Controlling Area
The controlling area is the major organizational element within Controlling. Without the controlling area, no configuration in Controlling is possible, and no postings will effectively hit the Controlling module. It’s possible to run Financial Accounting without activating Controlling, but not the other way round. Sometimes small finance companies or holdings don’t use Controlling because the number of postings is very limited, and no management reporting for those entities is being done.
You might be wondering why you can have a 1:1 relationship between controlling area and company code or a 1:n relationship between controlling area and company code. Assigning multiple company codes to one controlling area requires that the company codes use the same chart of accounts and the same fiscal year variant. SAP recommends that you only maintain one controlling area, if possible, for the following reasons:
Reduces master data maintenance, which happens on the controlling area level
Allows cross-company code logistical processes
Allows cross-company code profit center allocations
Allows group costing
Harmonizes controlling processes within one controlling area. Enables cross-company code reports (standard SAP reports can’t run with multiple controlling areas)
Enables group management reporting with standard SAP reports
However, maintaining only one controlling area requires that closings follow a tight schedule and are done in parallel because Controlling has a period-end closing functionality that currently works only on the controlling area level. In other words, if someone closes the controlling area, no one else can execute month-end transactions anymore. Due to the growth of the companies and the recommendation to use only one controlling area, SAP offers a product that allows the closing of the controlling area that is dependent on the company code. This product isn’t included in SAP ERP out of the box (known as the “standard”).
Cost Centres: This is used to activate Cost Centre Accounting.
AA: Activity Type: This allows you to enter an activity type when creating a posting in Financial Accounting with a cost centre assignment. This is used for payroll accounting or depreciation, for example. The additional assignment of an activity type allows you to make an actual/plan comparison on the activity type level.
Order Management: This is used to activate internal orders.
Commit. Management: This is used to activate commitments on controlling objects. When someone creates a purchase order and assigns this purchase order to a cost centre or internal order, you can see the value of the purchase order as a commitment on the controlling object.
Profit. Analysis: This can be activated only when the controlling area is assigned to an operating concern.
Activity Based Costing: This is used to activate activity-based costing, which is based on identified activities within a company and assigns all costs to those activities.
Projects: This should be activated if you use SAP ERP Project System.
Sales Orders: This should be activated if you work with sales order stock.
W. Commit. Mgt. (with Commitments Management): If this is activated, the system creates a commitment when someone creates a sales order with an assignment to a cost object. The commitment is shown on the cost object until the sales order is billed.
Cost Objects: This is used to activate Cost Object Controlling (e.g., process orders, production orders).
Standard Hierarchy for Cost Centers: Indicated hierarchy of cost center groups in which all cost centers in a controlling area are gathered together. Under Cross-company-Code Cost Accounting. All company codes you want to assign need to use the same chart of accounts and the same fiscal year variant; otherwise, those company codes can’t be assigned to the same controlling area due to technical reasons. Currency type 20 can only be used in controlling not financial accounting and therefore decision has been made to adopt currency type 30. Controlling object currency can be changed is controlling area currency is similar to company code currency.
Document Number Ranges
A FI number range must be assigned to each document type in the SAP System. Via the document types, you distinguish the postings according to the different business transactions, for example customer payment, vendor credit memo, and so on. To store documents separately according to document types, you must assign a separate number range to each document type, for example to invoices or to credit memos.
A numbered document is generated for every posting in CO. The document numbers are unique in each controlling area. In CO, there are no legal requirements for a continuous assignment of document numbers. To improve performance, after each restart of an application server, a maximum of 100 document numbers for each number range remain unassigned. Every transaction (categorised by element and) that you carry out on the controlling area level has to be assigned to a number range group which is linked to number ranges.
An internal interval for all documents to which the user did not explicitly assign a document number
An external interval for all documents where the document numbers were assigned by the user, or which are transferred into the SAP system from a non-SAP system (for example, through batch input) and the original document numbers are to be retained
If no external document number is given during posting, the system uses the next open number from the internal number interval of the transaction it belongs to. When you’re creating a number range, the system asks whether you want to transport the number ranges. Never transport number ranges because they can cause inconsistencies in the target system. Instead, always create number ranges directly in the target system.
NR Status: Contains the last assigned number for internal number range intervals.
External: The SAP system issues the numbers for internal number range intervals automatically. This number is between the from-number and the to-number. The last number issued is logged in the current number level. You need to enter a number for external number issue. The number you enter needs to be between the from-number and the to-number.
Rajesh Sharma
SAP WM/EWM Functional Consultant
§ Linked in profile: https://www.linkedin.com/in/rajesh-sharma-3a565821/
§ Twitter: RajeshS98151512/ RAJESH SHARMA@RAJESHS21287609
§ SAP Blogs: https://www.sastrageek.com/blog
