Cost Elements

 

Cost elements classify an organization's valued consumption of production factors within a controlling area. They provide information concerning the value flow and value consumption within the organization. A cost element corresponds to a cost-relevant item in the chart of accounts.

Note Note

Cost elements are represented in the system as a type of G/L account.

You maintain cost elements in the SAP Menu under Start of the navigation path Accounting Next navigation step Financial Accounting Next navigation step General Ledger Next navigation step Master Records Next navigation step G/L Accounts Next navigation step Individual Processing Next navigation step Centrally End of the navigation path (transaction FS00) or the corresponding Fiori app.

End of the note.
Primary Cost or Revenue Elements

Primary cost or revenue elements are G/L accounts of the G/L account type Primary Costs or Revenue. Primary cost elements reflect operating expenses such as payroll, selling expenses, or administration costs.

Examples of primary cost elements:

  • Material costs

  • Personnel costs

  • Energy costs

Secondary Cost Elements

Secondary cost elements are G/L accounts of the G/L account type Secondary Costs. Secondary cost elements represent costs resulting from value flows within the organization, such as internal activity cost allocations, overhead allocations, and settlement transactions.

Examples of secondary cost elements:

  • Overhead allocation

  • Internal activity allocation

  • Order settlement

Cost Element Master Data

Cost element master data includes the following settings:

  • Cost Element Category

    Cost element categories determine the transactions with which you can use the cost element, such as internal settlement or allocations.

    For more information, see Cost Element Categories.

  • Record Quantity

    This checkbox defines whether a message is issued in case no quantity or quantity unit is specified for commitments or actual postings. The checkbox has no effect on quantity updates.

  • Internal Unit of Measurement

    This indicator determines which unit of measurement is recorded.

Cost Element Groups

You can create hierarchical groups of cost elements with similar characteristics.

For more information, see Cost Element Groups.

Integration

Cost Element Accounting and Cost Center Accounting/Internal Orders are closely linked. Each posting to a cost element is assigned to either a cost center or an order. This ensures that the data is broken down into cost elements and cost centers/internal orders for analysis purposes.