the BOM there can be a forecasted cost on this BOM line. Otherwise, only after
Purchase Orders are created for these materials the Price on Purchase Order will be seen for these
materials which will delay the complete cost calculation of the equipment and so the project.
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The Project office standard cost will be calculated by the time planned and entered to PS (work in hours
on activity) by the Project Office Responsible, and the Standard Unit Price of the Labour Activity in Cost
Centre Project Office.
These two will give us the equipment cost which will be accumulated on related Equipment WBS. Since
every equipment on the Project will have different WBS, it will be easy to distinguish the cost of different
equipment on the project.
4.3.6.2.2 Planning of Purchasing and Subcontracting

The initial cost planning for the materials and the subcontracting activities to be procured by EPS will be
done on PS module as these are added to project. The cost of the materials to be internally procured will
be calculated by the standard price of this material and the quantity allocated for the project.
For external procurement, there will be a price entry on PS as these are added to activities as
components. This will be seen as the planned costs. Later when the Purchase Orders are created, the
prices on Purchase Order will be regarded as planned costs.
4.3.6.2.3 Planning of Financial Expenses

The only financial cost that will be charged to the project will be the Insurance expense. The planned
cost will be entered as a cost element to Project Plan.
4.3.6.2.4 Planning of Other Costs

The planning of the other costs (such as plane and meal expenses of EPS project and customer) will be
entered as cost expenses to the project.
4.3.6.2.5 Planning of Services Costs

The Services departments activities that will be used in the project will be planned first by the planned
man-hour of this activity and the planned hours will be multiplied by the labour activity unit price of the
Services Cost Centre.
Later as the Services department is notified and a CS order is created, the planned cost on the CS order
will be regarded as planned cost.
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4.3.6.3 Actual Costing
PP Order Purchasing of
Confirmation materials and services
with actual prices
Actual costing of
PP Orders Actual financial
expenses (insurance)
Actual costing of
CS Orders Actual
customer related
expenses
Actual labor Activity

(Confirmation)
Actual
costs-others
Actual project Hours

(Confirmation)
Settlement to PA
(monthly)
Actual expenses
of activities
Reporting
4.3.6.3.1 Actual Production Costs

Actual Production costs are settled to the Equipment Finished Good Stock when the goods receipt is
done. Here all the costs are actual, actual quantity of material and actual price of material, actual labour
spent and actual unit price of Labour activity. When the equipment is delivered to Customer, the Finished
Good will be deducted from Stock and Project WIP will increase with this same amount.
4.3.6.3.2 Actual Services Costs

On the CS order the actual material, labour and other expenses will be accumulated. These actual costs
will be affected to Project Actual Costs. Actual costs on the CS orders will be settled to the project. So,
services costs will be accumulated on the project.
4.3.6.3.3 Actual Expenses

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Expenses such as insurance, transportation, or plane will be related to the project during the entry of the
invoice. (Since we do not open a Purchase Order for these expenses, but directly post the invoices from
Accounting) These invoices had to be related to the Project during the invoice approval cycle.
4.3.6.3.4 Settlement to PA
These actual expenses will be accumulated at WBS header (Project WIP) until an invoice is made. As
the invoice is prepared from the SD, it is important to distinguish between partial invoicing and last
invoice. When the last invoice is prepared all the actual costs are to be Settled to Cost of Goods Sold,
and the turnover and all the costs are also to be settled to Profitability Analysis at the end of each period.
The product pyramid will be on Dummy material on SD order. Therefore the related activity/Family will
get this turnover and costs.
For partial invoices the situation is more complex. There may be unrealised cost on the Project but the
invoice may be related to some part of it. Therefore to put all the accumulated cost to COGS and PA
may result in wrong judgements. So the cost to be settled here has to be calculated by the forecasted
margin.
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7.4.1 Services Costing (CO-PC)

Costs of Services activities will be followed on CS orders.
CS orders will be cost objects in CO. Actual costs will be collected on CS orders, and Settled to the
related objects. (SD orders, cost centers, GL accounts, CO-PA, etc…)
Services projects will be managed in PS module. The main costing process will be same with the other
projects in PS.
Planned Services activity unit price will be calculated at the beginning of the year, and will be used
during the year. Actual activity unit price will not be calculated. The differences will be followed on
“commercial based costs”.
Costing items of CS order will be:

 Material costs
 Labor costs
 External labor (subcontracting costs)
 Overheads
 Expenses (*)
 Others
(*) job expenses (specific to CS order: travel, accommodation, food, etc.)
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4.3.7.1 Planned Costs
Definition of
Planning of
CS order Task list & external
Component other
Creation & Activity services
assignment costs/manua
release planning (subcontract
l
ing)
Cost
Planning
 CS Orders will be created and released.

