Finance – Cost Center

Accounting
Phase II Business
Blueprint

Project Reliance Digital– Business

Blueprint
BBP-FI-CC-000: Cost Center
Accounting

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 Finance – Cost Center
Accounting
Phase II Business
Blueprint

Revision History
Created Niranjan Emparala Created 13/11/2017
By: Date:
1st Review Project Manager 1st Review
By: Date:
2nd Review Key User 2nd Review
By: Date:
3rd Review 3rd Review
By: Date:
Approved Approval
By: Date:

<Client> Process Owner Sign-off

Name: D Subramanyam

Position: Process Owner

Sign-off
Date:
Signature:

<Client name> Team Leader Sign-off

Name: IT Project Manager

Position:

Sign-off
Date:
Signature:

Reliance digTeam Leader Sign-off

Name:

Position: Project Manager

Sign-off
Date:
Signature:

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Accounting
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Table of Contents
1. SCENARIO OVERVIEW................................................................................................................4
2. REQUIREMENTS/EXPECTATIONS...........................................................................................6
3. SAP ORGANIZATION STRUCTURE..........................................................................................6
4. BUSINESS PROCESS......................................................................................................................6
5. CHANGES TO EXISTING ORGANIZATION...........................................................................17
6. KEY BUSINESS IMPROVEMENTS...........................................................................................17
7. DESCRIPTION OF FUNCTIONAL DEFECTS.........................................................................17
8. NOTES ON FURTHER IMPROVEMENTS...............................................................................17
9. SYSTEM CONFIGURATION CONSIDERATIONS.................................................................17
10. DEVELOPMENTS CONSIDERATION......................................................................................17
10.1 DATA CONVERSION CONSIDERATIONS..............................................................................................17
10.2 INTERFACE CONSIDERATIONS............................................................................................................17
10.3 REPORTING CONSIDERATIONS............................................................................................................18
10.4 FORM CONSIDERATIONS.....................................................................................................................18
10.5 ENHANCEMENT CONSIDERATIONS.....................................................................................................18
11. Authorization Considerations............................................................................................................18

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Accounting
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1. Scenario Overview

BUSINESS PROCESSES IN CONTROLLING

Currently, Reliance digis having Cost centre accounting process. But we are in
requirement of cost centre accounting for our costing process and reporting.

We are expecting Cost centers for each Store in Reliance digapart from this we have DC and
corporate office also as cost centers

General Explanations
Cost centre is the area of responsibility where costs are incurred. Cost centre represents
one of the small units of responsibility within an organization structure. In cost centre
accounting, operational expenses are captured by cost objects like cost centres. Cost
centres are maintained within a hierarchy, which is a representative of the
implementing company’s internal reporting.

 Cost centres can plan future costs to have a basis for comparison with actual costs.
 This provides a means of measuring the cost centres performance in controlling
costs.
 If Profit centres are active in FI, each cost centre must be assigned a profit centre.
 Cost centres can be planned and/or budgeted.

Generally we can divide the cost centers into two types i.e. production cost centers and
service cost centers. Production cost centers would be tied to work centers so as to use
the activity types where as service cost centers will capture the indirect overheads.

A cost centre is an organizational unit within a controlling area that represents a clearly
delimited location where costs occur.

Cost centres are used in conjunction with cost elements to capture actual and planned
costs based on the organizational structure. Cost centre reporting is driven by
hierarchical relationships known as Cost Centre Groups.

Cost centres are linked to profit centres in a many to one or a one on one relationship
such to allow for profit and loss reporting at the profit centre level.

Each department in the organization which is a cost incurring unit is created as cost
centre to record the department wise cost incurred.

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Activity types describe a production or service activity provided to or by a cost centre for
use in internal cost allocations.

Activities performed in each department are created as activity types (Labour and
Machine cost). Separate activities are created for each production cost centre. Unit of
measure of activity type would be based on the basis of allocation of cost of each
activity to be produced /processed through that cost centre.

CREATE COSTCENTRE AND COST CENTRE GROUP

Event

A New Cost Centre

is required

Is New
Cost
Create Cost Centre Create Cost Save the
Centre Group Yes transaction End Process
Centre Group
Neede
Cost Accountant

d?

