Define Adjustment Accounts for Reconciliation Posting

IMG⇒ Controlling⇒ Cost Element Accounting⇒Reconciliation Ledger⇒Define Adjustment Accounts for Reconciliation Posting

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Double click on “Create Adjustment Account

This takes you to FS00 Screen, Here we need to create “Recon Adjust A/c
Under “Current Assets

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Then Click on “SAVE

Come back and select as below,

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Double Click on “Maintain Clearing Accounts for Business Area/ Functional Area

T-Code:OBXN

Chart of A/c’s: Select Chart of A/c

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  • A/c: Assign “Recon Adjustment A/c” from the dropdown box
  • Click on “Save

Define Adjustment Accounts for Reconciliation Posting:

If, in cost accounting, values cross company code, business area, and/or functional area boundaries, inconsistencies occur in Financial Accounting (FI). These occur in particular when costs are capitalized. You can use reconciliation postings to balance out these differences in FI.

For secondary CO postings, FI creates clearing entries in special accounts which you must create as adjustment accounts.

You can also make clearing entries for primary postings. The system carries these out for the adjustment account given in account determination, not to the expense account in FI.

In this IMG activity, you can choose from the following to set adjustment accounts:

  • Assignment based on business transactions or object classes
  • Extended account determination using substitution

Account Determination Without Substitution (Standard)

Depending on the differentiation of clearing entries in FI, you create as many adjustment accounts as required and assign them to business transactions or object classes.

When assigning accounts, you can:

  • Enter an account for all reconciliation postings
  • Enter an account for each business transaction
  • Enter an account for each object class
  • Enter an account for each business transaction and for each object class

Thanks

Jayanth Maydipalle

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Reconciliation Ledger

IMG⇒ Controlling⇒ Cost Element Accounting⇒Reconciliation LedgerActivate/Deactivate Reconciliation Ledger

Double Click on “Activate Reconciliation Ledger”

T-Code: KALA

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  • Controlling Area: Select “Controlling Area“from the Popup
  • Click on “Execute

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Press “Enter”

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For “Deactivate Reconciliation Ledger”  Use T-Code: “KALB”

 

Reconciliation Ledger:

A ledger used for summarized display of values that appear in more detailed form in the transaction data.

The reconciliation ledger has the following functions:

  • Reconciles Controlling with Financial Accounting
    • The reconciliation ledger provides reports for monitoring the reconciliation of Controlling with Financial Accounting by account.
    • It can identify and display value flows in Controlling across company code, functional area, or business area boundaries.
    • Value flows can be used in Financial Accounting as a basis for summarized reconciliation postings. Reconciliation postings replicate the value flows in Controlling that affect an organization’s legal financial statements (such as the balances and the profit and loss statement). Users can enter reconciliation postings based on the values identified by the reports, or the SAP System can make automatic reconciliation postings.
  • Provides an overview of all costs incurred
    • Reconciliation ledger reports provide an overview of the costs and are therefore a useful starting point for cost analysis. For example, an item in the profit and loss statement from the Financial Information System (FIS) can be examined in the reconciliation ledger reports with respect to the relevant costs. For more detailed analysis, reports from other components within Controlling can be accessed from the reconciliation ledger reports.

Activate/Deactivate Reconciliation Ledger

In the reconciliation ledger, the data from Accounting is summarized and valuated. Cost flows over company code and business area boundaries, as well as those occurring exclusively in Controlling (secondary postings) not noted in Financial Accounting, can be passed on further in this manner. Reconciliation between internal and external accounting is thereby secured.

You do not need the reconciliation ledger in the following situations:

  • no profit and loss accounting using cost of sales accounting occurs
  • there is no interest in cross-application reports
  • there is no interest in evaluating cross-company-code and cross- business area postings

Before CO postings can be updated online in the reconciliation ledger, the ledger must be activated.

CO postings are updated online from the time of activation in the reconciliation ledger. No automatic repostings are made for previous periods. If you want to take all periods in the fiscal year into account, you must make separate re postings manually for the periods before the reconciliation ledger was activated.

Example

If you activate the reconciliation ledger for your controlling area in period 3, the values for periods 1 and 2 are missing. Reconciliation with FI in some cases will not be completely processed (if cross-company-code or cross-business-area postings were made in periods 1 and 2). You therefore must repost manually to the reconciliation ledger.

Note

Controlling area maintenance indicates whether the reconciliation ledger is activated or deactivated for the controlling area.

Recommendation

Activate the reconciliation ledger at the start of a new posting period. This ensures that the complete data from this period is available in the ledger.

Activities

    1. Activate the reconciliation ledger in your controlling area at the start of a new posting period.
    2. If necessary, repost for previous periods in your controlling area.

