1. The Associated Cement Companies Limited
CO01- Cost Center & Profit Center Accounting
Thane, 26 JUL 2006

2. Agenda Purpose of Cost Center and Profit Center Accounting
Master Data in CO module and its purpose
Cost Planning
Actual-Postings
CO Module

3. Purpose Cost Center Accounting Profit Center Accounting
Used for Controlling purposes within an organization
Tracks where costs occur in an organization
Useful in the analysis of the overhead costs
Profit Center Accounting
Allows to calculate internal measurements of profitability
Provide an organization the opportunity to analyze and report internal profitability for its organization
CO Module

4. The Associated Cement Companies Limited
Master Data
Thane, 26 JUL 2006

5. Master Data Cost Center Standard Hierarchy
Cost Center and Cost Center Group
Profit Center Standard Hierarchy
Profit Center and Profit Center Group
Cost Element and Cost Element Group
Account Group
Statistical Key Figure
CO Module

6. Master Data Internal Order Activity Type Account Group Cost Center
Profit
Center
Group
Cost
Center
Group
Profit
Center
Cost
Element
Cost
Element
Group
Statistical
Key
Figure
CO Module

7. What is a Standard Hierarchy?
Tree structure representing all cost centers belonging to a controlling area from a Controlling perspective.
CO Module

8. Cost Center Standard Hierarchy Coding Structure
Level 0
Level 1
Level 2
Level 3
Level 4
Level 5
Highest Level
Segment Level
Sub-segment Level
Function
Sub-function
Group of Cost center
IN01 1a
2ab
3abc
4abcd
HAC code
CO Module

9. Cost Center Standard Hierarchy
CO Module

10. What is a Cost Center?
Organizational unit within a controlling area that represents a clearly delimited location where costs occur
Cost centers are grouped together into decision, control, and responsibility units - organizational divisions on the basis of functional, settlement-related, activity-related, spatial, and/or responsibility-related standpoints.
CO Module

11. Cost Center Coding Structure
Alpha numeric seven-digit code
First five digit should be based on HAC 3 5 1 2 4 6 7 X X X X X
Function for
Cost center
Group
Plant/
Business Area
Sequential #
HAC Code
CO Module

12. Cost Center Coding Structure …
Production
Main Cost Center
1xxxxxx : Raw material Extraction
2xxxxxx : Raw material Preparation
3xxxxxx : Raw meal Preparation
4xxxxxx : Clinker Production
5xxxxxx : Cement Grinding
ดู sheet Cost center description ตาม ซึ่งในด้านของส่วน Production แบ่งกลุ่มของ cost center เป็น 3 ประเภท ดังนี้
1. Main cost center เป็น cost center ในส่วนที่เกี่ยวข้องกับการผลิตโดยตรง โดยที่ค่าใช้จ่าย/ต้นทุน (Cost) ที่เกิดขึ้น จากขั้นตอนการจากกระบวนการผลิตจากจุดเริ่มต้นจนถึงจุดสิ้นสุดที่ให้ Product ในแต่ละขั้นตอนมา โดยที่อุปกรณ์และเครื่องจักรที่ใช้ในการลำเลียงและ feeding เข้าสู่ Storage ของตัวเองเป็นของ Cost center นั้นๆ ในส่วนที่เกี่ยวข้องกับการ reclaiming and extracting จาก storage เป็นของ cost center ถัดไป ซึ่งเราแบ่ง Main cost center ออกเป็น 5 Cost center
CO Module

13. Cost Center Coding Structure …
Production
Auxiliary Cost Center
Bxxxxxx : Plant infrastructure
Cxxxxxx : Plant management
Dxxxxxx : General plant service
Gxxxxxx : Plant maintenance & workshop
Hxxxxxx : Quality control & laboratory
CO Module

14. Cost Center Coding Structure…
Production
Pre-Process Cost Center
Lxxxxxx : Fuel preparation
Kxxxxxx : Additive material preparation &
handling
Exxxxxx : Power generation
CO Module

15. Cost Center Coding Structure…
Non-Production
6xxxxxx : Shipping station &Warehouse
7xxxxxx : Distribution
8xxxxxx : Marketing & Sales
9xxxxxx: Administration
CO Module

16. Cost Center Group To produce reports for several cost centers
You can create any amount of cost center groups independent from the standard hierarchy.
Standard cost center groups were automatic created from cost center standard hierarchy.
Creation standard cost center group by reference to HAC (Holcim Asset Code)
A cost center group can be used for many purpose; for example:
To produce reports for several cost centers
To process several cost centers in one business transaction
To allocate cost from one group to another group
CO Module