Maintain Cost Update Cost

Centre No Centre
Hierarchy Group/s

2. Requirements/Expectations

Cost to be captured at each department level store level, DC Level

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Accounting
Phase II Business
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3. SAP Organization Structure

4. BUSINESS PROCESS

FI_CC_01: COST CENTER CREATION

The Cost Centre is used to collect costs and is distinguished by area of responsibility or
accounting method.
A Cost Centre master record must contain the following information: basic data, a long
text description, and classic system data entries made in the Address and
Communications dialog boxes.

Use the Transactions KS01, KS02 and KS03 for Create, Change and Display Cost Centre
Master data. A Cost Centre is created at the request of the party responsible for the
Cost Centre. The reason for such a request could be a change in management reporting
requirements.

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Below are the cost centers for Reliance dig

C.C CC
S.No Cost Center Name
Code Group
1 1000 CORPORATE 1000
2 AP01 DC-ANDHRA PREDESH AP
3 A001 AMALAPURAM AP
4 A002 AMALAPURAM-2 AP
5 A003 ANAKAPALLI AP
6 A004 ANANTAPUR AP
7 A005 ANANTHAPUR-2 AP
8 A006 ANANTHAPUR-3 AP
9 A007 BAPATLA AP
10 A008 BHIMAVARAM AP
11 A009 BHIMAVARAM-2 AP
12 A010 CHILAKURIPET AP
13 A011 CHIRALA AP
14 A012 CUDDAPAH AP
15 A013 CUDDAPAH-2 AP
16 A014 DABAGARDEN-2 AP
17 A015 DABAGARDENS AP
18 A016 DABAGARDENS-3 AP
19 A017 DHARMAVARM AP
20 A018 DIAMOND PARK AP
21 A019 ELURU AP
22 A020 ELURU2 AP
23 A021 GAJUWAKA AP
24 A022 GAJUWAKA-2 AP
25 A023 GOPALAPATNAM AP
26 A024 GOPALAPATNAM-2 AP
27 A025 GUDIVADA AP
28 A026 GUDIVADA-2 AP
29 A027 GUDUR AP
30 A028 GUNTAKAL AP

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31 A029 GUNTUR-1 AP
32 A030 GUNTUR-3 AP
33 A031 GUNTUR-4 AP
34 A032 GUNTUR-5 AP
35 A033 GUNTUR-6 AP
36 A034 GUNTUR-II AP
37 A035 HANUMANJUNCTION AP
38 A036 HINDUPUR AP
39 A037 JAGGAIAHPET AP
40 A038 JANGAREDDYGUDEM AP
41 A039 KADIRI AP
42 A040 KAKINADA AP
43 A041 KAKINADA-2 AP
44 A042 KANCHARAPALEM AP
45 A043 KURNOOL AP
46 A044 KURNOOL-2 AP
47 A045 KURNOOL-3 AP
48 A046 MACHILIPATNAM AP
49 A047 MADANAPALLI AP
50 A048 MADDILIPALEM AP
51 A049 NANDYAL-2 AP
52 A050 NANDYALA AP
53 A051 NARASAPURAM AP
54 A052 NARASARAOPET AP
55 A053 NARASARAOPET-2 AP
56 A054 NARSIPATNAM AP
NELLORE-2 GANDHI
57 A055 AP
STATUE
58 A056 NELLORE-3 TRUNK ROAD AP
59 A057 NELLORE-4 VEDAYAPALEM AP
60 A058 NELLORE-NARTHAKI AP
61 A059 NUZIVEEDU AP
62 A060 ONGOLE AP
63 A061 ONGOLE-2 AP
64 A062 PALAKOLLU AP
65 A063 PALLASA AP

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66 A064 PARVATHIPURAM AP
67 A065 PRODUTUR-1 AP
68 A066 PRODUTUR2 AP
69 A067 RAJAMUNDRY-1 AP
70 A068 RAJAMUNDRY-2 AP
71 A069 RAJAMUNDRY-3 AP
72 A070 RAJAMUNDRY-4 AP
73 A071 RAMACHANDRAPURAM AP
74 A072 RAYACHOTI AP
75 A073 REPALLE AP
76 A074 SRIKAKULAM AP
77 A075 SRIKAKULAM-2 AP
78 A076 SULLURUPET AP
79 A077 TADEPALLIGUDEM AP
80 A078 TADIPATHRI AP
81 A079 TANUKU AP
82 A080 TENALI AP
83 A081 TENALI-2 AP
84 A082 TIRUPATHI-3 AP
85 A083 TIRUPATHI-IV AP
86 A084 TIRUPATHI-V AP
87 A085 TIRUVURU AP
88 A086 TPT-CENTRAL AP
89 A087 TPT-GH ROAD AP
90 A088 VIJAYANAGARAM AP
91 A089 VIJAYANAGARAM-2 AP
92 A090 VIJAYAWADA-1 AP
93 A091 VIJAYAWADA-2 AP
94 A092 VIJAYAWADA-3 AP
95 A093 VIJAYAWADA-5 AP
96 A094 VIJAYAWADA-8 AP
97 A095 VIJAYAWADA-IV AP
98 TG01 DC – TELENGANA TG
99 T001 A S RAO NAGAR TG
100 T002 ADILABAD TG
101 T003 ALWAL TG

