Run Distribution and Assessment cycle together
At my company which is (Constructions) the management needs to allocate the Overhead expenses over the Projects.
the structure as following:
- we have 4 company codes 1000, 2000, 3000 and 4000
- The first Comp. Code 1000 is the main center which we use it for paying all the General and overhead expenses which to be distributed at end of each year over the remaining comp. codes 2000, 3000 and 4000 and accordingly to close all of its expediters to ZERO.
- Then we have major Business Areas under each company code defined as Plants under each company code, each of these Plants has its own expenses and it carries a part of the expenses occurred at the company code above it.
- Then under each Business Segment which is defined as Plant we have Projects which has its own expenses and carries part of expenses from the Plant (business segment) above it.
we have three levels of Distributions:
Level one: Costs on different Cost Centers on Company Code 1000 to be distributed over Cost Centers related to the three other company codes.
Level Two: Costs of Cost Centers from Company Codes 2000, 3000 and 4000 Plus costs received from Cost Centers from Level one to be Allocated over Business Segment which are defined as Plants.
Level Three: costs of each Plant plus the costs which they received from above cost centers to be allocated over the Projects.
1. Can I use the Distribution Cycle to allocate costs from level one over level two in order to close all of expenses on company code 1000. Then to use Assessment Cycle between Level 2 and 3 and then over Projects?
2. If I can use Assessment Cycle to allocate costs from level 3 over the Projects, can it be posted to WBSs?
3. Is defining the business sectors as Plants correct or wrong, if it is wrong what is the correct object to be used (Segment, Business Area or what) ?
thanks in advance;
Mukthar Ali Ahamed N replied
1. Yes you can use distribution cycle and assessment cycle for distribution of costs. But you have to transfer the costs to WBS elements not to project. Because project is not a cost object.
2. You have to transfer it to WBS only
3. You can use Business area as business sectors. Because you can link the plant to BA in OMJ7. So your business area and plant would be the same.