With SAP Simple Finance, the universal journal includes a single field account that covers both the general ledger (G/L) account and the cost element. As companies migrate to SAP Simple Finance, the system merges their existing G/L accounts and cost elements. The transactions for the creation and maintenance of cost elements become obsolete, replaced by a single transaction for account maintenance. However, this technical change does not mean that the idea of a cost element has disappeared with SAP Simple Finance. Learn what changes come with SAP Simple Finance and what remains as before.
By reading this article you’ll learn
- The basics you need to design your chart of accounts in the context of SAP Simple Finance
- What will happen to your existing cost elements as you migrate to SAP Simple Finance
- How the fields shown in the classic reports differ from those shown in the new reports using the example of a trial balance
The cost element design is a key part of setting up your controlling (CO) system. In SAP Simple Finance, as the accounts and cost elements are merged, the following changes result:
- The primary cost elements represent the profit-and-loss accounts used to classify your journal entries. In all accounting approaches you use cost elements to represent wages and salaries, material expenses, depreciation, and so on. If you use account-based profitability analysis (CO-PA) or if you have make-to-order processes requiring results analysis and settlement, you also use cost elements for revenues, sales deductions, and so on. In SAP Simple Finance, the G/L account and the primary cost elements merge into one.
- The secondary cost elements record the value flows within CO, such as the charging of utility costs from a support cost center to an operational cost center, the charging of machine hours to a production order, the charging of consulting time to a Work Breakdown Structure (WBS) element, or the settlement of research and development costs to CO-PA. In SAP Simple Finance, accounts are created for every secondary cost element so that all value flows are visible in the universal journal and thus in reports such as the trial balance.
A Controlling (CO) implementation typically starts with the decision regarding which profit-and-loss (P&L) accounts require primary cost elements and which don’t. There are typically a handful of P&L accounts that do not need to be reflected in CO—either because they have no impact on the operational business or are needed for a special purpose, such as recording work in process (WIP). However, for the majority of P&L accounts, the implementation team creates a separate primary cost element for each account and makes sure that the correct CO account assignment can be updated as each journal entry is posted, capturing salary postings by cost center, material expense postings by Work Breakdown Structure (WBS) element, and so on.
All this changes with SAP Simple Finance, where the accounts and cost elements merge and the master data settings for the cost elements become part of the general ledger (G/L) account master. This means that where you used to create primary cost elements using transaction code KA01, you now are directed to transaction code FS00 (Display G/L Account Centrally). While this all sounds quite radical, the fundamental nature of the account does not change and you continue to use the field status groups to control which account assignments are valid for each business transaction as before.
The merge of accounts and cost elements does have an impact on your authorization profiles. You can create accounts with no CO impact if you have authorization for G/L account maintenance (these are typically given by account, company code, and account type). However, if you want to create an account that is simultaneously a cost element, you need authorization for both the G/L account and the cost element (authorization object K_CSKB). The combination also means that you need to keep the period locks in sync and make sure that the account types that allow postings match the CO business transactions that allow postings at any given time.
Setting Up Your Accounts in SAP Simple Finance
Figure 1 shows the account master data in SAP Simple Finance (transaction code FS00), which is a combination of the account maintenance and the former cost element maintenance transactions (transaction code KA01-3).
G/L account showing the account type for the primary cost element
The main change to this screen is that you can choose between P&L accounts that do not require a cost assignment by selecting the account type Nonoperating Expense or Income and P&L accounts that are associated with a CO account assignment by selecting the Account Type Primary Costs or Revenue.
In my example, you have a raw material expense account and any raw material posting to this account needs to be assigned to a CO account, such as a cost center, order, or WBS element. If you are migrating, your field status groups will already be set up to include these CO account assignments.
As you go through the screens, notice that the old Default Assignment tab in the cost element master record is gone, so the only way to set up the default account assignments is to use transaction code OKB9 or follow IMG menu path Controlling > Cost Center Accounting > Actual Postings > Manual Actual Postings > Edit Account Assignment. If you have entered default account assignments in your cost element master data, the migration process creates entries in table TKA3A for these default assignments. You can check them using transaction code OKB9.