Activate Project Management in Controlling Area

IMG ---> Project System ---> Costs ---> Activate Project Management in Controlling Area

Here you activate the project management in controlling area

Select your controlling area

Double click:

The check box should be selected to activate, then save the document

Maintain Value Categories

IMG ---> Project System ---> Costs ---> Value Categories---> Maintain Value Categories

Here you define value categories. Value categories are intervals of:

· Cost elements· Commitment items· Statistical key figures

These are required for:· Updating the project information database· Defining structure reports for costs, revenues, and payments· Updating quantities in the project info database RPSQT

Then Save the Document.

2.3 Assign Cost Elements to Value Categories

MG ---> Project System ---> Costs ---> Value Categories---> Assign Cost Elements to Value Categories Update the following:-

Then Save the document, and press Back Icon

Similarly assign other value categories to cost elements. Click on New entries

Then create the Planning Profile

Create/Change Planning ProfileIMG ‡ Project System ‡ Costs ‡ Planned costs‡ Manual Cost Planning in WBS ‡ Hierarchical Cost Planning ‡ Create/Change Planning Profile

Assign Plan Profile to Project Profile

IMG ‡ Project System ‡ Costs ‡ Planned costs‡ Automatic Costing in Networks/Activities ‡ Costing ‡ Define Costing Variants

Define Costing Variants

IMG ‡ Project System ‡ Costs ‡ Planned costs‡ Automatic Costing in Networks/Activities‡ Costing‡ Define Costing Variants

Double click

Maintain plan costing variants for network types

IMG ‡ Project System ‡ Costs ‡ Planned costs‡ Automatic Costing in Networks/Activities‡ Costing‡ Maintain plan costing variants for network types

Then save the document.

Maintain Budget Profiles

IMG ‡ Project System ‡ Costs ‡ Budget‡ Maintain Budget Profiles

Stipulate Default Budget Profile for Project Definition

IMG ‡ Project System ‡ Costs ‡ Budget‡ Stipulate Default Budget Profile for Project Definition

Create Number Ranges for Budgeting

IMG ‡ Project System ‡ Costs ‡ Budget‡ Create Number Ranges for Budgeting

The following number ranges are defined in the standard system: 01 Project budget ¸ 02 Project plan ¸ 03 Order plan ¸ 04 Order budget We will work with the standard number ranges

Define Tolerance Limits

IMG ‡ Project System ‡ Costs ‡ Budget‡ Define Tolerance Limits

Availability control can identify budget overruns in a project at an early stage and initiates various actions. You activate availability control for you budget profile. You can specify one or more tolerance limits for each activity group for a budget profile.

Define default cost elements for down payments

IMG ‡ Project System ‡ Costs ‡ Actual Costs and Forecast‡ Update Down Payments ‡ Define default cost elements for down payments

Here you define the cost/revenue elements, under which down payments are updated as expenses in CO.

For down payments referring to a purchase order, SAP system uses the purchase order cost element. If there is no reference, in this the case, you need to define one cost element (category 01 = primary cost elements general) for credit-side down payments in each controlling area, or one revenue element (category 11 = revenue elements) for debit-side down payments.

When you assign down payment or purchase order costs, SAP System updates the account assignment objects cost center, order, make-to-order production order, WBS element, and network.

Create Allocation Structure

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement‡ Settlement Profile ‡ Create Allocation Structure

In Allocation structure you define the target cost element

Here 2 options are available:-

1) Using the original source cost element

2) Using the settlement cost element

Select

Double click – Assignments – then select the new entries

Select

Double click – Source available in left frame

The above cost element group contains all the cost elements (primary as well as secondary cost elements)

Double click

Then save the document

Create Settlement Profile

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement‡ Create Settlement Profile

Here you create a settlement profile for settling costs from networks to the WBS elements. The settlement profile contains a range of control parameters for settlement. Assign the allocation structure Z1 to the settlement profile.

Specify Default Settlement Profile for Project Definition

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement‡ Create Settlement Profile

Then save the document

Define Strategies for Determining Settlement Rules

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement ‡ Define Settlement Rule for Network ‡ Define Strategies for Determining Settlement Rules

Here you define a strategy to determine the settlement rule in the network. You must define the strategy for the settlement rule in the parameters for the network type.

