General Controlling

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Implementation Guide and System SettingsUseBefore you use the R/3 System, you must configure it to your specific requirements and organizational structures. This involves setting a large number of parameters that must be complete and consistent. To enable you to do this easily and systematically, the Implementation Guide (IMG) offers a framework for the configuration functions. The IMG is divided into central and component-specific system configuration functions. Furthermore, when the SAP R/3 System is operating, you must make continual adjustments and changes that are carried out using the function Environment pUpdate settings found in the menus of the corresponding application components. If system configuration is required for a new release (wide-ranging functional expansion of the R/3 System) or for an upgrade (limited program corrections and enhancements), you also carry this out with the aid of the IMG. Customizing, then, is a central means of system administration and maintenance used for: y y y R/3 System implementation and configuration Ongoing R/3 System maintenance Release changes and system upgrades

FeaturesThe aim of a central system administration is to provide a user-friendly way of adapting the SAP R/3 System to the individual needs of each organization. With the aid of the Implementation Guide (IMG), you can completely maintain all R/3 System configurations.

You use the IMG to configure your organizations specific structures. This task is simplified by the hierarchical subdivision of the IMG: y y y You set cross-component defaults, such as the assignment of organizational units. After general Customizing, you make Customizing settings for specific application areas. The IMG activities are structured in the order that they are to be processed.

You make the settings necessary for Controlling (such as, defining the cost center categories in your organization) with the IMG for the Controlling component (CO).

In the IMG you can: y y Display information necessary for R/3 System configuration Branch to the relevant Customizing transaction and make the necessary settings

SAP provides an Implementation Guide IMG, which you can use for Customizing in all components. You can adapt this SAP Reference IMG according to your requirements: y You can use the reference IMG to create a customer-specific IMG containing only the applications and country-specific data you wish to use. The Enterprise IMG can be further subdivided into Project IMGs. To do this you select from more functions and countries. You can create a release-specific IMG containing only those parts of the customer-specific or project IMGs for which release information is available.

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In each project IMG you can create specific views in order to reduce the number of implementation activities: y Mandatory activities must be executed before the production start. The R/3 System standard settings are usually adapted to meet each customers requirements. Optional activities need not be included for a productive start. SAP recommends checking the standard R/3 System standard settings. Customer-specific adjustments may be necessary, depending on the given requirements. Non-critical steps contain activities that need not be included for a production start. Checking the SAP R/3 System standard settings is not necessary. SAP recommends adopting the standard R/3 System standard settings. Customer-specific adjustments are rarely needed and should be made only with the aid of an SAP consultant. Critical steps demand special caution because errors can have far-reaching consequences requiring a great number of corrections.

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Before you begin using the SAP R/3 System, you should edit the system settings and maintain the corresponding parameters for the necessary parts of the R/3 System. For more information, see the relevant sections in the IMG and make the system settings.

Before you create master data for cost centers, read Cost Centers in the IMG for Controlling and make the relevant configurations. You can change and maintain some configurations in a productive system by choosing Environment p Update settings. From there you can access the corresponding sections of the IMG. For more information, see the R/3 Library under BC Basis p Business Engineer p Configuration Tools p IMG ( See also: Implementation Guide (IMG)).

Controlling OrganizationUseUsing the R/3 System, you can define each of the organizational units in your organization from the perspective of an SAP application component.

In the integrated R/3 System there are direct links between internal and external accounting. This is also reflected in the relationships of the organizational structures of Controlling (CO) and Financial Accounting (FI). You define the organizational structure in the Financial Accounting component (FI) from an external accounting perspective. You define the organizational structure in the Controlling component (CO) from a managerial accounting perspective. Since the R/3 System is fully integrated, you must define the organizational structure on a crosscomponent basis.

You assign organizational units from the Financial Accounting component to the units in the Controlling component. This enables you to transfer cost-accounting-relevant postings to Controlling. The following sections describe the organizational units used in the Controlling component (CO) and those from other components linked to the Controlling organizational units. You cannot define these organizational units separately from one another.

Cross-component relationships exist between the following organizational units in internal and external accounting: Company code in the Financial Accounting component (FI) Business area in the Financial Accounting component (FI) Controlling area in the Controlling component (CO)

Company CodeDefinitionThe company code is the smallest independent unit representing a closed financial accounting system in an organization. This involves the recording of all relevant transactions and generating all supporting documents for financial statements, such as balance sheets and profit and loss statements.

Controlling AreaDefinitionThe controlling area is an organizational unit that represents a closed system used for cost accounting purposes. A controlling area may contain one or more company codes, which can operate in different currencies, if required. The company codes within a controlling area must all use the same operational chart of accounts. All internal allocation transactions refer only to objects from the same controlling area.

UseInternal business transactions are portrayed in the controlling area. Primary costs are transferred from external accounting and classified according to managerial accounting perspectives If the primary . cost are direct costs, they are assigned directly to cost objects; if they are overhead costs, they are assigned to cost centers or internal orders and allocated further using internal allocation methods. Both organizational units are assigned when you create master data. Controlling objects are assigned to a controlling area and a company code at the same time. The level of detail provided by the Controlling component enables you to track specific information for cost monitoring, business decisions and sales control. For example, the Controlling component contains subdivisions such as cost centers and internal orders in addition to accounts.

Business areaDefinitionThe business area is an organizational unit in external accounting. It corresponds to a separate operational or responsibility area in the organization and value flows recorded in Financial Accounting can be assigned to it.

UseBusiness areas are used primarily in segmented external reports dealing with significant areas of the organization, such as product lines and branch offices, that cross company code boundaries. Segments can be defined as an isolable operational field in the organization If you want to create business area balance sheets for internal reporting purposes, you must maintain the business area within the Controlling component as well. This means that when you create cost center master records you must specify the business area. CO objects, such as cost centers and internal orders, function as account assignment aids since the business area can be derived from the master data records. When you post primary costs to a cost center, for example, the R/3 System determines the business area automatically from the cost center master data. This enables the costs to be assigned to the correct business area. Therefore, you do not need to manually set the business area in the posting document, as it can be set automatically by the system This reduces the number of incorrect assignments to a minimum.

Operating Concerns ?DefinitionThe operating concern represents a part of an organization for which the sales market is structured in a uniform manner.

UseIndividual marketing segments, defined by a combination of classifications (such as product group, customer group, country, and distribution channel), are used to calculate operating profit by comparing costs and revenues.

IntegrationOne or more controlling areas can be assigned to an operating concern.

Profit CentersDefinitionA profit center is an organizational unit in accounting, which classifies the organization from a management perspective, that is, for the purposes of internal control. You can display results for a profit center, which are calculated using cost-of-sales and/or period accounting.

PlantsDefinitionA plant is an organizational unit in logistics, which classifies the organization from the production, procurement, maintenance and materials planning perspectives. A plant is where materials are prod