Controlling Internal Orders

1. Controlling Internal Orders Controlling Internal Orders

2. Course Overview Objectives • Provide an overview of the CO module • Identify CO internal order/budget terminology and concepts • Understand the internal order/budgeting process • List the triggers for internal order/budget maintenance • Describe the various tools for processing internal orders/budgets • List and describe internal order/budgeting reports • Illustrate the integration between the CO and Funds Management modules • List the CO internal order roles and their authorized transaction codes Controlling Internal Orders

3. Definition Overview of Controlling (CO) Controlling (CO) represents the County’s flow of cost and revenue. It is also a management instrument for organizational decisions. Controlling facilitates coordination, monitoring and optimization of all processes in an organization. Controlling (CO) and Financial Accounting (FI) are independent components in the SAP R/3 system. However, the two components are tightly integrated and the data flow between the two components takes place on a regular basis. Controlling Internal Orders

4. General Ledger The “Top” book of financial records MM FI FI FI CO FI Accounts Payable Manages vendor invoices Accounts Receivable Manages customer billing Asset Accounting Manages fixed assets and depreciation Manages responsibility accounting Controlling Materials Management Manages purchasing/inventory management SAP Financial and Purchasing Components Controlling Internal Orders

5. ASSETS ACCOUNTS RECEIVABLE FUNDS MANAGEMENT GRANTS MANAGEMENT ACCOUNTS PAYABLE What Goes Where HR/Materials Management Modules Other Financial Modules FI Module PAYROLL CONTROLLING PURCHASING INVENTORY MANAGEMENT Controlling Internal Orders

6. Key CO Internal Order Terminology (Internal Orders): • Internal Order • Real • Statistical • Internal Order Group • Settlement • Closing Controlling Internal Orders

7. Debits Credits Order Balance Internal Order • Used to plan, collect, and settle the costs of internal jobs, tasks, or projects. • Examples: • New Law Center • Precinct One Benbrook Project • WIC Site 01 Bedford • etc. Controlling Internal Orders

8. Debits Credits Order Balance Internal Order (continued) • As internal orders are created, the following attributes are defined: • Order Type (ex: AUC* for Buildings, Public Health Services, etc.) • Short Text (up to 40 characters) • Company Code (will always be “TC01”) • Business Area (typically “1000” for Tarrant County) • Plant • Functional Area (ex: Health Care, Roads & Bridges, etc.) • Object Class (ex: Investment, Overhead, etc.) • Responsible Cost Center * AUC = Asset Under Construction; Controlling Internal Orders

9. Debits Credits Order Balance Statistical Internal Order (informational purposes only) • Used to evaluate costs that are to be separated from other costs in cost element or cost center accounting. • Statistical orders are not settled. • Overhead cannot be applied to a statistical order. • Example: A statistical order for each fleet vehicle Controlling Internal Orders

10. Debits Credits Order Balance Real Internal Order • Used for assets under construction (ex: buildings). • Costs charged to real orders are settled to assets under construction (AUC’s). • Overhead can be applied to a real order. • Examples: New law center Controlling Internal Orders

11. Internal Order Type (Code): Order Number Range: Real/Statistical Order: Public Health Services Internal Orders (ZPHS) 400000 – 499999 Statistical CDBG Internal Orders (ZCDB) 500000 – 599999 Statistical ROW Internal Orders 600000 – 699999 Statistical AUC for Software Development (ZASW) 910000 – 919999 Real Debits Credits Order Balance AUC for Buildings (ZABD) 920000 – 929999 Real AUC for Infrastructure (ZAIN) 930000 – 939999 Real More On Internal Orders Controlling Internal Orders

12. Internal Order Group • A hierarchical group of internal orders. • Examples: • ROW State/ROW County • CDBG Projects • AUC Law Building • etc. • After a internal order group is create, internal orders are assigned to that group. Controlling Internal Orders

13. Internal Order Group (continued) • As internal order groups are created, the following attributes are defined: • Internal Order Group Name (10 characters) • Description (up to 40 characters) Controlling Internal Orders

14. Internal Order Group (continued) Examples: = internal order group; = internal order; Controlling Internal Orders

15. Debits Credits Order Balance Settlement (real orders only) TWO TYPES: Automatic Settlement – carried out on a monthly basis as part of month end closing process. Full Settlement – carried out when a internal order (project) is completed. Controlling Internal Orders

