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So what exactly is SAP ERP Financial’s Management Accounting?  For many companies, the (1) lack of timely, accurate information on which to base both operational and strategic business decisions; (2) the inability to pinpoint most profitable products, customers, and channels in order to create optimal product mix; and (3) the need for single, reconciled source of cost and financial accounting truth are real problems.  SAP’s Management Accounting solution will:

  • Automate the assignment of costs, decreasing cycle times while increasing visibility and control through transparent, drillable cost assignments;
  • Improve forecasting and planning accuracy for the better control of costs and revenues;
  • Achieve a multi-dimensional profitability analysis by using best practice cost accounting methodologies and assignments;
  • Enhance the impact of management accounting information through effective reporting and collaboration; and
  • Make management accounting information available to all managers and analysts, whether expert or occasional users, through role-based portals.

 

So let’s see how well you know SAP Management Accounting.  Here are a series of questions – the answers are at the end so don’t peek…

Q1:  Does SAP Management Accountingt support the ability to have a virtually unlimited number of cost center hierarchies?

Q2:  How does SAP Management Accounting differentiate the type of work tracked by a cost center and how is it valued?

Q3:  How does SAP Management Accounting facilitate the assignment of overhead costs to individual products, services, or market segments?

Q4:  Is it possible to establish effectivity dates on cost centers in SAP Management Accounting?

Q5:  What methods are utilized by SAP Management Accounting to collect, plan, analyze and control costs?

Q6:  Does the SAP Management Accounting solution provide support for saving costs saved between each production status or lifecycle change to create a cost history?

Q7:  Does the SAP Management Accounting solution support allocating production group costs to individual productions within a group or amortizing them across the whole run to calculate unit costs by that product on the print run?

Q8:  Does the SAP Management Accounting solution support overrides for automatically generated costs?

Q9:  Is it possible to enter narratives against each expense item submitted on forms?

Q10:  Can the SAP Management Accounting solution export data such as, current or prior year plan or actual information at the line item level in Excel or other ASCII file format?

Q11:  Does the SAP Management Accounting solution support work in process (WIP) accounts?

Q12:  Does SAP Management Accounting support both legal and management reporting requirements?
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Here are the answers:

Q1:  Does SAP Management Accountingt support the ability to have a virtually unlimited number of cost center hierarchies?

Answer:  SAP Management Accounting supports the ability to have a virtually unlimited number of cost center hierarchies.  Each one can be easily copied or changed to support planning or reorganizations.  Standard delivered reports can be run against any of these hierarchies.  This gives an organization a great deal of flexibility in viewing data from both a management or legal perspective.  Screens are provided to enable an authorized user to easily maintain any hierarchy.  Hierarchies can be as high and wide as desired. 

Q2:  How does SAP Management Accounting differentiate the type of work tracked by a cost center and how is it valued?

Answer:  SAP Management Accounting allows you to define activity types to classify the activities or type of work produced in the cost centers. The prices of the activity types of a cost center can be either entered manually, or calculated by the system based on the costs allocated to the activities. Prices can be calculated either using plan costs or actual costs.

Q3:  How does SAP Management Accounting facilitate the assignment of overhead costs to individual products, services, or market segments?

Answer:  SAP Management Accounting will enable you to  allocate overhead costs to those cost centers directly involved in the creation of the products or services. From these cost centers you can then use different methods to assign the activities and costs to the relevant products, services, and market segments.

Q4:  Is it possible to establish effectivity dates on cost centers in SAP Management Accounting?

Answer:  Within the SAP Management Accounting system, each cost center has it’s own master record. This provides a great deal of flexibility and control including the ability to put effectivity dates on cost centers.

Q5:  What methods are utilized by SAP Management Accounting to collect, plan, analyze and control costs?

Answer:  The SAP Management Accounting system provides many different types of cost collectors or objects.  These include Cost Centers, Internal Orders, Profitability Segments and Projects.  Each cost collector or object has been designed to provide varying levels of detail and control.  This capability and design is unique to SAP.  It provides users with superior capabilities around the collection, control, planning, and analysis of costs.

Q6:  Does the SAP Management Accounting solution provide support for saving costs saved between each production status or lifecycle change to create a cost history?

Answer:  Snapshots of each production can automatically be created when a status is changed.

Q7:  Does the SAP Management Accounting solution support allocating production group costs to individual productions within a group or amortizing them across the whole run to calculate unit costs by that product on the print run?

Answer:  Allocating production group costs to individual productions within a group or amortizing them across the whole run to calculate unit costs by that product on the print run can be done by using the overhead functionality of SAP® software.

Q8:  Does the SAP Management Accounting solution support overrides for automatically generated costs?

Answer:  Automatically generated costs can be overridden manually in the SAP Management Accounting solution.

Q9:  Is it possible to enter narratives against each expense item submitted on forms?

Answer:  Narratives can be entered in the SAP Management Accounting application for each expense item. Additionally, expense types can have standard narrative prompts to ensure that the correct information is entered. For example, expense types for taxis can prompt employees to enter “from and to” destinations.

Q10:  Can the SAP Management Accounting solution export data such as, current or prior year plan or actual information at the line item level in Excel or other ASCII file format?

Answer:  The SAP Management Accounting solution can export any information including  variances at the line item level in Excel and ASCII file formats.

Q11:  Does the SAP Management Accounting solution support work in process (WIP) accounts?

Answer:  The SAP Management Accounting solution is an integrated solution, which automatically shows WIP. Therefore, no special  support for work in process (WIP) accounts is required.

Q12:  Does SAP Management Accounting support both legal and management reporting requirements?

Answer:  The SAP Financials solution provides comprehensive capabilities in the areas of legal and management reporting. The SAP G/L provides a comprehensive picture of external accounting and accounts. It enables the recording of all business transactions in a software system that is fully integrated with all the other operational areas of a company. This ensures that the accounting data is always complete and accurate. In General Ledger Accounting, you can perform internal management reporting in parallel with legal reporting. For this purpose, SAP provides Profit Center Accounting functions which are integrated with General Ledger Accounting. Furthermore, you can generate financial statements for any dimension such as profit center which can be at a level that is more granualar than company code.

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To learn more about SAP Financials – Management Accounting solution, especially in the areas of Cost Center Accounting, Profit Center Accounting, Product Costing, and Profitability Analysis, I recommend you try the AC040, AC410, AC610, AC505, AC520, and AC605 training courses provided within SAP Education’s Management Accounting Learning Map.   

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2 Comments

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  1. Gregory Misiorek
    Ken,

    do u have a way to tie SAP classes to the accepted certifications covering the profession like CPA, CMA, CGA, etc and how it can relate to IFRS segment reporting? i would also point out the merging of CO and FI modules as the new ledger allows making entries both ways. in my mind, top financial entity is the group of company codes and top management entity is the group of profit centers. functional areas and business areas are the “legacy” entities, but can still be used.

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