 Necessary components will be assigned to the CS orders. Task list will be defined in the CS orders.
Activity planning will be made in the CS orders.
 External services (subcontracting jobs) will be defined in CS orders, if needed.
 Other costs will be planned in the CS orders manually.
 Cost planning programme will be run in CS order.
 Estimated costs will be entered to the system, if needed. Cost estimation will be managed out of
SAP, before planned costing run.
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4.3.7.2 Actual Costs
Period-end Actual
closing activity
transactions unit price
in CO calculation
Material Purchasing
CS order consumptio of external Revaluation
Invoice entry
Confirmatio n services of
from FI
ns (MM (subcontract CS Orders
movement) ing)
 CS orders will be created and released.

 During the service orders, necessary materials will be posted from stock to service orders. All of the
materials will be managed with reference in Services Department.
 If defined, necessary subcontracting services will be purchased with a purchase order in MM module.
Account assignment type will be “order” in the PO item, and the related Service order number will be
defined in PO account assignment field. Related GL account will be defined in PO, too. With invoice
entry transaction, the value of the external services will be posted to the service order.
 Other additional costs will be posted to the related service orders at the invoice entry transaction
automatically. The important point is link between the invoice and service order number. Related
employee in services Department will provide necessary information (service order number) for FI
posting to the accountants.
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8.4.1 Cost of Quality (CO-CCA & CO-PC)
4.3.8.1 IQC – Appraisal Costs
Inspection Month Begin Control Month end

Work center
Plan Operations Operations operations
 Standard labor time will be entered to inspection plans, quality control operations.
 QM work centers will be assigned to the related cost centers.
 CO activity types will be assigned to the operations in inspection plan. QC labor activity will be used
in the IQC calculation.
 QM orders will be created and assigned to the materials at the beginning of the month. Materials will
be grouped (work center basis) and assigned to the QM orders.
 Test results will be recorded. Activity confirmations (with standard activity price) will be entered to the
system and multiplied by “planned activity unit prices”. Labor expenses will be accumulated on the
QM orders.
 Materials consumed during the income quality control tests will be posted to the related cost center.
 QM orders will be closed at the end of the month. (system status will be TECO : technically closed)
 Settlement rule of the QM orders will be cost centers. Settlement will be done in CO module.
4.3.8.2 FQC – Appraisal Costs
Routing Work center PP Order Confirmation
 Final quality control operations will be defined in PP routings. The last operation will be final quality
control. A special control key will be used in the routings. (QM01)
 Standard final quality control times will be entered to the routing master data.
 Final quality control operations will be assigned to the related work centers. Direct labor activity will
determine in the routings.
 Inspection lots are generated when PP orders are created.
 Results will be recorded for the inspection lots. Final quality control times will be confirmed in PP
orders with standard times. Confirmed standard quality control times will be multiplied by the planned
labor activity unit prices.
 Labor times will be accumulated in the PP orders, final quality control operations.
 Final quality control costs will be added production costs.
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4.3.8.3 Reworks – Non-Conformity Costs
Rework Confirmatio Month end

PP Order Confirmation
Order n operations
 Rework process is explained in PP scenarios. Topic: 4.4.5.10. Rework process…
4.3.8.4 Scraps – Non-Conformity Costs
Customer
IQC FQC
Returns
 Non-conform materials will be posted directly to the related cost centers in IQC operations.
 Non-conform semi-finished products and finished products will be confirmed on the PP orders as
scraps.
 Customer returns will be entered to the system in SD module. Non-conform finished products will be
posted to Services cost center. Control and maintenance times will be accumulated in CS orders.
Confirmed times will be multiplied by services labor activity unit price.
 Material costs + services labor costs = costs of customer returns.
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9.4.1 Profit Center Accounting (CO-PCA)