               Reconciliation ledger -> Repost

Note on transport

The indicator Reconciliation Ledger active is transported with the controlling

 

Thanks

Jayanth Maydipalle

Secondary Cost Element

IMG⇒ Controlling⇒ Cost Element Accounting⇒Master Data⇒Cost Elements⇒Create Cost Elements

T-Code:KA06

Double click on “Create Secondary Cost elements

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  • Give any G/L Number
  • Specify the Fiscal Year Period
  • Click on “Master Data

The below screen appears,

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  • Write name of the Secondary Cost element & Description as shown above
  • CElem category : Overhead Rates(41)
  • Click on “Save

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Thanks

Jayanth Maydipalle

Primary Cost Element

IMG⇒ Controlling⇒ Cost Element Accounting⇒Master Data⇒Cost Elements⇒Create Cost Elements

T-Code: KA01

Double Click on “Create Primary Cost Elements

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  • Controlling Area: Select “Company Code
  • Press “Enter”

Goto- /NFS00

Select Any Indirect expense A/c, Click on “Change”

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  • Click on “Edit Cost Element“, Click “Yes” Popup

The following screen appears,

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  • Valid From: Fiscal year (1.04.2012 to 30.03.2013)
  • Click on “Master Data

Bellow screen appears,

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  • CElem Category : Select “Primary Costs“(1)
  • Click on “Save

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Thankz

Jayanth Maydipalle

Cost Element Accounting

Cost Elements are “Overheads”

They are:

  • Primary Cost Elements
  • Secondary Cost Elements

Primary Cost elements are Direct & Indirect Overheads which are part of Finance. Secondary Cost elements are dependent  of primary cost element, which are part of controlling. Planning will be done for secondary cost elements to which actual amount is released through finance, using primary cost element while posting the actual entry secondary cost elements are not directly posted to as it is part of controlling to integrate finance & controlling there should be cost centers like Production, Admin, Sales, Research Etc, these cost centers will have profit center with which company will analyse profit of each & every cost center while generating reports we can view,

Debit Entry of Finance &

Credit entry of Controlling

Primary Cost Elements bring the data (financial postings) into SAP. As shown below, the Primary Cost Elements carry the values from FI into different modules depending on the category or classification assigned to the G/L account.

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It is important to note that cost elements with a category of “01” are considered an expense and post to a cost center. The value will also appear in PCA because each cost center is tied to a profit center. PCA receives the posting because of that relationship and not directly from the cost element.

Secondary Cost Elements move data around within CO and have NO impact on the General ledger. An example of this would be the allocation of electricity.

  •  In this example, the bills are received from the electric company that services the corporate offices of company 3000. The AP department posts a financial transaction that debits Utility Expense for Cost center 2100, which is used as a holding place for HQ expenses.
  • at the end of the month the value in cost center 2100 is allocated to the departmental cost centers based upon square footage using Secondary Cost Element 990000.

The result is that the costs posted to the budgets now reflect an overhead cost.

 

Display Actual Cost Documents:

Accounting⇒ Controlling ⇒ Cost Element Accounting  Information System  ⇒Reports for Cost and Revenue Element Accounting ⇒ Document Display  ⇒Controlling Documents: Actual Costs

T-Code:KSB5

Automatic Creation of Primary and Secondary Cost Elements

Part of SAP Controlling module is Cost Element Accounting. It is under this area where you maintain directly master data of cost elements. Just to refresh your mind about cost element.

There are two types of cost elements in Controlling, namely; primary and secondary cost element. Primary cost elements are use to transfer P&L account postings in Financial (FI) to Controlling (CO). It is a requirement that all P&L accounts should have a primary cost elements; otherwise, transactions can not be posted involving P&L accounts in FI. On the other hand, secondary cost elements are use only for allocation and assessment purposes as period-end process.

Some might have created already a cost element. The question now is, how did you create the cost element? You could have created manually for each P&L Account. My dear readers, it’s really a tedious activity to create cost element manually.

Now here is the tip. You can create primary cost elements automatically for all P&L accounts. You just follow this procedure:

1. First, set-up the settings in your Chart of Accounts. Follow this configuration path:

IMG Financial Accounting (New) General Ledger Accounting (New) → Master Data → G/L Accounts → Preparations → Edit Chart of Accounts List.

Transaction Code: OB13

The “Change View List of All Chart of Accounts: Details ” screen appears.

Automatic Creation

Set the Controlling Integration to “2 Automatic creation of cost elements” (see highlighted item), and save your work.

2. Second step, Specify the default cost elements that will be automatically created. Follow this configuration path:

IMG Controlling → Cost Element Accounting → Master Data → Cost Elements → Automatic Creation of Primary and Secondary Cost Elements → Make Default Settings.

Transaction Code: OKB2

3. Third step, Create Batch Input Session for the automatic creation of cost elements. Follow this configuration path:

IMG Controlling → Cost Element Accounting → Master Data → Cost Elements → Automatic Creation of Primary and Secondary Cost Elements → Create Batch Input Session.

Transaction Code: OKB3

4. Fourth step, Execute Batch Input Session.

Transaction Code: SM35

Result: The cost elements specified in step 2 will be automatically created.