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102 T004 AMBERPET TG

103 T005 AMEERPET TG
104 T006 AMEERPET-2 TG
105 T007 AMEERPET-3 TG
106 T008 ATTAPUR TG
107 T009 BALANAGAR-2 TG
108 T010 BANJARAHILLS-12 TG
BEGUMPETA-WHITE
109 T011 TG
HOUSE
110 T012 BODHAN TG
111 T013 CHAITANYAPURI-2 TG
112 T014 CHANDANAGAR TG
113 T015 CHANDANAGAR-2 TG
114 T016 CHINTAL TG
115 T017 DILSUKHNAGAR TG
116 T018 DILSUKHNAGAR-2 TG
117 T019 GADWAL TG
118 T020 GODAVARIKHANI TG
119 T021 HANUMAKONDA TG
120 T022 HANUMAKONDA-2 TG
121 T023 HANUMAKONDA-3 TG
122 T024 HIMAYATNAGAR TG
123 T025 HITECH CITY TG
124 T026 KAMAREDDY TG
125 T027 KARIMNAGAR TG
126 T028 KARIMNAGAR-2 TG
127 T029 KARIMNAGAR-3 TG
128 T030 KARIMNAGAR-4 TG
129 T031 KHAMMAM TG
130 T032 KHAMMAM-2 TG
131 T033 KHARKHANA TG
132 T034 KHARKHANA-2 TG
133 T035 KHAZIPET TG
134 T036 KONDAPUR TG
135 T037 KOTHAGUDA TG
136 T038 KOTHAGUDEM TG

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137 T039 KUKATPALLY TG

KUKATPALLY-BALAJI
138 T040 TG
NAGAR
139 T041 KUKATPALLY-BJP TG
140 T042 KUKATPALLY-PEPE TG
141 T043 LALBANGLAW TG
142 T044 LALBANGLAW-2 TG
143 T045 LANGAR HOUSE TG
144 T046 MADHAPUR TG
145 T047 MAHABOOBNAGAR TG
146 T048 MAHABUBABAD TG
147 T049 MALAKPET TG
148 T050 MALKAJGIRI TG
149 T051 MALLAPUR TG
150 T052 MANCHERIYAL-2 TG
151 T053 MANCHIRYALA TG
152 T054 MANJEERA-MAJESTIC TG
153 T055 MEDCHAL TG
154 T056 MEHADIPATNAM TG
155 T057 MIRYALAGUDA TG
156 T058 NAGOLE TG
157 T059 NALGONDA TG
158 T060 NARSAMPET TG
159 T061 NEREDMET TG
160 T062 NIZAMABAD TG
161 T063 NIZAMABAD-2 TG
162 T064 NIZAMABAD-3 TG
163 T065 PANAJGUTTA TG
164 T066 RAMANTHAPUR TG
165 T067 RTC X ROAD-NEW TG
166 T068 SANGAREDDY TG
167 T069 SANTOSH NAGAR TG
168 T070 SD ROAD TG
169 T071 SIDDIPET TG
170 T072 SURYAPET TG
171 T073 TARNAKA TG

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172 T074 TOLICHOWKI TG

173 T075 UPPAL TG
174 T076 VANASTHALIPURAM TG
175 T077 VANASTHALIPURAM-2 TG
176 T078 VIDYANAGAR TG
177 T079 WARANGAL TG
178 T080 WARANGAL-2 TG
179 T081 WARANGAL-3 TG
180 T082 ZAHEERABAD TG

FI_CC_02: COST CENTER GROUP

You can use the groups to build cost centre hierarchies, which summarize the decision-
making, responsibility, and control areas according to the particular requirements of the
organization. The individual cost centres form the lowest hierarchical level.
There must be at least one group that contains all cost centres and represents the entire
business organization. This cost centre group is described as the standard hierarchy. You
can assign more cost centre groups to the standard hierarchy.
You can also create any number of alternative groups. You can structure these, for
example, according to organizational and/or functional viewpoints. Cost centre groups
enable you to perform evaluations for each decision-making, responsibility, or control
area. They also support the processes during planning and internal allocations.