17. What are Accounts and Cost Elements?
Cost element classifies an organization’s valuated consumption of production factors within a controlling area
A cost element corresponds to a cost-relevant item in the chart of accounts
Account
Structure which records value transactions within an accounting unit as regards an element from a value grouping
CO Module

18. Cost Elements Primary Secondary Company Company
The expenses that come from outside of the company
and are visible in the financial books
(e.g., Salary, electricity, etc.).
Secondary
Company
Company
The expenses that determined using inside the company and
they can be assigned to cost center (e.g. Admin.expenses, etc.).
They aren’t visible in FI in the financial books.
CO Module

19. Account Code VS.Cost element
Balance Sheet Account
Primary cost element
Profit and loss Account
Secondary cost element
CO Module

20. Primary VS. Secondary Cost element
Create G/L
account in FI
Create
C.E. in CO
Create
C.E. in CO
Post to G/L
account in FI
Update C.E.
in CO
Post to C.E.
in CO
CO Module

21. Primary Cost Element Categories
In APAC we use 3 types (Categories) of Primary cost element
Number range Cost element categories
– for Revenue
– for COGS
– for Expense
– for AUC acquisition cost
CO Module

22. Secondary Cost Element Categories
In APAC we use 3 types (Categories) of Secondary cost element
Number range Cost element categories
– for Assessment
– for Internal Activity Allocation
– for Internal settlement
– for Assessment to CO-PA
CO Module

23. Secondary Cost Element Structure
Number range
Usage
– (42) Allocate pre-process/auxiliary cost to main
cost centers
– (43) Allocate cost from cost center to Process order or PM order using activity type
– (21)Settlement cost from PM order to cost center
– (42) Allocate cost from cost center to CO-PA
CO Module

24. Cost Element Groups NA0001 Raw Material
Cost Element Groups are used in allocations planning and formatting reports.
CO Module

25. Cost accounting manufacturing cement
Inventories
Infrastructure
and mainte-
nance
Plant management
General plant services
Power and control network
Parts and supplies management
Plant maintenance and workshops
Quality control and laboratory
Mobile equipment maintenance
garage
Water supply/ treatment/ distribution
Sewage treatment (plant)
Solid waste
Railway traffic infra-structure (at plant)
Products
Auxiliary cost centres
Bag
Alternative raw
material preparation
Power generation
Preparation of correctives
Traditional fuels preparation
Alternative fuels preparation
Preparation of additives (including e.g. slag grinding)
Volume reference tons
Pre-process cost centres
Allocation to all receiving cost centres
70 % to clinker production
30% to cement grinding
Bulk
purchased
Raw material extraction
Raw material preparation
Raw meal
preparation
Clinker production
Cement grinding
Cement
Main cost centres
Raw material
produced
Volume reference kWh/t
Clinker produced
Volume reference tons
Volume reference tons
Raw material
purchased
Clinker purchased
Clinker
CO Module

26. What is a Statistical Key Figure?
Statistical key figures define some measurable value applicable to cost centers, profit centers, internal orders, or processes
Use as an allocation base
Such as
Power Consumption
Factor (such as clinker factor, etc.)
CO Module

27. Statistical Key Figure Structure
SKF
Name
SKF UoM
NSK0001
Electricity Produce
KWH
NSK0002
Drilling bit EA
NSK0003
Operation time H
NSK0004
Number of trips
TRP
NSK0005
Power consumption
NSK0006
Tonnage TO
NSK0007
Monthly factor
FAC
NSK0008
Yearly factor
CO Module

28. Exercise 1: CC Std Hier./Cost Center
Display Cost center standard hierarchy by menu path.
Display Cost center standard hierarchy by use T-code.
Display Cost center code by menu path.
Display Cost center code by use T-code.
Refer to BPP …..
CO Module

29. Exercise 1: Cost Center/Cost Center Group
Change Cost center code by menu path.
Change Cost center code by use T-code.
Change Cost center group by menu path.
Change Cost center group by use T-code.
Refer to BPP …..
CO Module

30. Exercise 1: Cost Element/Cost Element Group
Display Cost element by menu path.
Display Cost element by use T-code.
Display Cost element group by menu path.
Display Cost element group by use T-code.
Refer to BPP …..
CO Module

