SAP Controlling Cost Center

The SAP CO Cost Center is one of the important components of the system that enables the organization using it to add the costs directly and indirectly to the profit of the organization. Examples include Marketing and Customer Service. The simple and straightforward division in an organization can be classified as cost center because the cost is easy to measure.

How to create a new SAP CO Cost Center?

Following are the simple steps used in SAP CO to create new Cost Center within the system,

1.       To create a Cost Center, Enter KS01 into SAP transaction code box.
2.       In the next SAP screen
3.       Enter the new cost center number.
4.       Enter the validity dates of the new cost center.
5.       Optional - In the Reference section:
6.       In the Cost Center field, you can enter a reference cost center if the details are similar to the new cost center.
7.       In the Controlling Area field, you can enter the reference cost center's controlling area.
8.       In this tutorial, we will create a cost center without a reference.
9.       Click Master Data Button
10.   In the Names section:
11.   In the Name field, enter the name of the new cost center.
12.   In the Description field, enter a description for the new cost center.
13.   In the Basic Data section:
14.   Enter the Person Responsible.
15.   In the Basic Data section:
16.   Enter the Person Responsible
17.   Select W (Administration. for Cost Center Category.
18.   Select the Hierarchy area.
19.   Enter the Company Code.
20.   The Currency will default based on the earlier selections.
21.   On the Control tab, select the appropriate indicators.
22.   Click Save. New Cost Center is created.

Why is A Cost Center required?

It is the location where the costs are incurred. It can be setup based on areas of responsibility, functional requirements, allocation criteria, geographical locations or activities or services provided. Its purposes are to provide cost-related information in Overhead Cost Accounting for which cost centers are grouped into units of decision making, control, and responsibility. To map this structure, Cost center is placed in the cost center standard hierarchy.

How to Create Cost Center Groups

1. Enter Transaction Code KSH1 in the SAP Command Field

2. In the next screen, enter the Cost Center Group ID to be created

3. In the next screen, enter the Cost Center Group Description

4. Press 'Save' button in the SAP Standard Toolbar for the Creation of the Cost Center Group