Relationship between Internal Order, Cost Center and GL

[Former Member]

Hi, I'm doing MM but I want to get clear picture on relationship between Internal order, cost center and GL account.

1.How the system recognize this 3 item having the right combination.

2.I have found the following error when I try to generate IV for my blanket PO. What does it mean?

"Wrong Internal Order used with expense GL and cost centre combination"

[Former Member]

Hi

Cost Elements describe the origin of costs.

From the Cost Controlling point of view , circular system exists because the expense and revenue accounts in Financial Accounting correspond to Primary Cost and Revenue Elements in Controlling , and because postings in FI are passed on in real time to Cost and Revenue Element Accounting.

Cost centers are the locations at which costs are incurred. Cost Centers represent the areas of responsibility that generate and influence costs.we can setup Cost Centers based on the functional requirements , distribution criteria , activities provided , geographical factors and/or areas of responsibility.

Internal Orders describe the individual jobs with in a Controlling Area.this will be used to know vehicle wise cost , telephone cost and production order wise cost.

Internal Orders are of 2 types

Real Orders -

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>Further Settlement is possible. you use Real Orders to collect costs and distribute them later to different cost centers or other objects.

Statistical Orders -

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>only for Information/Decision making. you use Statistical Orders to evaluate costs that cannot be itemized in detail in Cost Element accounting or Cost Center Accounting.you achieve this by assigning costs to both the statistical order and the responsible cost center, which directly displays the costs on the Order and the Cost Center.

In the G/L account you will be assigning the Field Status Group in Create/Bank/Interest Tab.

In OBC4 -

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>Maintain Field Status Variant , that Field Status Group assigned in the G/L Account and make the Cost Center and CO/PP Order Reuired Entries.

When you do postings to the Expense G/L Account in FI , both Cost Center and Internal Order will be updated.

Create Cost Element -

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>KA01

Create Cost Center -

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>KS01

Create Internal Order -

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>KO01

This might help you understand How the system recognize this 3 item having the right combination.

I think the Internal Oder which you are assigning while posting is not a statistical oder iey you are getting that order.

Regards

Venkat

[Former Member]

Thanks for your explaination Venkat...excellent explaination. Tqvm

But I have another question regard to account assignment impact on this 3 item. If I choose account assignment K in PO can I default the GL account value by just entering the Internal Order number and Cost Center Number only.

thanks

Suji

[Former Member]

Thanks for your explaination Venkat...excellent explaination. Tqvm

But I have another question regard to account assignment impact on this 3 item. If I choose account assignment K in PO can I default the GL account value by just entering the Internal Order number and Cost Center Number only.

thanks

Suji

[Former Member]

Thanks for your explaination Venkat...excellent explaination. Tqvm

But I have another question regard to account assignment impact on this 3 item. If I choose account assignment K in PO can I default the GL account value by just entering the Internal Order number and Cost Center Number only.

thanks

Suji

[Former Member]

Hello,

A G/L account can be created as a cost element only if it is a P&L account. let it assume that you have a cost element, while making entry for this G/L in FI you need to specify a cost object, that may be cost center or internal order or wbs element or profit center etc., when it comes to link between order and cost center.

Ex:1 - You have Internal Order X ( real ) and Cost center Y

While making entry in FI you entered both order x and cc y for a line item, in this case order is a real object and cost center is a statistical object, first priority is given to the order only,in the cost center line item display you will notice this statistical values.

Ex:2 - You have Internal Order X ( statistical) and Cost center Y

While making entry in FI you entered both order x and cc y for a line item, in this case cost center is a real object and order is a statistical object,in the order line item display you will notice this statistical values. if you enter default cost center in the order master, it will be the receiver in the order settlement.

Thanks

Para