Management Accounting

Main Process

 

Assigns costs, revenues and balance sheet items to internal areas of responsibility to provide the basis for external segment reporting and internal reporting by profit center. Supports both the period accounting and the cost-of-sales approach. Can be implemented either as an extension of the general ledger to include the dimensions segment and profit center (new general ledger) or as a separate ledger specifically for Profit Center Accounting (classic general ledger).

Records costs incurred during the company operations by assigning them to cost centers (assigned to managers or organizational units). Plans, records, and then analyzes costs against the plan. Uses internal orders to plan, collect, and settle the costs of internal jobs and tasks. Monitors internal orders throughout their entire lifecycle using the SAP system, from initial creation, through the planning and posting of all the actual costs, to the final settlement and archiving.

Monitors precise planning of the detailed activities involved in both large scale projects, such as building a factory, and small scale projects, such as organizing a trade fair. Helps the project manager ensure that the project is executed efficiently, on time, and within budget - which he or she achieves by ensuring that the required resources and funds are available as and when needed.

Can be implemented either to integrate with PS or with cProjects. In the case of PS, revenues and costs may be assigned to each work breakdown structure element and budget assigned hierarchically. In the case of cProjects, accounting is performed in ERP using either an internal order or multi-level work breakdown structure to capture the associated costs and revenues as the relevant postings as made to the cProject.

Manages investments as fixed assets, research and development, or projects normally maintained under overheads. Does not limit the term investment only to investments capitalized for bookkeeping or tax purposes. Defines an investment in this context as any measure that initially causes costs, and that may only generate revenue or provide other benefits after a certain time period has elapsed (for example, plant maintenance projects).

Helps a company know the costs incurred by its products in order to successfully manage the product portfolio. Calculates cost of goods manufactured (COGM) or cost of goods sold (COGS) broken down by each step of the production process. Uses cost information gathered about the product automatically in other SAP applications. Period close activities include the calculation of work in progress, variances and scrap and the settlement of product costs.

The approach to Product Cost Accounting is determined by the type of manufacturing process. In an engineer-to-order or make-to-order environment, the focus is on controlling the individual sales order. In a make-to-stock environment, the focus is on controlling the individual production or process order. In a repetitive manufacturing environment a period-based controlling may replace the individual order.

Supports the multilevel assignment of follow-up costs to inventories and cost of goods sold using the Material Ledger.

Manages transfer prices, which support organizations that divide tasks among different organizational units by valuating the goods and services exchanged between these units. Aids particularly large corporations that are often divided into a number of independently operating divisions or companies that exchange large quantities of goods and services with one another. Lets transfer prices be used for controlling corporate units as the division of labor between internationally operating units increases, value-added chains become more complex and responsibilities become more decentralized. Valuates the exchange of goods and services using transfer prices, to significantly influence the actual success of corporate divisions or profit centers. Helps today's accounting systems provide decision support that represents operational results from different points of views and using different currencies.