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How Internal order is different from cost center

Hi,

Can anyone give reasons why internal order is created. If cost center is created for specific task and expenses are captured will it not serve the purpose. Whats the purpose of creating internal order. Can anyone explain with example.

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    author's profile photo Former Member
    Former Member
    Posted on Jul 21, 2016 at 06:25 AM

    Kumari,

    Internal order and cost center, both are cost objects only, Internal order will use for a specific cost tracking expenses and cost center is a broad cost object.

    Internal order:

    It will use to track the special expenses like employee wise telephone expenses and travel expenses etc, in the month end we can settle these expenses to cost center, In this way we have the individual cost tracking.

    Internal orders also will use for capex budgeting with availability control.

    Cost center:

    Cost center will use only for expense booking, like department wise and unit wise, we can say it is a broad cost object than order.

    Regards,

    Ravi

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  • Posted on Jul 21, 2016 at 06:26 AM

    Hi Kumari,

    Cost center & Internal Order both are the elements of controlling. but the cost center is broader than Internal Order as part of reporting.

    Cost Center - An organizational unit within a controlling area that represents a defined location of cost incurrence. Cost center is a organizational unit which you will classify your expenses cost center can be department or prduct etc.

    Inernal Order - A description of a simple task or measure within a controlling area.Supports action-oriented planning as well as monitoring and allocation of costs.An activity used to enter transactions you intend to conclude, but which must not necessarily be executed.An Internal Order is a self-contained mini project cost object, i.e. it's a collection of costs, but not a full project with WBS element and network relationships.


    Thanks & regards,

    Ankur Chauhan

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  • Posted on Jul 21, 2016 at 06:31 AM

    Hello
    Please check Internal Orders - CO-OM-OPA.
    Unlike cost center, internal order has a life-cycle determined by the status:

    Create;
    Released;
    Technically Complete;
    Closed.

    Also they are different from sales orders or production orders as they are not involved in logistical control.

    Best regards,
    Miya

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  • Posted on Jul 21, 2016 at 07:00 AM

    Hello Kumari,

    Please check below thread.

    Cost center v/s Internal Order | SCN

    Regards,

    Ajay

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