The Cost Centre Group at company code Level and Plant Level. Cost Centre Group list
will be finalize at Realization phase.

FI_CC_03: POSTINGS TO COST CENTRE

Postings in Cost Centre involve direct posting of expenses from upstream components
(Other SAP modules) to the Controlling (CO) application component (module). In the CO
component, this transfer occurs real-time from the components Financial Accounting
(FI), Asset Accounting (AA), Materials Management (MM). This is achieved by entering a
cost object (such as a cost centre or an internal order) during account assignment.

A) POSTINGS FROM MM: Certain material are not stocked but is charged off at the time
of purchase itself. The item is assigned to a cost centre in the purchase order. In this
case consumption is booked at the time of goods receipt. For example: Printing &
Stationery is issued and cost booked to Administration Cost Centre.

B) POSTINGS FROM ASSET ACCOUNTING: Each asset is assigned to a cost centre and
depreciation is debited to it during Depreciation Run at period end.

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C) POSTINGS FROM FI: During expense booking in FI the relevant Cost Centre is assigned
which enables the flow of the expense to the relevant cost centre.

D) POSTINGS FROM HCM: At the time of payroll processing system will consider
employee cost relates elements in cost

Note: Integrated value flow will happen to cost centre when expenses are posted in
financial accounting general ledger account of expenses. Cost centre line items with
date and value of posting will automatically updated in CO.

FI_CC_04: COST ALLOCATION

Cost allocations will be performed under controlling area. Company code can allocate
their costs using the Standard allocation tools provided by SAP.

Cost allocations in SAP shall be done using the procedure of Distribution & Assessment.

Under this procedure, the costs collected on a cost centre during the accounting period
are allocated to receivers. These are indirect allocation methods for which user-defined
keys such as percentage rates, amounts, or posted amounts provide the basis for
cost/quantity assignment.

These methods are easy to use as the keys and the sender/receiver relationships are
usually defined only once.

For example, Salary costs are collected on a cost centre for each period & then can be
allocated using the process of reposting or distribution/ assessment cycles at the end of
the period according to the number of employees in each cost centre.

Methods of cost allocation include:

1) Distribution which moves primary costs from one object to another using the original
posted primary cost elements.

2) Assessments which moves primary and secondary costs from one object to another
using a secondary cost element.

3) Reposting which moves primary costs from one object to another using the original
posted primary cost element.

FI_CC_05: DISTRIBUTION

Distribution is a method of internal cost allocation that allocates primary costs. Main
feature of this process is that the original cost element is retained in the receiver cost

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centre. Information about the sender and the receiver is documented in the Controlling
document.

STEP PROCEDURE TCODE

1 Distribution Cycle period wise KSV5
2 Define Distribution Cycles S_ALR_87005757

FI_CC_06: PERIODIC REPOSTING

Primary posting such salaries are collected on an allocation object (cost centre,
overhead cost order) to restrict the number of FI posting as much as possible. Later,
these costs are allocated during the period –end closing to the corresponding
controlling objects. During this process, we can only repost primary cost and the
original cost element remains the same.

Items required for manual reposting of cost:

1. Sending Cost centre

2. Receiving cost centre
3. Cost element

STEP PROCEDURE TCODE

1 Periodic Reposting Period wise KSW5
2 Define Periodic Reposting Cycles S_ALR_87005395

FI_CC_07: MANUAL REPOSTING OF COST

We use the manual reposting of the cost function mainly to adjust (correct) posting
errors.

When we make an internal reposting, the primary costs are reposted (under the original
cost element) to a receiving cost centre. If the initial transaction is posted using an
incorrect cost element, the transaction must be corrected in the original application
component in order to ensure reconciliation between external and internal accounting.

Note that no sender check is made, in other words the system does not check whether
the costs we repost actually exist on the sending cost centre. This means that negative
costs may appear on the sending cost centre.

