Client Name

S4H– Business Blueprint Document

Controlling
BBP_CO_XX: Internal Order (BPML)

Prepared by: Mazars

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 DOCUMENT INFORMATION

Document Category Process Definition Document

Document Title

Team

Created By

Project Management Approval Yes / No

Business User Approval Yes / No

Document Status Draft / Released for vetting / Final / Approved

Document Control

REVISION HISTORY

Version Date Author Status

0.1

TARGET READERS
Project Core Team
Business Process Owners
Project Management Office

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BUSINESS BLUEPRINT

The SAP Blueprint is a detailed description of a company's business processes and system requirements. It is a key
implementation document. The SAP Blueprint document shows all the important steps to be mapped to company
needs. In other words, SAP Blueprint is the architectural foundation for the success of a project.

Contents
1. INTRODUCTION 5
2. PROCESS AND REQUIREMENT 5
2.1 CONTROLLING AREA 5
2.2 ORDER TYPE 6
2.3 INTERNAL ORDERS 7
2.4 ORDER SETTLEMENT 8
2.5 INVESTMENT ORDER (IO) 9

1. INTRODUCTION

An Internal Order is a self-contained mini project cost object, i.e. it's a collection of costs, but not a full
project with WBS and network relationships. The Internal Order should settle to Fixed Asset, Project, Cost
and/or Profit Centers at the accounting period (month) end.

In other words, Internal orders are normally used to plan, budget, collect, and settle the costs of internal jobs
and tasks. The SAP system enables you to monitor your internal orders throughout their entire life cycle - from
initial creation, posting of all the actual costs, to the final settlement.

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 Similarly, Investment orders are used to capture the costs of AUC during the construction phase. This way, budget
information can be entered for the AUC and tracking of the actual-to-budget can be performed. Once the AUC is
completed, the final asset is created in the appropriate asset class, and the investment order is set to 'complete'
so that the next settlement will transfer the AUC asset value to the completed asset.

2. PROCESS AND REQUIREMENT

Tracing of expenses wrt testing of a new equipment and then buying the same if it passes the test parameters.
All the expenses, right from testing to finally buying the machinery will be booked under an real Internal Order
and the amount will be settled to an Asset. In other words, monitor internal jobs which are settled to fixed
assets (investment orders).

Requirement

Key Assumptions
S No. Description
1 It is required to get information account wise for every internal order
2 It gives plan Vs actual report for each project

Key Dependencies
S No. Description
1 An order type, created for Investment Orders to capture project specific expenses

2.1 CONTROLLING AREA

The Controlling Area is the business unit where Cost Accounting is carried out. The Company Code allocated to
the Controlling area must use the same operating chart of accounts and the same fiscal year variant.
Each controlling area has a unique standard hierarchy; the highest node is created when maintaining the
Structure. To the standard hierarchy of cost centres are attached all the cost centres created for a Company
code.

A controlling area may include single or multiple company codes that may use different currencies. Cross-
Company Code cost accounting is possible if all the companies use same Chart of Account and same Fiscal year
variant.

2.2 ORDER TYPE

The order type contains a range of parameters which affect the way the order is processed.
For example, using the order type, you can specify

 The number ranges to be used for the orders

 Which criteria are used when selecting a routing
 How the order is to be costed

An Order type comprises of the following:

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 Settlement Profile

A settlement profile mainly comprises of the following:

 Actual Cost
 Default Values
o Allocation Structure
o PA transfer Structure
 Indicators
 Valid Receiver
 Other Parameters

Allocation Structure

A tool that allocates the costs incurred on a sender by cost element or cost element group. The allocation
structure is used for settlement and for assessment. It mainly comprises of the following:
 Source – Sender Cost Elements
 Settlement Cost Element – Receiver Category

PA transfer structure

PA transfer structure is used when, in an FI document, the cost object is a profitability segment.

 Commitment Management √ (checkbox).

In controlling area, under activate components; you need to activate Commitment Management.

You prepare budget, of Rs 10,000/-. We will commit that we will use this budget for this year. We make a lock.

Commitment Management in SAP tracks future commitments against cost objects; this enables users to make a
realistic comparison of actual cost-plus committed cost against plan / budget on that cost object.
Commitments are made when user creates purchasing documents to purchase goods or services at a future
date. Comparing actual against budget is misleading unless you factor in the outstanding commitments that will
convert to actual cost in the future.

 Budget Profile – OKOB tcode

The budget/planning profile brings together all the control parameters for planning or budgeting.

It has, Time Frame –

o Past – Value which specifies how far into the past you can plan/budget for. Example – The start year is
2019 and the value entered here is 1.  You can thus plan/budget as far back as 2018 inclusive.
o Future – Value which specifies how far into the future you can plan/budget for Example – The start
year is 2019 and the value entered here is 3.  You can thus plan/budget for the years up to and
including 2022 inclusive.

Hence, as per the above examples it will range from 2018 to 2022 where 2019 is current year.

o In budget profile we have budget lock. It means:

 If 80% of the budget is utilized, system will give Information msg.
 If 90% of the budget is utilized, system will give Warning msg.
 If more than 100% of budget is utilized, system will give Error msg.

This is a by default setting in system.

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 2.3 INTERNAL ORDERS
An internal order is used to accumulate cost for a specific project or task for a specific time period. An internal
order is therefore used for a short period with a specific deadline. Your internal order (Real) will usually settle to
Cost Centers (and not vice versa) according to the settlement rule in the order setup. 
It can be used for Internal as well as External purposes.

Internal order can be of two types:

Statistical Order Real Order

1. Settlement Rules are not defined.
2. In Posting, you will post to the Cost Center and the
Internal Order simultaneously. Both need to be specified
when posting journals (FB50).
3. These are not settled
4. You immediately see the costs in the order (statistical,
for information purposes only) and the cost center (real
costs).
5. Allocation Structure is not needed.
6. Settlement Profile is not needed.
1. Settlement Rules will be defined to Settle Cost to Cost
Centers.
2. In Posting, you will post only to Internal order.
3. These needs to be settled.
4. Cumulative cost can be seen in Internal order. Once
settlement is done, it can be seen in Cost Centers too.
5. Allocation Structure is needed.
6. Settlement Profile is needed.

2.4 ORDER SETTLEMENT

Settlement is nothing but you are settling the variances of a process order. The variance is nothing but the
difference between the planned and actual values of raw materials, activities etc. The difference will be settled
to the production variance accounts.

The prerequisite for Process Order Settlement is the Process order should have the status REL and DLV.

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 SAP Manual

2.5 INVESTMENT ORDER (IO)

Higher Authority
Confirmation

N
I/O Report

Consideration I/O Creation

Expense Posting I/O Settlement

Budget
Allocation / Adjustment

N
Y
Budget I/O Expense
Request for Check Posted
I/O Plan and
Budget

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