CO-PCA primarily serves to calculate internal (plan and actual) results for profit centers according to the
cost-of-sales accounting approach.
In addition, CO-PCA lets us analyze certain balance sheet items by profit center. This also makes it
possible to control the necessary key figures for an area of responsibility.
Profit Center Accounting is account-based. That means, the values are updated in CO-PCA according to
account. Consequently, we can reconcile the data here with that in Financial Accounting.
CO-PCA provides us with a comprehensive and flexible information system for analyzing our data by
period. We can access the original postings from FI, CO, SD, MM, and so on directly to identify potential
weaknesses.
EC-PCA provides you with a comprehensive and flexible information system for analyzing your data by
period. You can access the original postings from FI, CO, SD, MM, and so on directly to identify potential
weaknesses. Using the report/report interface, you can drill down to the information systems of other
components.
The graphic below shows how a report is built in the cost-of-sales approach.
1. The revenues and the costs of sales are listed in the report rows by account.
2. Variances in production orders are assigned via the accounts to which the data was posted. You
can assign all debits and credits to the production cost centers using a separate function area,
for example Production, for the variances in the production cost centers. The difference which
arises gives you the desired variances.
3. The rest of the overhead for the period is entered in the corresponding report rows by function
area.
4. The report rows for data from non-operating results are found using the corresponding accounts.
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4.3.9.1 Profit Center Structure

In KSA, the following profit centers are defined:
 NRG BU
 Power
 ISC
 Services
 Energy Efficiency (EEM)
 Yemen BU
 S2 Business
 Support functions profit center
 Dummy
(*)The dummy profit center is the default profit center to which data is posted when the corresponding
object has not been assigned to a profit center.
We can find out which objects are not assigned to profit centers by analyzing the postings assigned to
the profit center. We can also assess or distribute data from the dummy profit center to the desired profit
centers.
It may happen that some objects in our system are inadvertently left without an assignment to a profit
center. In this case, postings to accounts which are defined as revenue or cost elements are assigned to
the dummy profit center of the controlling area to which the object posted to belongs. This ensures that
us internal and financial accounting data are reconciled.
The dummy profit center is structured just like a normal profit center. The only difference is a flag
indicating that it is the dummy profit center.
The other “dummy” profit centers are specific for KSA. They’re characteristics/definitions are like normal
profit centers.
(**) Dummy- profit centre are “allocation” profit centers. They will be used for cost allocations.
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Profit Center Hierarchy

PME01
Profit Center Group Support Business

Production Related
Energy – Sub group Dummy Profit Ctr.
NRG BU
Oil & Gas FIN
Power – Sub group

HRD
Power MNL
ISC
MKT
Services
TND
EEM
Industry SPS
Industry SFB
Building
Building
ITB
ITB
Yemen
Yemen
S2
S2 B
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4.3.9.2 Profit Center Assignments

We divide our company into profit centers by assigning all the objects which contain profit-related data to
your profit centers. By making these assignments, we can also display selected balance sheet items in
CO-PCA.
We can only assign objects from one controlling area to a profit center
These assignments make it no longer necessary for us to post our data explicitly to profit centers. The
system automatically transfers the data to CO-PCA when it is posted to the original object. We can
reflect both actual and plan data from the assigned objects in Profit Center Accounting in this manner.
The following data is transferred to Profit Center Accounting:

 Revenues and sales input - through assignment of sales document items
 Direct costs - through assignment of production orders and cost objects
 Overhead costs - through assignment of account assignment objects from Overhead Cost
Controlling (cost centers, orders etc.)
An object’s assignment to a profit center is stored in that object’s master record.
4.3.9.2.1 Assigning Materials
Assignments of materials to profit centers provide the default values for assignment of sales orders and
manufacturing orders.
With internal goods movements also (such as stock transfers or material withdrawals) the profit center is
derived from the material master, if no other account assignment has been made.
The assignment of materials also forms the basis for the transfer of material stocks to Profit Center
Accounting.
The assignment material  plant is only valid for a single plant.
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In KSA, all materials will be assigned to the related profit centers in master data. Core Unit products and
LV products will be managed in the same plant (SA01). The differentiation for common materials
between profit center will be made on the CO objects. (sales orders, production orders, etc.)
4.3.9.2.2 Assigning Cost Centers
We need to assign cost centers to profit centers so that we can reflect all the primary costs from
Financial Accounting and all secondary allocations from Cost Center Accounting in Profit Center
Accounting.
The assignment of a cost center also implicitly assigns all the assets which belong to that cost center to
the profit center.
In KSA, following cost center – profit center assignment will be used:
Cost
Profit
Center short Text of the CC
Center
s
BL100 BLG General BLG

