Over the last seven weeks expert Tom King has shared detailed information on SAP activity types . This blog post provides a recap and link to each post in the series.
Tip 100 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:
You can reference SAP Note 552486 for answers to frequently asked questions about Product Cost Controlling (CO-PC). Process orders provide you with extra functionality, such as phases and process instructions for process industries.
The Online Service System (OSS) contains a database of useful information and advice on fixes for SAP system issues, consulting notes, and frequently asked questions. OSS Note 552486 contains advice on 14 SAP Controlling frequently asked questions. In this tip, we'll discuss how to access OSS Note 552486 adn we'll go over the note's first couple of questions and answers.
The material price determination indicates how the valuation of a material should occur after each business transaction for a material relevant for valuation. If SAP Material Ledger is active, this field has to be set up in the material master using an appropriate combination of price control and material price determination. If SAP Material Ledger is activated for a valuation area, the accounting 1 view looks slightly different than the regular screen without a material ledger. Additional fields become available when using SAP Material Ledger or split valuation.
We come to the end of our tour of activity type posting with category 5 (Target=actual allocation). This one is the low-fat frozen yogurt of activity types. It tastes great, but you don’t have to work as hard to keep a trim figure. This works similarly to the category 2 activity type, but does not require an indirect activity allocation cycle in order to post the activity.
Instead, all that is required is that you run transaction KNMA in order to make the postings.
“How can this be?”, you might ask. KNMA looks at the amount of receiver activity that is posted and then determines from the planned allocation how much of the allocated activity should be posted. It’s as simple as that. I am going to show you two different examples of how this works. First, let’s look at activity that is planned using a fixed allocation quantity.
In our category 2 examples, the planned activity allocation was planned as variable. That means that the quantity of activity to post was based on some receiver factor associated with an actual posting. For fixed allocations, the total planned quantity of activity should be posted regardless of how much of the receiver is posted. Let’s see how this works. The receiver activity MACHHR is planned in three cost centers (RCV5A, RCV5B, and RCV5C), and the price of the activity type in each of those cost centers is made up of both costs that are directly assigned in the manufacturing cost center as well as indirect support costs that must be allocated from other support cost centers. The indirect support costs are allocated in planning from cost center SND5A, activity type CATEG5. The planned MACHHR activity and the CATEG5 activity allocated for the three cost centers are as follows:
• RCV5A: MACHHR – 8,000 HR and 50,000 units of CATEG5 allocated – fixed
• RCV5B: MACHHR – 16,000 HR and 30,000 units of CATEG5 allocated – fixed
• RCV5C: MACHHR – 24,000 HR and 40,000 units of CATEG5 allocated – fixed
KP06 layout 1-102 is used for the manual activity allocation plan. In this case, we see that the allocation is planned as fixed rather than variable.
This is done for all three of the receiving cost centers, and a total of 120,000 units of CATEG5 have been allocated from cost center SND5A.
Let’s look at the plan for cost center SND5A. Note that because we intend to do a fixed allocation, we have decided to plan the costs as fixed rather than variable. This does not appear to be a requirement, but because the actual allocation will end up being the same as the planned activity, it makes sense for the costs to be fixed as well.
When running KSPI to generate the costs, the activity price will be 100% fixed.
During period 4 (April), 500 hours of MACHHR was posted in RCV5A, 700 in RCV5B, and 1,200 in RCV5C. Prior to running KNMA, the Cost Center Target/Actual/Variance report shows this for the four cost centers: SND5A,
The targets for the allocations for each of the receiver cost centers are not based on the amount of the MACHHR activity posted, but instead are based on the amount of planned MACHHR activity. This is because the allocation is fixed instead of variable.
Next, we will run KNMA to post the CATEG5 activity in SND5A.
As a part of running KNMA, the operating rate is calculated. The operating rate determines how much activity will be posted in the sending cost center. Because this is a completely fixed allocation, the operating rate should be 100%, meaning that all the planned activity will be posted.
In case you are wondering about the operating rate for MACHHR in the three receiving cost centers, that is not calculated during the KNMA run, but instead is determined from the actual activity posting divided by the planned amount. This is because MACCHR is a category 1 activity type.
The resulting Cost Center Actual/Target/Variance report now shows the result of the CATEG5 activity postings and allocation. First, SND5A shows that the full amount of activity was allocated out.
It did not matter how much of the receiving activity was posted because this was a fixed allocation. The receiver cost centers show the result of the allocation. First RCV5A.
And that is all there is to posting category 5 activities. This is the simplest type of automated posting and can be a very powerful tool.
