Introduction to Controlling (SAP CO)

SAP CO (Controlling) is clubbed with the SAP FICO module and remains as one of the important SAP ERP modules offered to enterprises. The SAP CO enables various cost control and maintenance tasks required in an organization and supports optimistic functions to ease the complexity of planning, reporting and monitoring operations of businesses. The module has several predefined methods to view and organize costs that are required for financial reporting. The cost controlling module enables one to plan, track, perform and report on costs. Controlling includes managing and configuring master data that covers cost elements, cost centers, profit centers, internal orders, and functional area and so on.

In addition to various cost control functionality, it also supports coordination, monitoring, and optimization of various processes in an organization within the SAP ERP system. SAP CO involves recording both the consumption of production factors and the services provided by an organization.

SAP CO includes managing and configuring master data that covers cost and profit centers, internal orders, and other cost elements and functional areas.

The main purpose of SAP controlling module is planning. It enables you to determine variances by comparing actual data with plan data and thus enables you to control business flows in your organization.

SAP CO Integration with Financial Accounting

Both SAP CO and SAP FI modules are independent components in a SAP system. The data flow between these components takes place on a regular basis.

Data flows relevant to cost flows to Controlling from Financial Accounting. At the same time, the system assigns the costs and revenues to different CO account assignment objects, such as cost centers, business processes, projects or orders.

SAP CO Submodules

There are several submodules built within the SAP CO module. They are,

Controlling-Sub Modules

Overhead Cost Controlling – Overhead Cost Controlling will enable the user to plan, allocate, control, and monitor overhead costs. Tracks and examines the causes of costs in the functional areas of an enterprise   e.g. Cost center, Order etc

Product cost controlling – Product cost controlling can be used for calculating and evaluating the cost of goods manufactured for a product.

Profit Center Accounting – Profit Center Accounting can be used to calculate the profit of an area of responsibility within the organization (e.g. branch). It calculates the cost for manufacture a product, or to provide a service. It allows you to calculate the price at which you can profitably market it.

Cost center Accounting – Cost Center Accounting can be used for controlling purposes within the organization. The costs incurred by the organization should be transparent. It is used to evaluate profit or loss of individual, independent areas within an organization. These areas are responsible for their costs and revenues and enable the user to check the profitability of individual functional areas and provide decision-making data for management. This requires that all costs be assigned according to their source. However, the source-related assignment is especially difficult for overhead costs. Cost Center Accounting lets you analyze the overhead costs according to where they were incurred within the organization.