16. Debits Credits Order Balance Closing (real orders only) • Use to lock an internal order from any further changes/updates. • Occurs after full settlement Controlling Internal Orders

17. Internal Orders/Groups Business Process 1. Create Internal Order 6. Close Internal Order (real orders only) 2.Create Internal Order Group 3. Assign Internal Order To Group 5. Settle Internal Order (real orders only) 4. Create Budget for Internal Order (if it has budget) Controlling Internal Orders

18. Process: Trigger: Output: Create an internal order (real) [KO04] Need to track, budget, collect, and settle the costs for an AUC project . A new internal order for AUC projects. Create an internal order (statistical) [KO04] Need to track, budget, and collect costs for a non-AUC project. A new internal order for non-AUC projects. Create an internal order group [KOH1] Business need for collective reporting/processing of internal orders. A new internal order group. Assign an internal order to a group [KOH2] Business need for internal order to be included in an internal order group. An internal order included in an internal order group. Process Triggers and Outputs (internal orders/groups) Controlling Internal Orders

19. Process: Trigger: Output: Create an internal order budget [KO22] An internal order which has budget. An internal order budget. Automatic settlement of an internal order [KO88] Month end processing. An internal order which is settled for the month. Full settlement of an internal order [KO88] A completed AUC project. A fully settled internal order. Close an internal order [KO02] An internal order for AUC project that has been settled. A closed internal order. Process Triggers and Outputs (internal orders/groups) Controlling Internal Orders

20. Debits Credits Order Balance 1. Creating Internal Orders OPTIONS: A. Manual Method (KO01) B. Order Manager Tool* (KO04) *The order manager tool allows you to see the existing internal orders as you are creating new orders. Controlling Internal Orders

21. Debits Credits Order Balance 1. Creating Internal Order (continued) A. Manual Method (KO01) Controlling Internal Orders

22. Debits Credits Order Balance 1. Creating Internal Orders (continued) B. Order Manager Tool (KO04) Controlling Internal Orders

23. Debits Credits Order Balance 1. Creating Internal Orders (continued) • REAL Orders: Note that the “Statistical order” checkbox is not selected for a real order. Controlling Internal Orders

24. Debits Credits Order Balance 1. Creating Internal Orders (continued) • REAL Orders: Creating an “asset under construction” (AUC) for a real order. Controlling Internal Orders

25. Debits Credits Order Balance 1. Creating Internal Orders (continued) • REAL Orders – Creating AUC: Note: Additional description, serial number, and “capitalized on” date can be added on the General tab. Controlling Internal Orders

26. Debits Credits Order Balance 1. Creating Internal Orders (continued) • REAL Orders – Creating AUC: Note: Same cost center entered earlier will be entered in the “Resp. Cost center” field on the Time-dependent tab. Controlling Internal Orders

27. Debits Credits Order Balance 1. Creating Internal Orders (continued) • REAL Orders – Creating AUC: Note: If needed, the depreciation fields can be overwritten on the Deprec area tab. Next, you would use the button to return to the Order Manager screen. Controlling Internal Orders

28. Debits Credits Order Balance 1. Creating Internal Orders (continued) • REAL Orders – Creating AUC: Note: After completing the setup of the AUC, you would choose the button to save the real order. Controlling Internal Orders

29. Debits Credits Order Balance 1B. Creating Internal Orders (continued) • STATISTICAL Orders: Note that the “Statistical order” checkbox is selected. Controlling Internal Orders

30. 2. Creating An Internal Order Group • Create Order Group (KOH1) Controlling Internal Orders

31. 3. Assign Internal Order to Group OPTIONS: A. Assignment during creation of order group (KOH1) B. Assignment after an order group has been created (KOH2) Controlling Internal Orders

32. 3. Assign Internal Order to Group (continued) A. During creation of order group (KOH1): = used to assign/add an internal order to the group. = used to search for the desired internal order number. Controlling Internal Orders

33. 3. Assign Internal Order to Group (continued) B. After an order group has been created (KOH2): = used to search for the desired internal order number to be assigned. Controlling Internal Orders

34. Budget: New Law Center Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 Key CO Budgeting Terminology (Internal Orders): • Current Budget – current value of budget including any additions (supplements) and subtractions (returns) [see formula below]. • Original Budget – original value of budget for project. • Budget Supplement – additions to original value of budget. • Budget Return – subtractions from original value of budget. CURRENT BUDGET = ORIGINAL BUDGET + SUPPLEMENTS - RETURNS Controlling Internal Orders