BL200 BLG Marketing BLG
BL304 BLG Vertical Sales BLG
BL300 BLG Sales BLG
BL400 BLG Projects BLG
EE100 EE General Management EEM
EE400 EE Projects EEM
IN100 IND General Management IND
IN200 IND Marketing IND
IN300 IND Sales IND
IN304 IND Vertical Sales IND
IS100 ISC General Management ISC
IS301 ISC Diffuse market Sales ISC
IS200 ISC Marketing ISC
IS300 ISC Riyadh Sales ISC
IS303 ISC Jeddah Sales ISC
AP100 A P C GENERAL ITB
NG100 NRG General Management NRG
NG200 NRG Energy Marketing NRG
NG300 NRG Energy Sales NRG
OG100 OGP General Management OGP
OG200 OGP Marketing OGP
OG400 OGP Projects OGP
OG300 OGP Sales OGP
PC100 PCO General Management PCO
PC300 PCO Riyadh Sales PCO
PC200 PCO Marketing PCO
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PC301 PCO Distributors Sales PCO

PC302 PCO Panel Builder Sales PCO
PC304 PCO Verticalized Sales PCO
PC303 PCO Jeddah Sales PCO
SB100 S2 General Managemnent S2B
SR100 Services General Management SRV
SR400 Services Porjects SRV
SR600 SERVICE I T & C SRV
SR300 Services Sales SRV
YE100 Yemen General Management YEM
CP100 Country President's Cost FIN
FI100 Finance General Management FIN
FI201 Accounts Transactional FIN
FI202 Accounts Tax and customs FIN
FI203 Accounts Legal FIN
FI204 Accounts Other Functions FIN
FI301 IT Infrastructure & Network FIN
FI302 IT Application Management FIN
FI303 IT User Support FIN
FI304 IT Transformation Projects FIN
FI305 IT Other Functions FIN
FI101 Management Contorl FIN
HR101 Recruitment / Internal Communcation HRD
HR201 Training HRD
HR301 Administration HRD
HR401 Maintenance HRD
HR501 Safety & Security HRD
HR102 Transactional shared services HRD
ML100 M&L General Management MNL
ML501 M&L Methods MNL
ML101 M&L Production / Fab & Assembly MNL
ML601 M&L Purchase MNL
ML701 M&L Logistics MNL
M&L Logistics- Transportation
ML702 Outbound MNL
ML801 M&L Store / Incoming Goods & Issue MNL
MK200 Marcom - Commercial cost MKT
MK201 Marketing support / Price Excellance MKT
QA100 Quality Assurance QAM
SR500 AFTER SALES SERVICE QAM
SO401 Automation Projects SFB
SO405 Design General SFB
SO402 Project SFB
SO404 Design Projects SFB
SO403 Solution 3 Projects SFB
SO900 Tender TND
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SP100 SPS Sales Support SPS

SP305 SPS Promotions SPS
4.3.9.2.3 Assigning Assets
By assigning assets to profit centers, we can represent profits and losses due to the sale of assets as
well as accrued depreciation and interest in Profit Center Accounting.
This assignment also makes it possible to transfer asset portfolios to Profit Center Accounting.
An asset is always transferred implicitly to Profit Center Accounting via an assigned internal order or cost
center. Where the asset is assigned to both objects, it is transferred to the profit center contained in the
master data for the internal order.
Other assignments will be managed during transactions, if needed.
4.3.9.3 Revenue & Cost Elements
The transaction data in Profit Center Accounting is stored in the accounts contained in the chart of
accounts for our controlling area. These accounts include those from Financial Accounting which are
used in Controlling (primary revenue and cost elements) and accounts which occur only in controlling
(secondary revenue and cost elements).
In addition, we can also transfer some accounts used only in Financial Accounting (payables/receivables,
material stocks, work in process, and so on) in order to analyze assets, material inventories, product
stocks, and changes in stock by profit center. These particularly include payables and receivables,
material stocks; work in process, and others.
We can define any number of hierarchical structures of accounts for use in the information system,
allocations and planning. These structures are called account groups. These account groups are only
valid in Profit Center Accounting.
Cost and revenue account groups will be defined in Realization Phase.
4.3.9.4 Statistical Key Figures
Statistical key figures provide information on non-monetary data for profit centers, such as the number of
employees, number of machines, capacity usage, market information, and so on. We can group
statistical key figures together into statistical key figure groups.
4.3.9.5 Planning
Planning will not be done in CO-PCA. Only actual data will be monitored on profit centers.
4.3.9.6 Actual Posting
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All the postings in Financial Accounting, Materials Management, Assets Management and Sales and
Distribution and Controlling which affect profits are reflected in Profit Center Accounting.
Profit centers cannot receive direct postings in the R/3 System. Instead, the data is posted to other
objects and passed on from there to a profit center in Profit Center Accounting. This makes it possible to
display our company’s results by profit center based on the original postings and with no additional work.
The system stores the following currencies in Profit Center Accounting:

