CONTROLLING

[Former Member]

hi sap gurus,

an anyone tell me?? What is Cost element and cost center ? what is the difference between

cost element and cost center?

Regards,

shilpa.

[iklovski · Accepted solution]

Hi,

A cost element classifies the organization's valuated consumption of production factors within a controlling area.

It corresponds to a cost-relevant item in the chart of accounts.

Cost centre generally represents organizational unit within a controlling area that represents a clearly delimited location where costs occur. You can make organizational divisions on the basis of functional, settlement-related, activity-related, spatial, and/or responsibility-related standpoints

So, these are two different objects. You can read more here:

http://help.sap.com/saphelp_47x200/helpdata/en/5b/d2200743c611d182b30000e829fbfe/frameset.htm

Regards,

Eli

[Former Member]

hi,

Cost Element Accounting (CO-OM-CEL)The Cost Element Accounting component provides information which includes the costs

and revenue for an organization. These postings are automatically updated from FI (Financial Accounting) to CO (Controlling)

. The cost elements are the basis for cost accounting and enables the User the ability to display costs for each of the

accounts that have been assigned to the cost element. Examples of accounts that can be assigned are Cost Centers,

Internal Orders, WBS(work breakdown structures). Cost Element describes the origin of cost. Cost Element is 2 types.

They are as follows. A. Primary Cost Element

B. Secondary Cost ElementPrimary Cost element is used to transfer cost from FI to CO. It is the cost carrier from

FI to CO. Primary cost element can be directly posted and it is linked to a G/L account and must first be created in

the FI Chart of Accounts. Secondary cost element cannot be directly posted. An example will be the Cost Center.

Secondary cost elements can only be created in Controlling. Primary Cost Elements are those which are created from

FI general Ledger Accounts and impact the financial accounts Eg. Traveling expenses, consumption account infact

any Profit and Loss GL account. Primary (Direct Expenses) cost elements arise through the consumption of productions

factors that are sourced externally. Secondary Cost Elements are those which are created only in controlling and does

not affect the financials of the company. It is used for internal reporting only. The postings to these accounts do not

affect the Profit or Loss of the company. Secondary (settlement / apportionment from dept to dept) cost elements arise

through the consumption of production factors that are provided internally i.e., by the enterprise itself.

Secondary cost elements are posted indirectly.2. Cost Center Accounting (CO-OM-CCA)Cost Center Accounting

provides information on the costs incurred by your business. Within SAP, you have the ability to assign Cost Centers

to departments and /or Managers responsible for certain areas of the business as well as functional areas within your

organization. Cost Centers can be created for such functional areas as Marketing, Purchasing, Human Resources, Finance,

Facilities, Information Systems, Administrative Support, Legal, Shipping/Receiving, or even Quality. Some of the benefits

of Cost Center Accounting : (1) Managers can set Budget /Cost Center targets; (2) Cost Center visibility of functional

departments/ areas of your business; (3) Planning ; (4) Availability of Cost allocation methods; \

and (5) Assessments/ Distribution of costs to other cost objects.

if useful assign points

[Marssel700]

Hi,

Cost Element

Items in a chart of accounts that are relevant to cost, are referred to as cost elements. They are used for entering all costs within the entire cost accounting system.

Cost Center

An organizational unit within a controlling area that

represents a defined location of cost incurrence.

Part of a company seen as a separate area of responsibility, location or cost-accounting entity. Place at which costs occur.

Rgds