Revenue and Cost Controlling 

Definition

Revenue and Cost Controlling provides data that supports decision making in the organization. This data primarily comprises costs and revenues.

After preparing the appropriate master data and basic data, you plan and record the costs and revenues. You then determine the variances between the planned and actual costs or between the target and actual costs. Revenue and Cost Controlling processes also include reporting to support control tasks in response to variances.

Use

You can implement Revenue and Cost Controlling in accordance with your particular requirements in the R/3 System using all commonly used cost accounting methods.

Revenue and Cost Controlling is comprised of the following areas:

Overhead Cost Controlling

Overhead Cost Controlling is concerned with the planning, assignment, and control of overhead costs. This area is subdivided into Cost and Revenue Element Accounting, Cost Center Accounting, and Internal Activity Allocation. It is supplemented by overhead orders and overhead cost projects. Optional integration of Activity-Based Costing enables you to manage the costs of processes and assign them to downstream work areas.

Product Cost Controlling

The Product Cost Controlling component assigns the costs incurred in the organization to units of output (such as products or orders).

Product Cost Controlling includes the subcomponents Product Cost Planning, Cost Object Controlling, and Actual Costing/Material Ledger. These components can:

Profitability Analysis

Sales management using the Profitability Analysis application component provides all the information you need to manage your sales activities. Profitability Analysis is used to analyze market segments. It is structured according to products, customers, orders, and any combinations of these with regard to their profit margin or contribution margin.

The aim is to support the areas of Sales, Marketing, Product Management and Enterprise Planning with information for Controlling and decision making from a market perspective. The result is transferred to Profitability Analysis (CO-PA) using only cost-of-sales accounting.

Two types of profitability analysis are supported:

The two types of profitability analysis can also be used in parallel with each other.

For managing the profitability of internal organizational units, you should use Profit Center Accounting.

You can use any of the following R/3 components with Revenue and Cost Controlling in any combination:

SAP Component

 

Function

Overhead Cost Controlling

(CO-OM)

 

Plan, assign, control, and monitor overhead costs

 

Cost Element Accounting

(CO-OM-CEL)

Manage cost elements

 

Internal activity assignment

(CO-OM-ACT)

Manage and assign activity types

 

Cost Center Accounting

(CO-OM-CCA)

Create cost centers, plan and assign costs on cost centers, reporting

 

Overhead Orders and Overhead Projects (CO-OM-OPA)

Create overhead orders and accrual orders, plan and settle orders, reporting

 

Activity-Based Costing

(CO-OM-ABC)

Structure, plan, and assign processes

Product Cost Controlling (CO-PC)

 

Cost products; perform preliminary costing, simultaneous costing, and final costing

 

Product Cost Planning

(CO-PC-PCP)

Determine cost of goods manufactured and cost of goods sold for product units; analyze product costs

 

Cost Object Controlling

(CO-PC-OBJ)

Determination and monitoring of costs; assignment of costs to activity units

 

Actual Costing/Material Ledger

(CO-PC-ACT)

Material valuation

Profitability Analysis
(CO-PA)

 

Valuate sold products for sales controlling; transfer overhead costs and variances for profitability analysis

Profit Center Accounting (EC-PCA)

 

Calculate operating results for individual profit centers