 Company code currency (SAR)
 Any one Profit Center Accounting currency for each controlling area (EUR)
 The currency in which the business transaction was processed (transaction currency)
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4.3.9.7 MM Goods Movements

The graphic below illustrates how the system determines the profit center for an MM goods movement.
In Profit Center Accounting, the data in the MM document is posted to the profit center determined by the
system.
As we can see from the graphic, the profit center for an MM goods movement can be determined either
dynamically (the material/plant combination in the document is decisive here) or indirectly via the
preceding document.
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4.3.9.8 SD Billing Documents
The graphic below illustrates how the system determines the profit center for an SD billing document. In
Profit Center Accounting, the data in the MM document is posted to the profit center determined by the
system.
For an SD billing document, the profit center is - with one exception - always determined indirectly via
the preceding document.
The exception to this rule is an SD billing document with valuated project stock. With this type of billing
document, the profit center is determined dynamically from the WBS element contained in the actual SD
billing document.
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4.3.9.9 FI Postings and FI-AA Assets Postings
The graphic below illustrates how the system determines the profit center for FI and FI-AA postings. In
Profit Center Accounting, the data in the FI or FI-AA document is posted to the profit center determined
by the system.
The profit center is always determined dynamically from the FI or FI-AA document.
4.3.9.10 Transferring Balance Sheet Items
We can transfer the following balance sheet items to Profit Center Accounting in the standard R/3
System at end of period:
 Payables and receivables
 Material stocks
 Assets
 Work in Process
4.3.9.11 Assessment & Distribution
Assessment and distribution are described under the umbrella term Allocations.
Assessment and distribution of relevant overhead costs is performed at period closing (actual data) or
plan closing (plan data). This is usually done directly in CO and then reflected in the data in Profit Center
Accounting.
If we have an allocation profit center in our profit center hierarchy, we may need to assess or distribute
costs again in Profit Center Accounting.
In Profit Center Accounting, the allocation function allows you to allocate the following plan and actual
data.
 Costs (assessment and/or distribution)
 Revenues and sales deductions (assessment and/or distribution)
 Balance sheet items (distribution)

Assessment is made using a special cost/revenue element.
In distribution, the original cost/revenue element/account number is retained.
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10.4.1 Profitability Analysis

There are two forms of profitability analysis in CO-PA:
 Costing-based profitability analysis
 Account-based profitability analysis
Profitability analysis in CO-PA is based on the cost-of-sales accounting method. In KSA, we will activate
“Costing-based Profitability Analysis”.
Costing-Based Profitability Analysis:
A form of profitability analysis in CO-PA.
Costing-based Profitability Analysis represents costs, revenues, and revenue deductions for internal
controlling purposes. The direct costs are collected from the relevant material cost estimate for the
product sold. All values are stored in value fields.
Cost of Sales Accounting:

Cost-of-sales accounting is a type of Profitability Analysis. It is used to support decision-making in sales
and marketing departments. With this approach, the revenue for the units sold is transferred from the SD
system or from an external billing system to CO – PA. Sales deductions and manufacturing costs are
assigned to each unit sold.
Profitability Analysis makes it possible evaluates market segments, classified by product, by customer,
by profit center, and so on. This CO module can answer this type of =S= questions like margin by
customer, by country, by DAS activity and by product family.
4.3.10.1 Characteristics
The characteristics in Profitability Analysis represent those criteria according to which you analyze your
operating results and your sales and profit plan. Valid values of these characteristics are combined to
form profitability segments.
Profitability Segment:
Object within Profitability Analysis to which costs and revenues are assigned.
A profitability segment corresponds to a market segment. We can calculate the profitability of a