You enter the sequence in which the settlement rule is determined for each strategy: ·o Copy the settlement rule from the WBS element · o Copy the settlement rule from the project definition · o Generate a settlement rule to the WBS elemento Generate a settlement rule by default (predefined by the system)o Maintain a settlement rule manually

The SAP standard strategies for settlement rule are given below

Take a drop down in the field Typ

We have assigned the strategy 03 in the parameters for network type Z901 and Z902 in the earlier step which can be seen below

We have assigned 03 default rule which has automatic generation of settlement rules.

Assign Strategies and Default Rules to Network Types

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement ‡ Define Settlement Rule for Network ‡ Assign strategies and default rules to network types

Here you assign a strategy and a default rule to the network type.

The assignment regulates control of the settlement rule for activities created later in the network.

PS1 is SAP standard default rule for network to WBS elements settlement.

Specify Default Settlement Profiles for Networks

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement ‡ Define Settlement Rule for Network ‡ Specify Default Settlement Profiles for Networks

We assign the settlement profile ZNWBS9 created by us earlier to the network type Z901 and Z902.

Determine Strategy for Settlement Rule

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement ‡ Settlement Rule for Work Breakdown Structure Element‡ Determine Strategy for Settlement Rule

Here you define the strategy for automatic generation of settlement rules.

The strategy is used to determine: To which objects the settings apply:

o Billing element o Account assignment element o Neither

Double click – settings

Then save the document

Assign Strategy to Project Profile

IMG ‡ Project System ‡ Costs ‡ Automatic and Periodic Allocations‡ Settlement ‡ Settlement Rule for Work Breakdown Structure Element‡ Assign Strategy to Project Profile

Dates

Define Parameters for WBS Scheduling

IMG ‡ Project System ‡ Dates ‡ Date Planning in WBS ‡ Define Parameters for WBS Scheduling

The profile for WBS scheduling, for example, contains the following control parameters:

whether the dates are to be recalculated automatically when saving ¸ whether the error log is displayed automatically if errors were determined during scheduling ¸ the number of days the start may be in the past ¸ whether basic dates are to be adapted if the earliest or latest dates of the network change ¸ maximum reduction level for reduction

The profile for WBS scheduling is stored in the project profile.

Then save the document

Material

Availability checko Here we configure all the settings necessary to configure the material availability check in

networks.

Define Checking Rules

o IMG ‡ Project System ‡ Material ‡ Availability Check‡ Define Checking Rules There are standard checking rules available in SAP system.

Define Checking Scope

IMG ‡ Project System ‡ Material ‡ Availability Check‡ Define Checking Scope

Checking group and checking rule determine the checking scope

You can specify: o which elements relevant to MRP (goods receipts/goods issues) are taken into account o (for example purchase requisition, purchase order)

o which stock categories are taken into account

o whether replenishment lead time is checked

Checking rule PS is maintained for :- 01 Daily requirement 02 Individual requirement CH Batche

Steps in Settlement

1. Create Settlement Profile

In the settlement profile, you define a range of control parameters for settlement.

The settlement profile for the sales order item must allow settlement to a profitability segment or a G/L account.

The requirements class of the sales order item determines what settlement profile is proposed. The settlement rule for settling the sales order item to Profitability Analysis is generated by the

system automatically when you create the order with a sales order item that carries costs and revenues.

Costing variant

Contains all control parameters for costing, including parameters that control how cost estimates are executed and which material prices or activity prices are used to valuate the costing items.

The costing variant forms the link between the application and Customizing, since cost estimates are created and saved with reference to a costing variant.

The costing variant controls how costing is executed, such as:

Whether the costing results are planned costs or actual costs Which prices are used to valuate materials, internal activities, and external activities How overhead is calculated

A costing variant includes the following groups of settings:

Costing type Valuation variant Number range assignment

The standard system contains a number of predefined costing variants.

Costing type

Parameter that establishes the technical attributes of a cost estimate. For a material cost estimate, the costing type controls the following:

o How the cost estimate is used, and which field in the material master is updated with the cost calculated in the cost estimate (such as the standard price, commercial price, or tax valuation price)

o Which costs are used as the basis for allocating overheado Which valuation view (legal, group, or profit center) is costed

Valuation variant

The valuation variant controls how the materials and activities in the cost estimate are valuated.

The valuation variant specifies the following parameters: Which price in the material master (such as the standard price) or in the purchasing info record

(such as the net order price) is used to cost a material in the BOM Which planned or actual price is used to valuate the internal activities Which version in Cost Center Accounting is used to valuate internal activities Which costing sheet is used to calculate overhead Whether and to what extent a BOM item or an operation in the routing is relevant to costing