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Cost Accounting – CO

Cost Accounting – CO


Cost Accounting and Control (CO) application component of ERP performs all accounting functions needed for an efficient control. If the processes in a business are divided into internal and external accounting categories, CO represents the external category since it offers those who are in charge of managing and controlling the operations of the business the information they need.


Financial Accounting and Control offers you all the information required to take administrative decisions. It makes the coordination, audition and optimization of all the processes in an organization easier. This requires recording of all production input and service usages of an organization.


Besides reporting all the events, the main task of financial accounting module is the planning. Variation planning can be performed by comparing the actuals and plans and this makes the control of work flows possible.


Cost accounting and Financial accounting are two independent components inside SAP system. Since there is a steady data flow between these two components, all suitable data is automatically transferred from Financial accounting into cost accounting. At the same time, these are also assigned to various accounting assignment objects such as system coots and incomes, cost centres, work flows, projects and orders. Suitable accounts in Financial Accounting (FI) are managed as types of costs and incomes in Cost Accounting (CO).


Cost accounting module consists of main components such as General Expenses Control (CO-OM), Product Pricing (CO-PC), Profit Centre Accounting (EC-PCA) and Profitability Analysis (CO-PA). Details regarding the components are indicated below:


General Expenses Control (CO-OM)

General Expenses control component makes the planning, sharing, control and monitoring of general actual expenses possible. It is an important preparation phase for the profitability analysis besides pricing products in an accurate way.


By planning your general business expenses, you can identify standards to control your expenses and evaluate your internal activities.


Product Pricing (CO-PC)

This is a sub-module that enables the distribution of direct labour, direct material and general production expenses throughout the production process over the products, where planned and actual product costs are calculated and monitored on desired breakdown. Actual costs that formed at the end of the term are sent to the financial accounting via CO-PC. It covers all production scenarios such as job shop production, serial production and stock production.


Expense and Revenue Type Accounting (CO-CEL)

This provides a general view of the costs and revenues actualized at your business. Most of the values flows from Cost Accounting (CO) from the Financial Accounting automatically. Expense and Revenue Type Accounting is a sub-module that details which costs and revenues are actualized. Cost Centre Accounting defines where the costs at your business emerge. To achieve this, the costs are allocated on the basis of sub-areas that they affect your business most.


You acquire information about the other application components besides making the cost accounting possible by forming the types of costs and assigning these. SAP ERP system offers many different methods for assigning these added costs to cost centres or other cost accounting objects.


Cost Centre Accounting (CO-OM-CCA)

You can use the Cost Centre Accounting for the purposes of controlling the costs that emerge at your business. And this makes it possible to control the profitability of each functional area within the organization and provides determinative information for administration.


Dividing the cost centres in an organization and assigning costs to cost centres enable you to know where the costs emerge within the organization. If you plan your costs at the level of cost centres, you can control the cost efficiency based on the points where the costs emerge. And this makes the assessment of bulk products and products in Product Pricing (CO-PC) and calculation of contributions on profits in Profitability Analysis (CO-PA) possible.


Internal Orders (CO-OM-OPA)

Internal orders are used for the planning, registration and analysis of the costs that emerge from the internal activities. Independent from the structure of Cost Centre, internal orders makes constant control of the planned and actualized costs possible by adding these. Internal orders can be used for the purposes of controlling a cost centre in details. This component enables the analysis of costs in a different and more detailed way unlike Cost Centre Accounting for administrative purposes. SAP system enables the monitoring of the internal orders within the body of the organization during their whole life cycle from their origin to archiving.

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