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Former Member

WBS best settlement option

Hi experts;

     I am new as SAP CO consultant at constructions company.

I have an issue about Projects settlement in another words, meaning the WBS under the projects.

I have some inquires regarding such issue, and I found a thread on the forum including a close answer to one of my questions ( )

and here is a part of explanation for the core of the issue:

* we start our projects based on contracts with our clients like a university for ministry of Education or a hospital for ministry of Health.

* we create the project on SAP PS as WBS under it another levels of WBSs, for instance:

          Project C-100200

                    WBS C-100200.01  Overhead

                    WBS C-100200.02  Materials

                    WBS C-100200.03  Labors

                    WBS C-100200.04  Billing

under there are Networks assigned to WBS specially for Materials.

* We start to allocate direct cost through the PR-->PO--> Goods Rec.--> Goods Issue on the Materials WBS under the Project.

* Labor costs comes over the WBS Labors from the HR.

WBSs for both the Overhead and Billing are posted directly from FI over their relevant WBSs (regarding the Billing it is recorded based on a service entry sheet and we are planning to implement Bill of Services scenario soon)

Questions are:

1. According to above scenario, what is the best settlement scenario for the WBSs, to be settled to CO-PA (PSG) or Sales Order (However yet I cannot settle over SO because we yet don't have Bill of Service scenario) or Profit Center or which cost object? My PS colleague recommends to be settled to a Profit Center, is it really the best option? I believe it is better not to be settled over Profit Center to keep Profit Center for Grouping i.e. group of Health Projects, Group of Education projects on.

So my expert colleagues, what is your recommendation please and why?

N.B.  settlement to AUS is rejected because Projects are not owned by us so I cannot define them as an Asset to be sold latter.

2. From Business side, I can not yet understand what is the need or the benefit from doing settlement for the costs and revenues recorded over a project. As far I know that best gain from settlement over CO-PA or SO or whatever the cost object is to be able to have an independent Income Statement for my Profit Segment, So if I can get that (I mean an Income Statement for each project) from normal post to the WBSs through some standard reports such as CJI3 or S_ALR_87013531 which will give us the Total Costs and Total Revenues on the level of each project which is equivalent to same result from the Income Statement which is net Profit or Loss at the end. So why we do need to do settlement?

Kind regards;

Thanks in advance and your support and help are highly appreciated;

Ahmad Mahmud;

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    Former Member
    Dec 30, 2014 at 11:46 AM

    Hi Ahmad

      I agree with you...and I want to share my views as below:

      1. I will prefer CO-PA in case of manufacturing industry where marginal cost is one of the important area to calculate profitability. Also in some business (Retails) where CO-PA is used to generate product/division wise through settlement cost can be flown to COPA.

    2. In your scenario where WBS elements is capturing costs and revenues and report is basically required at project level...I agree with you that COPA reports are not required to burden the system

    3. Where to settle your costs from sender to receiver depends on how do you want to create your business reports...So. in my opinion, it is not correct that PC will be the best..are you going to make analysis on PC segment basis...then again you have to define every project as a Segment which only a duplicate phenomenon where you getting your desired result at Project level 

      Let's see the other opinion also.

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    • Former Member Former Member

      His Kamal ;

      It was good and clear explanation from your side.

      Thank you very much and hope to have further discussion with you where it is really interesting and useful.

      Kind regards ;

      Ahmad Mahmud;