Transfer Prices for Projects
Use
Depending on the complexity of the project and the structure of your business, the services in a project are rendered by different business areas - for example, by different profit center . With transfer prices, you can plan and monitor localized project responsibilities.
You enter planned transfer prices by means of transfer price agreement and actual transfer prices using transfer price allocations .
For more information on the use of transfer prices, see:
Integration
Transfer prices in projects are integrated with the general CO transfer price concept. The system reflects the transfer prices in the profit center valuation only.
See Parallel Flows/Transfer Prices and Parallel Flows in Controlling .
When using budgeting, you must split your project into different areas (called subprojects), each of which has responsibility for its own budget.
See Subprojects
Prerequisites
The system shows the transfer prices in the profit center valuation. For this to happen, you need to make the following settings in the costs section of Customizing for the
Project System
:
Under
Activate Project Management in Controlling
area, enter the currency and value profile with the valuation approach set at "Profit center valuation".Activate parallel valuation for the controlling area.
You must define a CO version where profit center valuation is carried out.
Note
Transfer prices are only included in the following functions if CO version 0 is managed in profit center valuation:
Budgeting:
Availability control
Planned allocations, such as planned overhead
Copying plan versions
Plan Integration
The system records transfer price agreements and allocations in the form of documents. You must define the relevant document type in Project System customizing. The document type controls:
Authorization
Number range interval
Retention period for archiving
Note
Use authorization object K_KFPP_DCT for the transfer price agreement and K_KFPI_DCT for the transfer price allocation.
Process Flow
Within the WBS, you have planned WBS elements and assigned them to different profit centers or subprojects. The WBS elements have a direct hierarchical relationship.
You agree a particular price between different profit centers/subprojects for a particular service. You record this agreement in a transfer price agreement between the relevant WBS elements.
See Creating Transfer Price Agreements
If changes occur as the project is processed - for example, if additional services are required or if the project schedule changes - you can change the transfer price agreement to reflect this.
The services are rendered, in whole or in part. You use the transfer price allocation to allocate the services rendered.
See Entering Transfer Price Allocations .
If you want to delete a transfer price agreement when you have already entered the transfer price allocation, you must first delete the transfer price allocation. Then you can delete the transfer price agreement.
If the agreed services have been rendered in full, complete work on them by flagging the various items in the transfer price agreement as complete.
You can use results analysis to display work in process (WIP) and cost of sales in the profit center valuation for the delivering cost element in the profit center valuation, and then settle them to Profitability Analysis.
You can archive documents when a certain retention period has elapsed. All the items in a document must be flagged as completed before you can archive the document. You can evaluate archived documents at any time in the information system.
Result
When the transfer prices are agreed, the system writes the planned costs and the commitment to the ordering WBS element (receiver) and the planned revenue to the delivering WBS element (supplier). In the transfer price allocation, the system records the actual values in the same manner.
You can use the project information system at any time to evaluate the planned costs and revenues, commitments, and actual values, all at the transfer prices, from the point of view of the profit center manager. You can only display the information for which you have authorization.