profitability segment by setting off its sales revenues against its costs.
A profitability segment in an operating concern is defined by a combination of characteristic values.
Field Name Description Use Data Type Length Orig. Table Data Element
Fixed Characteristics
BUKRS Company Code F Char 4 BUKRS
FKART Billing Type F Char 4 FKART
GSBER Business Area F Char 4
KAUFN Sales Order F Char 10
KDPOS Sales Order Item F Numc 6
KNDNR Customer F Char 10 KNA1 KUNDE_PA
KOKRS CO Area F Char 4 KOKRS
KSTRG Cost Object F Char 12 KSTRG
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Field Name Description Use Data Type Length Orig. Table Data Element
PPRCTR Partner Profit Center F Char 10 PPRCTR
PRCTR Profit Center F Char 10 MARC PRCTR
PSPNR WBS Element F Numc 8 PS_PSP_PNR
RKAUFNR Order F Char 12 AUFNR
SPART Division F Char 2 MARA SPART
VERSI Version F Char 3 RKEVERSI
VKORG Sales Organization F Char 4 MVKE VKORG
VRGAR Record Type F Char 1 RKE_VRGAR
VTWEG Distribution Channel F Char 2 MVKE VTWEG
WERKS Plant F Char 4 WERKS_D
Copied
Characteristics
ORTO2 Zone (District) F Char 35 KNA1
VKBUR Sales Office (Region) F Char 4 VBAK
VKGRP Sales Group (Sub F Char 3 VBAK
Region)
KDGRP Customer Group F Char 2 KNVV
KVGR1 Customer Group-1 F Char 3 VBAK
KVGR2 Customer Group-2 F Char 3 VBAK
Customer Hierarchy-1
Product Hierarchy-1
Product Hierarchy-2
Product Hierarchy-3
Product Hierarchy-4
Product Hierarchy-5
Product Hierarchy-6
AUART Sales Order Type F Char 4 VBAK
Project Number
Country
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Characteristic Values in KSA customizing:

BUKRS – Company Code
KSA1– Schneider Electric KSA
FKART – Billing Type

ZKF2 – Standard / Distributed Billing Document
ZKP2 – Project Billing Document
ZL2 - Debit Memo-KSA
ZPLK - Project Debit Memo-KSA
ZRE - Credit fr ReturnsKSA
KOKRS – CO Area
ME01 – Schneider Electric KSA
SPART – Division
Sl.No Divisions Description

1 11 Enrgy
2 12 Oil&Gas
3 13 Power construction
4 14 Services
5 15 Installation system&contols
6 16 Building automation
&security
7 17 Indusrtry
8 18 ITB
9 19 Schneider internal sales
Export
10 21 Energey efficeancey
11 22 S2
12 23 Yemen -KSA
VKORG – Sales Organization

1100-Products
1300-Projects
1400-Service
1800-Export
VRGAR – Record Type

Key which separates data in CO – PA according to its source.
A – Incoming Sales Order

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B – Direct Posting from FI

C – Order/Project settlement
D – Overhead Costs
F – Billing Data
G – Customer Agreements
H – Statistical Key Figures
I – Order-rel. Project
X – For manual entries if required
VTWEG – Distribution Channel
Sl.No Distribution Channel Description

1 30 Local
2 40 Export
3 00 common
WERKS – Plant
SA01 – EPS
4.3.10.2 Value Fields

Value fields contain values and quantities that were updated or planned for particular objects.
In costing-based profitability analysis, value fields represent the highest level of detail at which we can
analyze quantities, revenues, sales deductions, and costs for profitability segments in profitability
analysis or contribution margin accounting. We are free to define which revenues and costs go into which
value fields for profitability reports or sales and profit planning when we set up our system.
The following value fields will be used based on the requirements known as of today:
 Pricing conditions of SD module
 PR00 – Gross price
 PN00 – Net Price
 Discount types:
 ZD01 - % of basic discount
 ZD02 - % of additional discount
 ZD03 - % campaign discount
 ZD05 - % Commercial discount
 ZDO6 - % Contract Dis-1
 ZDO7 - % Contract Dis2
 ZDO8 - % Marketing Discount
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 ZDO9 - % Dis-Free Goods