I have one more example to go over, and then we will be done with the activity type tour. If you remember from the blog posts of the category 2 activity types, I indicated we would be revisiting one of the examples. I included an example where the MACHHR activity posting was the receiver tracing factor, and we calculated the weighting factors for the sender activity using the planned allocation quantities. Well, guess what! We could have done the exact same thing using category 5 activity types with a variable planned allocation and saved ourselves the trouble of creating an indirect activity allocation cycle. Let’s see how this works. The sender cost center is SND5B, and the three receiver cost centers are RCV5D, RCV5E, and RCV5F. I used the exact same plan as for the fixed allocation example, except the planned allocations are now variable.
The planned MACHHR activity and the CATEG5 activity allocated for the three cost centers are as follows:
• RCV5D: MACHHR – 8,000 HR and 50,000 units of CATEG5 allocated – variable
• RCV5E: MACHHR – 16,000 HR and 30,000 units of CATEG5 allocated – variable
• RCV5F: MACHHR – 24,000 HR and 40,000 units of CATEG5 allocated – variable
Using RCV5D as the example, note that the allocation is planned as variable instead of fixed.
This is done for all three of the receiving cost centers, and a total of 120,000 units of CATEG5 have been allocated from cost center SND5B.
Let’s look at the plan for cost center SND5B. Now the costs are planned in the variable column.
When running KSPI to generate the costs, the activity price will be 100% variable.
During period 4 (April), 500 hours of MACHHR was posted in RCV5D, 700 in RCV5E, and 1,200 in RCV5F. Prior to running KNMA, the Cost Center Target/Actual/Variance report shows this for the four cost centers: SND5B,
The targets for the allocations for each of the receiver cost centers are entirely based on the posting of the receiver activity MACCHR. If you refer back to the category 2 activity type example in the previous blog post, you will see the same results.
Next, we will run KNMA to post the CATEG5 activity in SND5B. If we look at the results of the calculation we see that the operating rate for SND5B/CATEG5 is not 100% like we saw before, but instead is 64.37%. This is based on the actual quantity of MACHHR that was posted in all the receiver cost centers. This percentage times the planned quantity for the period determines the total quantity being posted.
The Cost Center Actual/Target/Variance report shows the following results. Compare this to the previous fixed allocation example to see the difference. Then compare them to the category 2 activity type example which used receiver activity as the tracing factor.
First, let’s look at SND5B and see what was posted for CATEG5.
Note that the actual activity posted reflects the activity operating rate that was displayed for KNMA. The receiving cost centers will show the results of the variable allocation. First, look at RCV5D,
and then, RCV5E
Since this last use of Target=Actual indirect activity allocation is so simple, you may wonder why I showed you a similar example using category 2 activity types. The reason is because that is what my company has been using for doing our activity allocations! In our first implementation back in 2008, we originally only used KNMA for doing our activity allocations because we were planning fixed allocations. When we wanted to move to doing variable allocations, we were shown KSC1 and KSC5 and, of course, we were able to make that work. What we didn’t know (and I am including our consultants in the “we”) was that KNMA also worked with variable allocations. I’m sure there is a lesson in there somewhere, but I’ll let you determine what that is.
That ends our journey through activity type postings. My intent was to help clarify some of the mystery concerning activity types. Hopefully, you have found some useful information that will help you find the best ways to use activity types in your implementations, and maybe you can even find a way to automate some of the manual work currently being done.
Our journey through activity type postings begins with activity type category 1 (manual entry, manual allocation). I think of category 1 as the vanilla ice cream of posting activity. This is the most common and straightforward method to use and understand. Activity types defined with this category must post directly to a cost center and at the same time have a receiver cost object for the allocation assigned. Look at the definition of activity type CATEG1 below. In this case, the actual allocation category is left blank, which means that it will be the same as the plan activity type category. For CATEG1, that means the actual category will be 1.
Several colleagues have asked questions about integration between Materials Management (MM) and Financial Accounting (FI) module:
- How do postings from MM flow into FI?
- How do we find out what occurs behind-the-scenes?
- How do we identify which movement types are pointing to a specific GL Account?
- Is there a way by which we can change the posting to a different General Ledger (GL) Account?
- How does one create a new movement type and assign it to a specific GL Account?
Many SAP practitioners – IT and business alike – are in similar situation and do not know where to start on MM-FI data flow and reconciliation. This blog is an attempt to clarify the fundamentals of MM-FI account determination.
Configuration transaction OBYC forms the core of SAP’s integration between the MM, FI, and Controlling (CO) modules in a traditional SAP ERP system.
Dive into this list of the top FAQ's on SAP S/4HANA Finance.
Is merging of actuals & plan into ACDOCA versus ACDOCP? Is the planning data going to go to ACDOCA or ACDOCP? If we copy actual to plan for each monthly forecast version, will the P table end up with 12 times the records of the A table?
Planning data will update to ACDOCP. In your copy function you would have to decide at what aggregation you updated ACDOCP (1:1 or roll-up e.g. production orders to not have quite so much data in your forecast).
