SAP- Enterprise Controlling (EC)

EC-CS Enterprise controlling – Consolidations: The module where consolidations and elimination occur for both a legal entity (Company Code) and a management area (Profit Center). Consolidation gives you a reconciled view of your groups financial data and lets you create the reports required by corporate law (by group, company or business areas) as well as reports which reflect your company’s internal management structure (by profit center or region). This is possible due to powerful consolidation functions built on top of flexible structures. The raw data can be transferred via interfaces with FI-GL (General Ledger), FI-AA (asset accounting), MM (Materials Management, SD (Sales and Distribution) and EC-PCA. You can also analyze the results of the consolidation immediately in EC-EIS. DATA TYPES – i.e. CS Breakdown categories

• Company & Trading Partner controlled by FI are required to generate eliminations. Note: FI-GL/AR/AP line items always have Company in Document Header. Trading partner is in document line item where relevant

• Profit Centers & Partner Profit Centers controlled by PCA are needed to generate eliminations for Management Consolidation by line of business

• Consolidation Units and Partner Units controlled by CS are used to generate eliminations for various consolidations. Transaction data from CS-PCA updates Consolidation units and if appropriate stores the data by partner Unit.

• Transaction types controlled by FI are used for reporting of consolidated balance sheet flows in CS. Transaction Types are used by the Fixed Asset module to distinguish between beginning balance, additions, transfers, disposals and ending balances. Separate types are usefull to distinguish movements in equity holdings for financial investments.

• Functional Areas controlled by CO are used for reporting consolidated P&L Statements. Functional Areas combine accounts but distinguish balances by function (e.g. selling expenses, research & development costs etc.)
o FI-AA Assets Module is the primary user of Transaction Types. Transactions made in FI-AA are stored with a Transaction Type which identifies whether it is an addition or disposal, etc. These Asset Transaction Types can be mapped into consolidation transaction types.
o Data passing from PCA to CS populates a single field with either a Transaction type for selected Balance Sheet accounts or a Functional Area for selected P&L accounts.
o Transaction types and Functional Areas are for Reporting.

EC-PCA Profit Center Accounting – Profit center accounting forms an interface between the operative controlling (CO) applications and the Enterprise Controlling (EC) module It reflects the actual and plan postings from operative controlling and settlements components with which it is in targeted in real-time. It then summarizes this data according to profit centers, which reflect the internal structure of areas of responsibility within the company code

• Each profit center is assigned to one controlling area

• Reason for Profit Centers
1. to analyze areas of responsibility
2. to delegate responsibility to different decentralized units

• Profit Centers can be set up
1. Product (product lines, divisions)
2. Geographical factors (regions, sites)
3. Function (production, sales)

• Profit Centers are organized into an organizational hierarchy in which responsibility and incentive structures can be defined. Profit Center Hierarchy:
o Node one
(a) Profit Center one
o Node two
• Profit Center two
(a). Revenue
(b). Costs

• Profit Center three

• Planning can be done on a PCA

• In EC-PCA, the profit center is the lowest level at which you measure financial results

• Since CS-PCA is only complete at the end of the month, CS-PCA data in only rolled up to CS via FI-SL (Special Ledger) monthly.

Accounting Data Flows:
1. Real time data flows
2. Periodic data flows

EC-CS – Enterprise Controlling Consolidations
• Manual Entries
• EC-PCA – Enterprise Controlling Profit center accounting
o FI Balance Sheet Items
(1). SD, MM, PP, FI Journal Entries

FI Period End Update – Balance Sheet Sub Ledgers - SD, MM, PP, FI Journal Entries
CO-OH
o FI P&L - SD, MM, PP, FI Journal Entries CO - Allocations CO-PA
o FI P&L External Revenue and Cost of Sales - SD, MM, PP, FI Journal Entries

Module Functions:
Control – The module that manages cost reporting, analysis and control. This is the primary area for managing and evaluating financial performance.

CO-PA:
Profitability Analysis. That part of CO where operations will access its performance factors and profitability statements contain margins, standard cost variance, sales information, allocations and other related profit or loss data. This module helps analyze profitability of customers, markets and products at various levels of contribution margins. Profitability is measured down to the SD billing document line and is adjusted periodically against standard costs and other costs.

• Profitability analysis, like profit center accounting is another form of profitability accounting. However, it is incorporated in operative cost accounting, i.e. the profitability segments in CO-PA are accounting assignment objects and are thus directly integrated in the flow of data in cost accounting.

• In contrast to EC-PCA, where profits are found for areas of responsibility within the company, CO-PA lets you analyze the profitability of different segments of your operative business as defined according to products, customers, orders or any combinations of groups of these or as organizational units, such as company codes or business areas. The aim of CO-PA is to provide decision makers with information about the market.

• Master data and basic structures in CO-PA can be defined with sufficient flexibility to meet company specific requirements. This is done by choosing the objects for evaluation (characteristics) and key figures to create a company-specific multidimensional structure for analysis.

• Unlike EC-PCA, CO-PA lets you use an account-based or a costing based approach. In the costing based approach, define value fields for analysis. In account based the values are represented in accounts.

• EC-PCA and CO-PA should not be regarded as alternative components. They complement one another and jointly provide a flexible and comprehensive profitability accounting tool, allowing you both a market oriented view and a responsibility view.

• Data Source
1. Revenue Accounts
2. Expense Accounts
3. Allocation of Operating Expense (only across profit center)
4. Stock Transfers Across PCA
5. A/R Sub ledger (Month End Batch Job)
6. A/P Sub ledger (Month End Batch Job)
7. Other Balance Sheet Accounts

• Data Flows

CO-CCA:
Cost Center Accounting determines where costs are incurred in the organization. Assigned to the sub area where they have the most influence.
• By creating and assigning cost elements to cost centers, you make cost controlling possible, but also provide data for other components in CO such as Cost Object Controlling. Cost centers can use allocation methods to assign collect costs to other controlling objects.
• Cost center structure can reflect the structure of the organization. It generally remains constant over time.
• Cost Centers
CO-OPA:
- Internal Orders
CO-PC:
- Product Costing
CO-OH:
- Overhead