Settling Costs to Cost Centers or Assets in SAP FICO

In SAP FICO, settling costs to cost centers or assets helps ensure that costs are properly allocated and accounted for. This article provides a step-by-step guide on how to settle costs from internal orders, WBS elements, or other sources to cost centers or assets, with examples to illustrate each step.

Step 1: Define Settlement Profile

The settlement profile defines how costs are settled and which objects will be used. To define a settlement profile:

  • Go to transaction code OKO6.
  • Create a new settlement profile or modify an existing one.
  • Specify the Settlement Method (e.g., Percentage Allocation, Periodic Allocation). Choose the method that fits your needs.
  • Define the Settlement Receiver (e.g., cost centers, internal orders, assets).
  • Set the Allocation Rules (e.g., direct or based on a predefined key).

Example: A new settlement profile "ZSET" is created with the settlement method "Periodic Allocation" and receiver "Cost Center" for the settlement of overhead costs.

Step 2: Assign Settlement Profile to the Internal Order

Once the settlement profile is defined, assign it to the internal order or cost object:

  • Use transaction code KO02 to edit an internal order.
  • In the Settlement tab, enter the Settlement Profile (e.g., ZSET).
  • Choose the Settlement Receiver (e.g., a cost center or asset).

Example: Internal order "100001" is assigned settlement profile "ZSET" with receiver "Cost Center 1000" for settling costs of the marketing campaign.

Step 3: Execute Settlement Run

To settle the costs, you need to execute the settlement run:

  • Use transaction code KO88 to execute the settlement.
  • Select the internal order, WBS element, or other source from which costs are to be settled.
  • Choose the Period for the settlement (e.g., "Month 12" for the fiscal year-end).
  • Click on Execute to start the settlement run.

Example: In the settlement run for internal order "100001", 20,000 of costs are settled to "Cost Center 1000" for marketing activities in December.

Step 4: Review the Settlement Results

Once the settlement is complete, you should review the results to ensure that the costs were correctly allocated:

  • Use transaction code S_ALR_87012993 to view the details of settled costs.
  • Check that the correct amounts are posted to the receiving cost centers or assets.
  • Verify that the settlement was carried out according to the defined rules and methods.

Example: A report shows that 20,000 has been successfully settled to "Cost Center 1000" and no errors were encountered in the settlement process.

Step 5: Settle Costs to Assets (Optional)

If you need to settle costs to assets, use the following steps:

  • Navigate to transaction code ABZON to settle costs to asset accounting.
  • Select the asset number and enter the settlement amount (e.g., the cost of purchasing equipment).
  • Specify the Asset Transaction Type (e.g., Acquisition).

Example: The costs for purchasing machinery are settled to asset "100001" with a settlement of 50,000 using the acquisition transaction type.

Step 6: Post-Settlement Activities

After completing the settlement, perform any necessary post-settlement activities:

  • Review the Cost Center or Asset postings to confirm that the costs have been transferred correctly.
  • Adjust any discrepancies or errors by rerunning the settlement with corrections, if needed.
  • Monitor the impact on financial statements and reports.

Example: After settling the costs to the cost center "1000," the total cost is now reflected in the monthly financial report.

Step 7: Close the Internal Order (Optional)

Once the settlement process is complete, you may wish to close the internal order:

  • Use transaction code KO02 to change the internal order status to Closed.
  • Ensure all costs have been settled and no further postings are necessary.

Example: After settling all costs for order "100001," the status is changed to closed, and no further activity will be allowed.

Conclusion

Settling costs to cost centers or assets in SAP FICO is essential for maintaining accurate cost allocations and financial reporting. By following these steps, you can ensure that costs are settled appropriately and that financial data is aligned with your organization's accounting practices.




Advertisement