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Internal Order & Account Determination

Hi,

What is internal order and how it is related to determining account determination?

Regards

Debasish

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1 Answer

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    Former Member
    Oct 17, 2008 at 08:03 AM

    Hi,

    refer link:

    http://help.sap.com/erp2005_ehp_01/helpdata/en/a9/ab7376414111d182b10000e829fbfe/frameset.htm

    Hope, this may help you.

    Best Regards,

    Amit

    NOTE:

    Here is one good explaination made by Mr. Pankaj Singh, in his response to one such post:

    An internal order is used to accumulate cost for a specific project or task for a specific time period. An internal order is therefore used for a short period with a specific deadline.

    Your internal order will usually settle to cost centers (and not visa versa) according to the settlement rule in the order setup.

    An internal order can therefore be used to group all the expenses incurred to plan and hold a conference over a 3 month period. The order can be settled on a monthly basis to cost centers. When the conference is finished the order can be settled finally. The cost of the conference will then be spread over 2 or more cost centers, but can be viewed in total on the internal order when needed.

    Internal Orders - It is an instrument used to monitor costs and, in some instances, the revenues of an organization.

    Uses of Internal orders

    Monitoring the costs of short-term jobs

    Monitoring the costs and revenues of a specific service

    On going cost control

    Internal order categories

    Overhead Orders

    Investment Orders

    Accrual Orders

    Orders with revenue

    Cost centers are not for specific job. e.g If you have open Trade-fair / exhibition (1 month period), then to allocate cost, you can use Internal Orders (Say IO) you can post to IO, and from their to various cost centers. If management were to ask you the cost of that exhibition, Internal Order will help you

    Cost center is a responsible center in SAP. It cannot be defined as statistical but in transactions it may become as per other co objects.You will be able to find out the performance of the cost center using activities and plan values with actual value. This is lowest cost object in SAP. This will become a statistical object when you allocate the cost to other higher objects. Cost can be allocated to other cost centers or co objects but not fi objects like GL,assets, inventory etc. can be defaulted in transactions through cost element. It cannot be a cost object for a revenue element, revenues are always taken for other higher CO objects. No budget functionality is available but planning functionality is available and is always measured for a year in business.

    Internal order is the second CO object - which can be defined as statistical or real. You will be able to define Budget and planning figures - more than one year also. Can control the postings of FI through budget controls. You can have the report of Plan vs actual including commitment. Cost cannot be allocated but settled through settlement rules and profiles. The receiver of the values can be any object not like Cost center - can be CO objects and FI objects. Ideal for R&D expenses capitalizations, etc. Status profile is linked to this which controls many individual transactions in each status which is a part of this Internal order. It can also receive postings of activities from Cost center. Settlement profile is an wonderful tool for variety of settlement - needed for FI and CO - legal requirements also and Revenue requirements also for any country.

    All SAP CO orders like Production order, Plant maintenance order, etc will behave like Internal order with more functionalities.

    Internal Order (Definition as per CO): -

    An instrument used to monitor costs and, in some instances, the revenues of an organization.

    Internal orders can be used for the following purposes:

    Monitoring the costs of short-term jobs

    Monitoring the costs and revenues of a specific service

    Ongoing cost control

    Internal orders are divided into the following categories:

    Overhead orders - For short-term monitoring of the indirect costs arising from jobs. They can also be used for continuous monitoring of subareas of indirect costs. Overhead orders can collect plan and actual costs independently of organizational cost center structures and business processes, enabling continuous cost control in the enterprise.

    Investment orders - Monitor investment costs that can be capitalized and settled to fixed assets.

    Accrual orders - Monitor period-based accrual between expenses posted in Financial Accounting and accrual costs in Controlling.

    Orders with revenues - Monitor the costs and revenues arising from activities for partners outside the organization, or from activities not belonging to the core business of the organization.

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