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Introduction To SAP CO UNIT1

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43 views21 pages

Introduction To SAP CO UNIT1

Uploaded by

krishnasaykhedkar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SAP

Unit 1 : FICO Module: Introduction to SAP CO


Agenda
1. Understand What is CO (Controlling)
2. Understand What is CO – Object?
3. Understand What is Management Accounting?
4. Understand Difference between Management
Accounting and Financial Accounting

2
Module Objectives
• Upon completing this module, you will be able
to:
• Understand What is CO (Controlling)
• Understand What is CO – Object?
• Understand What is Management Accounting?
• Understand Difference between Management
Accounting and Financial Accounting

3
Agenda
1. Understand What is CO (Controlling)
2. Understand What is CO – Object?
3. Understand What is Management Accounting?
4. Understand Difference between Management
Accounting and Financial Accounting

4
What is CO
• CO – Controlling is a management
accounting, i.e. analysis of profit and loss
accounts at co-object level.
• Purpose of CO – Internal / Operationsl
decision making for middle management
while executing the day to day business.
Agenda
1. Understand What is CO (Controlling)
2. Understand What is CO – Object?
3. Understand What is Management Accounting?
4. Understand Difference between Management
Accounting and Financial Accounting

6
What is FI

Real Personal Nominal


Accounts Accounts Accounts

Microsoft Office
Excel Worksheet
What is CO - Object
• CO Object– Controlling Object is a account
assignment to General ledger account,
which further analyze the profit and loss
accounts.
Example of CO-Object –
1. Cost Centre
2. Projects
3. Network / Activity
4. Service Order
5. Production Order
6. Sales Order
7. Internal Order
8. Maintenance Order
9. Profitability Segment
Agenda
1. Understand What is CO (Controlling)
2. Understand What is CO – Object?
3. Understand What is Management Accounting?
4. Understand Difference between Management
Accounting and Financial Accounting

9
What is Management Accounting
• Management Accounting -preparing and
providing timely financial information to
managers so that they can make day-to-day
and short-term decisions
• Purpose - profit maximization by
1.Reducing cost, with same Revenue
2. Increasing revenue, with same Cost
3.Higher increase in revenue with lower
increase in cost
Agenda
1. Understand What is CO (Controlling)
2. Understand What is CO – Object?
3. Understand What is Management Accounting?
4. Understand Difference between Management
Accounting and Financial Accounting

11
Difference between Management Accounting
(CO) & Financial Accounting (FI)

Srl Finance Controlling

1 FI is related to external Preparing and providing


accounting system in timely financial information
which u r suppose to to managers so that they
make B/S, P&L for can make day-to-day and
legal requirements. short-term decisions

2 External Reporting to Management reports like


following Agencies – cost center reporting,
Share holders, Order reporting, Product
Creditors, Bank, Tax cost reporting which helps
Authorities, Stock middle management to
Exchange etc. make decisions

3 In SAP , company code In SAP, Operating concern


represents FI and Controlling Area
represents CO
Business case study - I
Company CEO wants to extend the services to customer like XYZ1,XYZ2 and
XYZ3)
There is scarcity of resources to extend the services, current available information
with company is as follows

Only FI Implemented

XYZ1 XYZ2 XYZ3 Total

Rev 10000 5000 20000 35000

Cost 25000

Profit 10000
Business Case Study - I

Based on data available we have to decide –


To which Customer Company should extend the
services ?

Based on available data we may decide that


XYZ3 is our highest revenue customer and we
should extend the services to XYZ3.
Business Case Study - I
CO Implemented

XYZ1 XYZ2 XYZ3 Total

Rev 10000 5000 20000 35000

Cost 5000 2000 18000 25000

Profit 5000 3000 2000 10000

% Profit 50% 60% 10%


Business Case Study - I
• If only FI Implemented and there is resource
crunch, my first choice will be to increase
Business/service to XYZ3, if I have
implemented only FI and my choice will be
XYZ2 if I have implemented CO.
• CO gives us internal analysis of Cost as well
as revenue.
Business Case Study - II
CO-Objects are designed in SAP for further analysis of FI posting. Analysis of GL
posting at co-object wise like

Only FI CO-
Implemented Object
not
P/L Rent GL Account -> not created as cost applicabl
Acct Account Dr 5000 element e
B/S
Acct To Cash 5000

CO - CO-
Implemented Object
P/L Rent GL is created as primary cost Cost
Acct Account Dr 3000 element center 1
P/L Rent GL is created as primary cost Cost
Acct Account Dr 2000 element center 2
B/S
Acct To Cash 5000
Business Case Study - II
1. Example of Rent account i.e. if we have implemented
only FI, CO-object is not required for FI posting, at
the same time we do not get analysis of FI posting.

2. Now consider that we have implemented CO means


we have created GL accounts as primary cost
elements so now CO-object becomes necessary /
mandatory for posting so we get analysis of FI
posting at CO-object level.
Knowledge Check

1.What is purpose of implementing


Controlling in SAP?
2. What is the difference between FI
and CO
3.What is the Cost Object ?
4.What are the examples of CO-
Objects?
Module Summary
– What is CO (Controlling)
– What is CO – Object?
– What is Management Accounting?
– Difference between Management Accounting and Financial Accounting

• 20
Questions and Comments
• What questions or comments

do you have?

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