Category 4 activity types are unique in that they do not allow any sort of allocation at all. They are manually posted like category 1 and category 3 activity types, but that is the extent of it. The activity stays in the cost center. You might be saying to yourself, “Why have an activity type that cannot allocate costs between cost objects? Isn’t that the main purpose of the activity type?”
We have gone into a lot of detail on how indirect activity allocation cycles work with category 2 (indirect determination, indirect allocation) are used. The main takeaway from category 2 type activities is that the quantity of activity posted is calculated based on information derived from the receiver cost objects. You either don’t know or find it difficult to determine how much activity should be posted. What if you do know how much activity should be posted, but don’t want to manually determine how to allocate the posting to other cost objects? That is where category 3 (manual entry, indirect allocation) activity types come in.
To continue on with my dessert analogy, this is more like vanilla ice cream with chocolate sauce: still good, but not quite the same thing as a sundae! With category 3 activity types, you have to make a “one-way” activity posting. The determination of the receiver cost objects and the allocations is performed using the indirect activity allocation cycle (KSC5), just like with category 2 activities. Our category 3 activity type is CATEG3.
To help understand the differences between category 3 and category 2 allocations, I have used the same planning setup for both. 120,000 units of CATEG3 is planned for cost center SND3, with $900,000 planned for the year. The three receiving cost centers are RCV3A, RCV3B, and RCV3C. The activity plan and allocation of CATEG3 from the support cost center SND3 is as follows:
• RCV3A: MACHHR – 8,000 HR and 50,000 units of CATEG3 allocated
• RCV3B: MACHHR – 16,000 HR and 30,000 units of CATEG3 allocated
• RCV3C: MACHHR – 24,000 HR and 40,000 units of CATEG3 allocated
This means that all 120,000 units of CATEG3 have been allocated from cost center SND3 to these three cost centers. Now that the above planning is complete, we will turn to the creation of the indirect activity allocation cycle using transaction KSC1. This cycle has one segment which is defined to calculate amount of the posted sender activity to allocate to each of the receiver cost centers. The quantity of MACHHR activity posted in each of the receiver cost centers is the determining factor for the allocation. Posted Quantities is selected as the sender rule. Note that when Posted Quantities is selected, there is no Sender Values tab. This is because the sender activity quantity will be manually posted using transaction KB51N and will not be calculated when running the cycle.
As before, the sender/receiver relationship is defined in the Senders/Receivers tab.
The receiving activity type is defined on the Receiver Tracing Factor tab. However, in this case the quantity of the MACHHR activity will be used to calculated the relative quantity of CATEG3 to allocate to each of the receiving cost centers based on the weighting factors assigned to each receiver.
The weighting factors for this allocation will again be calculated based on the rate of consumption of the planned allocation of the sender activity (CATEG3) for each receiver activity type.
• RCV3A: 50,000 CATEG3 / 8,000 MACHHR = 6.25
• RCV3B: 30,000 CATEG3 / 16,000 MACHHR = 1.875
• RCV3C: 40,000 CATEG3 / 24,000 MACHHR = 1.666667
If we look at the calculation for RCV3A, this would mean that we are planning to use 6.25 units of CATEG3 from cost center SND3 for each hour of MACHHR that is posted in RCV3A. This time, however, these factors will only be used to determine how the manually posted quantity of CATEG3 will be allocated when all three receiver cost centers have been taken into account. As before, the weighting factors in the cycle must be whole numbers and the divisor is set to 1,000,000 to avoid rounding.
During period 4 (April), 500 hours of MACHHR was posted in RCV3A, 700 in RCV3B, and 1,200 in RCV3C. The Cost Center Actual/Target/Variance report looks like this for each of the four cost centers (including SND3). In addition, 8,500 units of CATEG3 activity have occurred in cost center SND3. First, it is necessary to post the CATEG3 activity in SND3. This is done using transaction KB51N. KB51N acts like KB21N, except that it is not possible to assign a receiving cost object. Category 3 activity types are indirectly allocated using the indirect activity allocation.
Now that the activity has been reported, it’s time to look at the cost center target/actual/variance report for the four cost centers. Note that targets are generated for SND3 because the activity has been posted. However, the cost for CATEG3 has not been credited, because the allocation has not been executed yet.
The behavior of the one-way posting aspect of category 3 activity types is demonstrated here. Looking at the 3 receiver cost centers, we can see that the targets generated by the posting of the MACHHR activity type are the exact same as we saw in the category 2 example of the receiver cost centers. Compare the pre-allocation RCV3A with the pre-allocation RCV2D in the previous category 2 example.
RCV3B looks like RCV2E
and RCV3C looks like RCV2F.
The allocation of the costs from the sender cost center is accomplished using the indirect activity allocation cycle ACT3.
