Posting in cost center

[Former Member]

Hello,

I make a GL(G1) as cost element this is linked to cost center(C1).

Now at the time of generating invoice in FB60,

I took GL line item as:

GL account number- G1

At this line item,can i pick another cost center(C2).

Is it the right way???????

Thanks.

[former_member182098 · Accepted solution]

Hello,

The user entries in FB60 will always prevail over the settings made in Cost Element. Please note you normally do not assign any cost center to a cost element (KA02) unless there is a strong business case. Otherwise, all the similar expenses get posted to the same cost center.

You can still pick up another cost center. (Overwrite) in FB60 at the time posting.

Regards,

Ravi

[Former Member · Accepted solution]

Hello,

At the time of creating cost element,there is tab "Default account assignment."

what does it mean?cann't we assign there cost center to the cost element?

Thanks.

[Former Member · Accepted solution]

Hi Pari,

We can assign a cost center there. However, if you mention a different cost center in the line item of the document in FB60, the cost center from the line item will prevail over the default cost center assigned in the cost element master.

In case you do not mention any cost center in the line item of the document (FB60), the default cost cnter from the cost element master will get populated in the document.

Regards,

Mike

Edited by: Michael Gerard Leo on May 5, 2009 4:50 PM

[former_member182098 · Accepted solution]

Hello,

You can also assign in OKB9.

It is not required to enter a cost center to a cost element. Otherwise all the costs will be booked to same cost element, in case if the user ignores to overwrite the cost center. Then, there is no point in having controlling module. It becomes like one cost elments costs booked for a cost center. this is not recommended.

You only assign them where your business case recommends. For example certain expenses incurr only in a particular cost center, only in such cases you assign the cost center to a cost element, otherwise not.

Regards,

Ravi

[Former Member · Accepted solution]

Thanks Ravi....

In our company we are creating cost center project wise.category of the projects are like:RnD,customer and academic projects.

For eg. In RnD we are having further division eg. E-Gov., Data center and quality improvement etc.

In E-Gov,there is lot of projects.so E-gov treated as cost center group and different project under this are cost centers belongs to this cost center group.

Here i creat a GL(TA expense) as cost element(G1) for a general cost center(C1).

Now i want to debit this TA expense in an employee treated as vendor belong to project as cost center(C2).At this time can i pick this cost center(C2) in GL account line item.

I dnt know is it right way or not.I am asking can we do this or not. Is there any other alternate for this??

Thanks

[Former Member · Accepted solution]

Hello,

Waiting for response.

Thanks.

[former_member182098 · Accepted solution]

Hello,

Projects are for different purposes.

You can create settlement rules on the projects and settlement to the cost centers. You can create strategy to create automatic settlement rules.

Need not necessarily you should have similar structure in cost center similarly like projects. Your cost centers hierarchy may have different structure altogether.

I do not recommend to assign any cost centers by default to cost elements.

Cost elements are not limited for particular cost centers, but may incur in any of the cost center.

If you have specific question, please let me know.

Regards,

Ravi

[Former Member · Accepted solution]

Thanks Ravi...

The issue related to cost element is clear to me.If i'll face any further problem,i ask u.

But if i want to take cost center as project wise. Can i take this??

[former_member182098 · Accepted solution]

Hi,

Personally my answer is NO.

The structure of the projects are different. For Projects you will have WBS elements, networks etc. Those are for a different purpose altogether. In most of the standard implementations nobody take projects and cost centers similar.

Each project will have its own activities. It is also NOT required that you should create new cost centers once you have started with new project.

As explained by you, the business structure, incidentally, both cost center structures and projects structure are matching. But, it is not a rigid rule that you should go and create the same structure like projects.

Ultimately, it is the business decision, how they want to map. How they would like to see the reports. Therefore, I would suggest you have a discussion with the business people. These issues must have been addressed at the time of blue print discussions.

Regards,

Ravi

[Former Member · Accepted solution]

This message was moderated.

[former_member182098 · Accepted solution]

Hello,

Project will have a project (it is for a temporary period)

Will have WBS elements

Such as Civil

Electrical

Mechanical

Structural

Erection etc.

Under each WBS element, you will have further networks.

Civil pillers,

Civil beams

like so on so forth for all wbs elements.

Whereas, when it comes to a Standard Hierarchy of Cost center you can go up to 10 sub nodes.

Let us take example of chemical company.

ABCC (ABC Chemical Company)

Soda Ash

Salt

Fertilizer

HCL (Hydrochoric Plant)

Cement

Administration

These are topper nodes, under each node you can create sub nodes. Under the last sub node you create cost center. Though technically 10 sub nodes are possible, I would not suggest you to go beyond 4 to 5 level, otherwise, the structure will become more complex and reporting looks clumsy.

Regards,

Ravi

[Former Member]

Dear,

No issue, You can.. But that particular cost center belongs to which one, that's depend upon your client requirement. This will be the Transactional data, But before you are assigning the C1 to G1, you have to check. is it right or not???

regards,

Dharma Rao. Yekula

[Former Member]

Dear Pari,

When you create a GL profit account on FS00 transaction and afterwards you create the related cost element, (tx KA01 or through tx. fs00) the entry you set on field "Purposed Cost Center" means only a default value that the system will populate to every new line item this GL account it is entered.

But it is only a purposed entry and you can set a different entry. Only if the posting document has been completely posted will the system not allow you to modify it.

I hope this information helps. Regards,

LiFeRo