Items required for manual reposting of cost:

1. Sending Cost centre (From we need to remove the cost)

2. Receiving cost centre (to which we transfer the cost)

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3. Cost element (From where we need to repost)

STEP PROCEDURE T-CODE

1 Enter Manual Reposting of Costs KB11N
2 Display Manual Reposting of Costs KB13N
3 Reverse Manual Reposting of Costs KB14N

FI_CC_08: REPOSTING OF LINE ITEMS

The function for reposting line items enables us to repost specific line items from
Management accounting documents. This function is designed to enable us
to correct primary postings that we assigned to the wrong accounts. To do this, the
Management Accounting document must contain a reference to the original FI
document.

Reposting line items is the equivalent of a reversal on the sender object. We can also
enter more than one receiver object.

If we repost a line item in Management Accounting, the original account assignment

object remains noted in the FI document. To correct the account assignment object in
the FI document, we will need to reverse the FI document. If we have already carried
out a line item reposting in Management accounting for this document, we will first
need to reverse this reposting before we can reverse the document in FI.

Items required for manual reposting of cost:

1. Reference document number.

2. Receiving cost centre (to which we repost the cost).

STEP PROCEDURE T-CODE

1 Create Repost Line Items KB61
2 Display Repost Line Items KB63
3 Reverse repost Line Items KB64

FI_CC_09: STANDARD REPORTS

STEP REPORT DESCRIPTION TCODE

1 Cost Canters: Plan/Actual/Variance Lists actual & plan figures for a cost centre area or S_ALR_87013611
Comparisons a cost centre.
2 Area: Cost Canters Displays the actual and plan postings of a cost S_ALR_87013612

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centre area for each cost centre

3 Range: Cost Elements (Goods for CC Lists the plan and actual figures of a cost centre S_ALR_87013613
Roll to Account) area, and balances them for each cost element.
4 Cost Canters: Plan/ Actual/ Commitment To compare the actual costs and commitments with S_ALR_87013620
Comparisons the planned costs
5 Cost Centre Total Report Cost Canters: Actual/Plan/Variance/Previous S_ALR_87013633
6 Cost Canters: Curr/Cum/Total Year To compare the actual and plan figures for the S_ALR_87013638
current period or complete fiscal year
7 Cost Centre Display To look up the basic data for a cost centre KS03
8 Cost Canters: Actual Line Items To display actual cost line items for cost centers KSB1
9 Controlling Documents: Actual Display actual cost documents KSB5
10 Cost Canters: Plan Line Items Display plan cost line items for cost centers KSBP
11 Cost Canters: Activity Prices Activity Type Price Report KSBT
12 Cost Canters: Planning overview Cost Canters: Planning report KSBL
13 Cost Canters: Master Data Report To display cost centers: Master Data Report KS13
14 Cost Elements: Master Data Report To display cost elements: Master Data Report KA23
15 Display Cost Centre Group Display Cost Centre Group KSH3
16 Direct Activity Allocation Enter Direct Activity Allocation KB21N
17 Direct Activity Allocation Reverse Direct Activity Allocation KB24N
18 Standard Hierarchy Display Standard Hierarchy OKENN

5. Changes to Existing Organization

6. Key Business Improvements
7. Description of Functional Defects
8. Notes on further Improvements

9. System Configuration Considerations

A. Company Codes

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B. Controlling Area
C. Cost Center Hierarchy

10. Developments Consideration

10.1 Data Conversion Considerations

Ref. Description of Objects / Data to Data Conversion Reference
# be Converted Method (CATT, Development
LSMW, Specification
Development) Number

10.2 Interface Considerations

Ref. Description of System / Process to be Reference Interface
# Interfaced Specification
Document Number

10.3 Reporting Considerations

Ref. Description of Report Requirements Reference Report
# Development
Specification

10.4 Form Considerations

Ref. Description of Forms Reference
# Enhancement
Specification Number

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10.5 Enhancement Considerations

Ref. Description of Enhancement Requirements Reference
# Enhancement
Specification Number

11. Authorization Considerations

Data Data T. Fitne Responsib R Process

input output Code in ss ility/ e ing
SAP Authorizati m system
Activity D/W/ on ar (SAP,
N/C ks non-
SAP
etc.)

Authorization will
be finalized at
Realization Stage

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