The report that is generated shows that a total of 8,500 units of CATEG3 has been allocated to the three receiving cost centers. This is the amount that was posted with KB51N.
Before we look at the results of the allocation, let’s understand how the calculation was done for the amount of activity allocated to each receiver. We first need to calculate the actual weighting factors for each cost center. We will use the weighting factors from the allocation and multiply by the amount of receiver activity in each cost center.
• RCV3A – 6.25 x 500 = 3,125
• RCV3B – 1.875 x 700 = 1,312.5
• RCV3C – 1.666667 x 1,200 = 2,000
Adding the three weights together gives a value of 6,437.5. The 8,500 units of activity CATEG3 will then be allocated based on the above calculated portions.
• RCV3A – 3,125 / 6,437.5 x 8,500 = 4,126.214
• RCV3B – 1,312.5 / 6,437.5 x 8,500 = 1,733.01
• RCV3C – 2,000 / 6,437.5 x 8,500 = 2,640.776
After running the cycle, we now see that the sender cost center SND3 now has the credit for the activity posting assigned to cost element 943903.
In the previous category 2 allocation example, the secondary cost element posts in the receiver cost centers matched the target costs. That is because the quantity of activity was calculated to match the target. Since we are independently posting the quantity of sender activity in this example, the targets won’t likely match up. We can see this is RCV3A,
Since we previously demonstrated the effect of running KSII for activity types that allow revaluation to actual, we will not demonstrate this here. A good question at this point would be why use category 3 activities for allocation? For category 2 activity types, we either didn’t care that the exact amount of sender activity was posted or there was no good way to determine how much activity to post. The indirect activity allocation cycle calculated that for us. With category 3 activity types, we explicitly know and can post the amount of sender activity and we want to have the system do the allocation instead of us having to manually determine how much activity would go to each receiver. In my next post, I will be switching gears away from the indirect activity allocation postings to look at category 4 activity types (manual posting, no allocation).
Previously, we discovered how to automate activity type postings using the indirect activity allocation cycle and category 2 activity types. The example chosen was to use a statistical key figure which was posted to the receiver cost centers as the means for calculating the sender activity type quantities. This still required some manual postings for the statistical key figure, but the calculation of the activity type quantity and the actual postings were handled automatically when running the cycle.
Category 2 activity types are for indirect determination and indirect allocation. If category 1 activity types are vanilla ice cream, category 2 activities are more like hot fudge sundaes. There is a lot of power built in to how postings are made with these activity types.
Tip 14 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:
You can use internal order budgeting to control actual expenditures by activating availability control.
An internal order budget represents funds approved by management. A budget is maintained at either an overall or annual level. You can activate availability control, which can issue warning or error messages based on defined tolerances. Let's look at how to create an internal order budget and how to activate availability control.
You can maintain a budget profile with Transaction OKOB or via the following IMG menu path: Controlling • Internal Orders • Budgeting and Availability Control.
Double-click a budget profile to display the the internal order budget profile. Activation type 1 indicates automatic activation of availablity control during budget allocaiton. If the Overall checkbox is selected, availability control checks against the overall budget. If it isn't selected, availaiblity control checks against the annual budget. Availability control works with controlling area currency, unless you select the Object Currency checkbox. You can assign the budget profile to an order type with Transaction KOAB or via the first menu path.
You can maintain availability control tolerances via the following IMG menu path: Controlling • Internal Orders • Budgeting and Availability Control • Define Tolerance Limits for Availibility Control
Left-click then right-click in an action field and selct posible entries to display the avabilty control and tolerance limits screen.
The action field defines the messages and emails the system will send at specific degress of budget overrun. In this example, when the budget is nearly consumed at 95%, a warning is issued with an automatic email to the persons responsible. Specify a budget manager with Transaction OK14, or the system will issue an error message. With a budget overrun at 105%, an error message is issued.
You can enter an order budget with Transaction KO22 or via the following menu path: Accounting • Controlling • Internal Orders • Budgeting • Original Budget.
Keep reading in Things You Should Know About Controlling with SAP (2nd Edition). Use coupon code CTLSP10 for 10% off on www.sap-press.com.
Tip 50 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:
Process orders provide you with extra functionality, such as phases and process instructions for process industries.
If you use production orders, the system transfers a routing and a bill of material (BOM) into the master data of the order header. If you’re manufacturing on the basis of process orders, the system uses the master recipe and associated materials list. The difference occurs because process industries manufacture in phases, converting initial liquid batches into consumable batches, which are then bottled and packaged.
Finance professionals and Controllers traditionally face increased workloads at the end of every period, and especially at year-end. Batch jobs need to be started and results monitored and analyzed. Reliable information showing the complete picture is only available after the period close process is completed. For companies with high work in process, this can mean that there are thousands of dollars sitting on projects awaiting settlement.