 ZD90 - % cash discount
 ZSDK- % Special discount
 Sales quantity (invoiced)
 Order intake quantity
 Cost of Goods Sold
 Standard price
 Cost components in PC module
 Materials Intra Group
 Materials Outer Group
 Materials without reference
 Packaging Materials
 Direct Labor
 Subcontracting Labor
 Other production overheads (direct cost centers)
 IBC – Overheads (indirect labor + overheads on the indirect cost centers – depreciation)
 IBC – Depreciation (direct c.c. + indirect c.c.)
 DVC – Material
 DVC – Labor
 DVC – Others
 IBC
 CBC
 ABC
 Management allocations
 Variance (if needed)
 Other value fields will be defined during Realization Phase, if needed.
4.3.10.3 Derivation
Derivation is the process by which the system automatically fills characteristic fields that do not have
values.
Derivation Rule:
Rule that we define in derivation using IF-THEN logic, which controls how certain target characteristic
values are automatically derived from source characteristic values.
Derivation Strategy:
The derivation strategy is a list of steps the system performs to derive unknown characteristic values
from known values.
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In KSA, “customer hierarchy” and “product hierarchy” characteristics will be derivated in CO-PA. Other
derivation rules will be defined in Realization Phase, if needed.
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4.3.10.4 Valuation
Valuation is the process of identifying or calculating cost accounting values in Profitability Analysis. We
can valuate both plan and actual data.
In KSA, “valuation using material cost estimates” method will be used. This method makes it possible to
determine the costs of goods manufactured when a transaction is updated in CO-PA. This method is the
main integration point between CO-PC and CO-PA.
Standard cost estimate results will be updated at the beginning of the period. All of the transactions will
be transferred to CO-PA with standard costing results. After period-end closing transactions in CO,
Material Ledger results will update related value fields in CO-PA.
Special conditions types will be used for configurable products in SD. Because, standard cost estimate
will be calculated in SD orders. The costing results will not update material master records. All of the
information will be kept in the sales orders. And the costing results will be transferred to CO-PA with
these special condition types. Necessary condition types will be defined during Realization Phase
according to the different scenarios.
Standard cost estimate, actual costing and costing for configurable products will be based on different
costing variants in CO-PC.
4.3.10.5 Actual Data Flow
4.3.10.5.1 PA – MM
 No actual data flow.
4.3.10.5.2 PA – PS
 Cost planning
 Actual costing
 Settlement of cost and revenues
4.3.10.5.3 PA – FI
 Not planned.
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4.3.10.5.4 PA – CCA
 Cost allocations
 Overhead costs (administrative, technical, commercial, etc.)
4.3.10.5.5 PA – PC
 Planned costs (standard costing results)
 Actual costs
 Variances
 WIP calculations
 Budget costs
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4.3.10.6 Budgeting Process
Sales budget is not in scope for KSA
4.3.10.7 Reporting
Standard reports provided for CCA,PCA,CO-PC & CO-PS apart from that the following reports also
available.
Profit & Loss by Schneider activity – BW report

K Y View Profit and loss _Business Unit - BW report
Working Capital employed & Expenditure report- BW report
FZE Booking Integration with EPS for KY View- BW report
Project backlog report
DVC/MBC/SFC By function- BW report
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4.4 Integration with other modules in the target state

In the system single processes of the CO module are integrated to other modules in the following
processes:
1.4.1 CO - PP
- Master data : BOM, routings, work center – cost center assignments
- Cost centers, activity types
- Standard values – activity types – costing formulas
- Production types
- Make-to-order
- Make-to-stock
- Collective orders
- Repetitive manufacturing
- District manufacturing
- Variant configuration
- PP order types
- Confirmations
- Settlement rules
- SOP, MRP results
- Information systems
- Special scenarios
- Reworks
- Scraps
- Subcontracting scenarios
- ……
- Costing and profitability analysis
2.4.1 CO – PS
- Project definition, WBS, WBS element, network, activity
- Budget planning
- Plan costing
- Modifications / revisions
- Confirmations
- Result analysis
- Settlement to COGS and to CO-PA
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3.4.1 CO – CS
- Master data : task lists, work center – cost center assignments,
- Cost centers, activity types
- Service order types
- Confirmations
- Subcontracting scenarios
- Settlement rules
- Billing process
4.4.1 CO – MM
- MM movements (ML transactions)
- Consumption movements to CO object (production orders, projects, cost centers, service
orders, etc.)
- ML (stock valuation in different currencies)
5.4.1 CO – SD
- Pricing conditions
- Organizational structure (SD areas)
- SD document types (order types, billing types)
- Make-to-order strategy / plan costing in SD orders
- Budget process (Sales budget, estimated sales prices, forecasting methods, PA – SIS data
transfer, etc.)
- Profitability segment, profitability reports, etc.
- Settlement to CO-PA
6.4.1 CO – QM
- Cost of quality report
- QM orders
- Task lists, activity types, work center – cost center assignments
- Confirmations
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7.4.1 CO – FI
- Primary cost element master data (cost & revenue elements)
- Posting from FI (invoice entries, etc.)
- Records from to FI to CO objects
- Transfer of balance sheet accounts to PCA
-
8.4.1 CO – FA
- DAI follow-up / real internal orders
- Depreciation costs on the cost centers
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5 Change in present organisation and result aspects

