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Coding Scheme for Cost Centre Hierarchy

Dear Friends,

Our company is in initial phase of implementation, right now we are defining coding scheme for our Cost Centre Hierarchy. In this regard I have some queries, please guide me with your precious comments.

1) Do we have to maintain uniform coding for all the nodes and cost centres i.e. maintaing Parent-Child relationship

eg. 1000 Company

1010 Operating Departments

1011 HR

1012 Finance

2) If we don't follow uniform coding, what are the consequences.

like maintaing cost centres / nodes and searching nodes/cost centres in the whole ERP envirement while posing transactrions.

3) We have right now arrond 3000 cost centres in our Hierarchy and will grow marginally in the coming years, my question is if we don't maintain parent-child relational coding than how we will be getting reports in range?

4) In my opinion, wouldn't be very cumbersome to design customize reports using (ABAP,SQL)?

I'll be highly grateful for your expert opinions,

Thanks & Regards

Ayaz

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2 Answers

  • avatar image
    Former Member
    Oct 17, 2008 at 10:13 AM

    Hiya,

    The CC Std Hierarchy is a logical / practical arrangement of Cost Centres within your orgn. Hence you are at liberty to define them in a manner that makes most sense to the stakeholders.

    Some use "talking numbers" - the first few characters represent the (say) region, then next few represent the (say) functions, etc. SAP provides you 10 characters, so make good use of it.

    Some considerations would be:

    1. You may want to use these for assessment/distribution, so check if these can be used as a range, where possible. That will eliminate the need for alternative CCGroups.

    2. Talking numbers can be used effectively in COPA derivations or Business Processes (ABC)... so thats another consideration, especially if you are working with more than one Company Code, and just 1 Co Area.

    3. Consider ways to make it easier for the endusers to find the correct CC. If the logic is too convoluted, you are testing their patience each time they use it. That manifests as resistance to change.

    etc... there could be many such factors based on your specific requirements - there is no best practice when it comes to Std Hierarchy definition. Discuss this with the Finance/Accounting head - normally, they have specific requirements as a result of their day-to-day activities and issues they face... they are the ideal guides.

    Cheers.

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    Former Member
    Oct 17, 2008 at 10:27 AM

    Hi Ayaz,

    It is good that you are doing the proper information gathering in the initial phase of the project. The explanation is as follows

    1. It is always advisable to have the uniform pattern for coding the cost centers. You can internally decide some broad cost center groups, subgroups as required within the cost center groups and also the coding range that will be used for the relevant groups.

    2. If you do not follow the uniform coding, you will have to be very particular while grouping of the cost centers for each group, subgroup.

    3. As mentioned earlier, its required to have cost center groups, subgroups, which will help in getting the required reports

    4. There should not be much need for any ABAP development, if the aforesaid activities are carried out.

    Hope this helps.

    regards,

    Mandar

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