35. Budget: New Law Center Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 4. Create Budget for Internal Order (if applicable) TWO TYPES OF BUDGET SETUP: • Assets Under Construction – Enter an overall budget amount and yearly budget amounts. • Non-Assets Under Construction – Enter just an overall amount. Controlling Internal Orders

36. Budget: New Law Center Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 4A. Create Budget for Internal Order [ASSETS UNDER CONSTRUCTION] Change Original Budget (KO22) Note: Both overall and annual budget amount(s) are entered. Controlling Internal Orders

37. Budget: New Law Center Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 4B. Create Budget for Internal Order [NON-ASSETS UNDER CONSTRUCTION] Change Original Budget (KO22) Note: Only an overall budget amount is entered. Controlling Internal Orders

38. Budget: New Law Center Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 4C. Other Budget-Related Transaction Codes • Display Original Budget (KO23) • Change Budget Supplement (KO24) • Display Budget Supplement (KO25) • Change Budget Return (KO26) • Display Budget Return (KO27) • Change Budgeting Document (KO2A) [to edit text for budget docs] • Display Budgeting Document (KO2B) [to view text for budget docs] Controlling Internal Orders

39. Budget: New Law Center Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 • Settling An Order • (real orders only) TWO TYPES OF SETTLEMENT: • Automatic Settlement – carried out on a monthly basis as part of month end closing process. • Full Settlement – carried out when a internal order (project) is completed. Controlling Internal Orders

40. Debits Credits Order Balance 5A. Automatic Settlement of An Order [done monthly] Settle Costs From Order (KO88) Notes: Remove “Test Run” indicator and reexecute after successful test run. Controlling Internal Orders

41. Debits Credits Order Balance 5B. Full Settlement of An Order [done after project is complete] Settle Costs From Order (KO88) Note: Remove “Test Run” indicator and reexecute after successful test run. Controlling Internal Orders

42. Debits Credits Order Balance 5C. Collective Settlement of Orders Collective Settlement of Costs From Orders (KO8G) Note: With collective settlement, a variant (ex: INTORDERS) can be used to select/settle multiple orders. Controlling Internal Orders

43. Debits Credits Order Balance • Closing An Order • (Real Orders Only) Close Internal Order (KO02) - used to close an internal order. Controlling Internal Orders

44. Internal Order Reports • Display Actual Line Items for Internal Orders (KOB1) • Display Commitment Line Items for Internal Orders (KOB2) • Display Budget Line Items for Internal Orders (KOB4) • Display Actual Costs (KSB5) • Display Budget Document (KO2B) • Display Budget/Actual/Commitments (S_ALR_87013019) • Display Cost Centers Commitment Line Items (KSB2) Controlling Internal Orders

45. Internal Order Reports (continued) Display Actual Line Items for Internal Orders (KOB1) - used to view document for selected line item. - used to view details for selected cost element. Note: The other “Display Line Item” reports (KOB2, KOB3) look identical to the above report. Controlling Internal Orders

46. Internal Order Reports (continued) Display Actual Costs (KSB5) - used to view document for selected line item. - used to view details for selected cost element. Controlling Internal Orders

47. Internal Order Reports (continued) Display Budget Document (KO2B) - used to view any long text for the budget document. Controlling Internal Orders

48. Internal Order Reports (continued) Display Budget/Actual/Commitments (S_ALR_87013019) Controlling Internal Orders

49. Internal Order Reports (continued) Display Cost Centers Commitment Line Items (KSB2) - used to view document for selected line item. - used to view details for selected cost element. Controlling Internal Orders

50. Internal Order Integration With Funds Management (set up in Funds Mgmt) Controlling (Managerial Reporting) Funds Management (Budget Control) Funds center #1 Fund ABC Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 Funds center #1 Fund ABC Commitment Actual Budget Salaries $60,000 $70,000 Operating 15,000 25,000 Total 75,000 95,000 Cost Objects Internal Order #6 Budget control is at the combination of the fund/funds center/ commitment item/functional area Internal Order #7 Cost element Actual Plan Wages $10,000 $11,000 Overtime 3,000 4,000 Travel 6,000 6,000 Utilities 4,000 3,000 Total 23,000 24,000 Funds center #2 Fund DEF Commitment Actual Budget Salaries $40,000 $50,000 Operating 15,000 35,000 Total 55,000 85,000 Note: There is a one to one relationship of cost objects to funds centers Controlling Internal Orders