31. Exercise 1: Statistical Key Figures
Display Statistical Key Figures by menu path.
Display Statistical Key Figures by use T-code.
Refer to BPP …..
CO Module

32. Profit Center Standard Hierarchy
CO Module

33. Dependencies New Product Profit Center Standard Hierarchy
Material Master
Profit Center
Profit Center Group
CO Module

34. Dependencies Cost center Group New Cost center Cost Center
Profit Center
Standard Hierarchy
Cost Center
Standard Hierarchy
Profit Center
Cost center
Cost center Group
CO Module

35. Dependencies New Account GL Account Primary Cost Element
Cost Element Group
CO Module

36. Dependencies PC Standard Hierarchy CC Standard Hierarchy GL Account
Primary
Cost Element
Secondary
Cost Element
Material
Master
Profit Center
Cost center
Profit Center Group
Cost center Group
Cost Element Group
Allocation
Default Cost center
Validation
CO Module

37. Profit Centers Integration
Cost Center
GL, AP, AM, MM, AR
Post cost/expense
Record
Profit Center SD
Post revenue
The smallest area of responsibility within a company’s overall organizational structure
CO Module

38. Exercise 2: Profit Center Std Hier./Profit Center
Display Profit center standard hierarchy by menu path.
Display Profit center standard hierarchy by use T-code.
Display Profit center code by menu path.
Display Profit center code by use T-code.
Refer to BPP …..
CO Module

39. Exercise 2: Profit Center Group/Account Group
Display Profit center group by menu path.
Display Profit center group by use T-code.
Display Account group by menu path.
Display Account group by use T-code.
Refer to BPP …..
CO Module

40. The Associated Cement Companies Limited
Planning
Thane, 26 JUL 2006

41. Cost Planning Objectives
To plan the structure of the organization’s future operations for a clearly defined time period.
To control the business methods within the current settlement period
To monitor efficiency after completion of the settlement period using plan/actual or target/actual comparisons
To provide a basis for the valuation of organizational activities, independent of random fluctuations
CO Module

42. Cost Center Planning
Cost center planning consists of the following areas:
Planning of costs expected to be incurred
Cost Element Planning
Planning of activity quantities and/or prices
Activity Price Planning
Planning statistical key figures, which are used as the basis for the allocation of costs
Statistical Key Figure planning
CO Module

43. Organization of Planning
Planning Areas
Planning Layouts
Planning Profiles
Planning Versions
CO Module

44. Planning Version Plan version Version 0 Version1-12 Plan Data
CO Module

45. Planning... Accounts Planning in Profit Center Accounting
1xxxxxxx Revenue
2xxxxxxx Expense
3xxxxxxx Asset
4xxxxxxx Liabilities
5xxxxxxx Shareholders
Planning in
Profit Center Accounting
Cost Center Accounting
General Ledger
CO Module

46. CCA Planning PCA Planning
Planning in SAP
CCA Planning
Other
Cost elements
PCA Planning
Revenue and
Related accounts
CO Module

47. GL PCA CCA Asset Liabilities Revenue Revenue Expense Expense Expense
Planning Integration GL
Asset
Liabilities
Revenue
PCA
Revenue
Expense
CCA
Expense
Expense
CO Module

48. Planning Function in CCA
Enter Planning Data
Copy Actual Data to Plan version
Copy Plan Data from plan version to another plan version
Reporting
CO Module

49. The Associated Cement Companies Limited
Actual Postings
Thane, 26 JUL 2006

50. Actual Postings Reposting line item Reposting cost
Enter Statistical key figures
CO Module

51. Reposting
Reposting is the feature of CO to correct the FI posting (incl. AR/AP/GL documents)
Reposting is not a reverse-type transaction.
Allow to change Cost object assigned
Allow to change the portion b/w CCs (split)
Repost Line item (not recommended):
Used to transfer the cost from a cost object which is wrongly made at primary system to another cost object in CO
The change only effects CO report, not change in original FI document
Require a specific FI document for this function
Reference is Costing document
CO Module

52. Reposting
Repost Cost
To make correction by posting the cost from one cost center to other cost center(s) or order(s)
No requirement for document
Free amount to cut/ paste
CO Module

53. Exercise 3: Reposting/Enter actual SKF
Reposting cost by menu path.
Reposting cost by use T-code.
Posting actual SKF by menu path.
Posting actual SKF by use T-code.
Refer to BPP …..
CO Module

54. Know the way, show the way, go the way
We…
Know the way, show the way, go the way
CO Module