 Strong integration between logistic transactions and financial results
 Plan costing / standard costing concept
 Profit center accounting concept
 Order based costing (production orders, services orders, projects, etc.)
 Costing in two currencies (SAR & EURO) with transaction based conversions
 Less manual work, automatic records on stock and cost accounts
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6 Interface requirements
6.1 Data Take Over

There will be no data take-over for CO module. All the master data of CO module will be created
manually.
Only sales figures (quantities and amounts) of past 2 years will be transferred from excel to SAP with a
batch input programme.
Estimated purchasing prices for budget will be transferred to the system from excel environment.
6.2 Interfaces
No interfaces in current phase.
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7 Description for the system outputs and reports
7.1 Abap Reports

Standard reports of CO module are provided and the following reports are finalised in BW .
Profit & Loss by Schneider activity – BW report

K Y View Profit and loss _Business Unit - BW report
Working Capital employeed & Expenditure report- BW report
FZE Booking Integration with EPS for KY View- BW report
Project backlog report
DVC/MBC/SFC By function- BW report
7.2 Other standard outputs/print

There is no output for CO module.
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Deleg
Supp
Busi
Prof
ness
ated
ort
it
Funct
Supp
Busi Business blueprint CO
Phoenix
cent Team Sajid Basha
Version: 01 Created: 22.07.10 Printed: 11.03.15 Designed:
9. List of used abbreviations

KSA: Schneider Electric KSA
EPS : Electronic Department
WBS: Work Breakdown Structure
BOM : Bill of Material
SD : Sales and Distribution Module
PS : Project Systems Module
MM : Material Management Module
CS : Customer Services Module
PP : Production Planning Module
FI : Financial Accounting Module
QM : Quality Management Module
FI-AA or FA : Asset Accounting Module
CO-PA: Controlling – Profitability Analysis Module
CO-PCA: Controlling – Profit Center Accounting Module
CO-CCA: Controlling – Cost Center Accounting Module
CO-PC: Controlling – Product Cost Controlling Module
SOP: Sales & Operation Planning
SIS: Sales Information System
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For implementation project of system SAP

3 TARGETS, REQUIREMENTS AND EXPECTED BENEFITS...............................3

1.1 Targets (objectives) and Requirements...................................................................3

4 MODULE CO OPERATION IN TARGET STATE...................................................3

4.1 Supposed Implementation of Program-unit and Function in Module CO.............3

4.2 Organisational structure of module CO in target state..........................................3

4.3 Master data................................................................................................................ 3

4.4 Implemented process description (Process model)............................................17

4.4.4.10 Rework Process (CO-PC)...................................................................................................................32

4.5 Integration with other modules in the target state..................................................3

5 CHANGE IN PRESENT ORGANISATION AND RESULT ASPECTS................... 3

6.1 Data Take Over........................................................................................................... 3

7 DESCRIPTION FOR THE SYSTEM OUTPUTS AND REPORTS.........................3

7.1 Abap Reports............................................................................................................. 3

7.2 Other standard outputs............................................................................................. 3

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9 LIST OF USED ABBREVIATIONS.......................................................................77

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3 Targets, Requirements and Expected Benefits

3.1 Targets (objectives) and Requirements

3.2 Expected Benefits

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4 Module CO Operation in Target State

4.1 Supposed Implementation of Program-unit and Function in

4.2 Organisational structure of module CO in target state

Schneider Electric KSA Company Code will be KSA1

2.4.1 Controlling Area

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3.4.1 Operating Concern

4.3 Master data

4.3.1.1 Cost Center

Each cost center will be assigned to a category:

4.3.1.2 Cost Center Group

4.3.1.3 Cost Center Hierarchy

Standard hierarchy code will be ME01

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Cost Center Hierarchy

Cost Center Group1 Cost Center Group 2

Energy – Sub group Solution center

Power – Sub group Marketing

Power Mfg. & Logistic

ISC EPS Indust

Industry Finance & Accounts

Building HR & Admin

Building Hr& Admn

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4.3.1.4 Cost Element

4.3.1.4.1 Primary Cost Elements

The following cost element categories will be used in KSA:

Primary cost element will be defined after chart of accounts creation.

4.3.1.4.2 Secondary Cost Elements

The following cost element categories will be used in KSA:

Secondary cost element codes will be defined in Realization Phase.

4.3.1.5 Cost Element Group

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L2 – Communication & Promotion

L3 – Transport, Travel & Entertainment

L4 – Rental, Insurance & External Services

L5 – Administrative & Offices Expenses

L6 – Taxes & Other Costs