Hi Friends

Indirect activity allocation is a very common functionality and it is used in almost every implementation. At my times of practice this was a very scary topic to understand for me and the screens which I am sharing here are actually of that time only. Why I am sharing these screen today??? Reason is that even at my time I could not find any easy document on this topic and today some-one on the forum is asking help on this.

So let us start:

Important :

  1. Activities of Activity type Categories ‘2’ and ‘3’ can only be used in Indirect Activity Allocation for Senders.
  2. Indirect Activity Allocation should be used when either Sender quantities or Receiver quantities are not known or it is difficult to ascertain either of two quantities.

Process Flow:

Case1: Sender ‘Steam’ Activity Quantity is not known but receiver activity quantities are available. So we will create Activity type for Category ‘2’.

Sender Cost Centre is 13000701 and receiver Cost Centres are 13000301 to 13000303 with required Activity Quantities 10000 Kgs, 20000 Kgs and 30000 Kgs respectively.

Sender Activity is 3001 (cat. 2) and receiver Activity is 943002 (cat. 1).

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Create Secondary Cost Element of Category ‘43’ as per requirement of business. (KA06)

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Create Indirect Activity Allocation Cycle (KSC7)

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Press Enter and fill required details

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Click on ‘First segment’

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Go to Next Tab

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Next

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Save the Cycles.

Do Activity Planning (KP26) at Receiver cost centres i.e. 13000301 to 13000303 for activity 943002 . Planning for sender cost centre 130007001 is not required as it is not known and will get planning figures automatically during allocation process, from the total quantities of receiver cost centres.

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See Cost Centre Report S_ALR_87013611. You will find there that activities are planned for Cost centres 13000301 to 13000303 but  no planning for cost centre 13000701 (sender). Further,  there  is no Cost planning for any cost centres.

Run Indirect Activity Allocation Cycle (KSCB)

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Remove Test run and Execute.

Now, See Cost Centre Report S_ALR_87013611. You will find there that activities are planned for Cost centres 13000301 to 13000303 and total of activity planned  for these cost centres  i.e. 60000 Kgs is planned  for cost centre 13000701 (sender).  But till now  there is no Cost planning for any cost centres.

Do Activity input planning (KP06) for Sender Cost Centre 13000701.

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Calculate activity price for sender cost centre 13000701. (KSPI)

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Now if you See Cost Centre Report S_ALR_87013611. You will find  that now  there is Cost planning also for receiver  cost centres along with sender cost centre. It comes by multiplying activity price at sender cost centre with activity quantity planned at receiver cost centres.

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This ends the process in case of plan indirect activity allocation.

Regards

Rajneesh Saxena

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22 Comments

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      1. Kamal Kumar SAP Consultant/Trainer

        One question Rajneesh..can we make other fields like ORDER as receiver in sender/receiver tab? if you  did it pl post…

        I am testing a scenario where sender cost will be allocated on some output ratio because even qty is not determine at receivers also.

        kamal

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    1. Rajneesh Saxena Post author

      Thanks Arturo.

      This document was posted against a thread on the forum on this subject. This I learnt from you only. If you remember one day you helped me in the same way on cost roll up issue.

      Regards

      Rajneesh

      (0) 
  1. sonu1980sap sonu1980sap

    Hi rajneesh,

    Thanks for the excellent document.

    what I understood from this document( Correct me if i am wrong)

    Why we are using indirect activity allocation – Where one cost center doing some activity in order to banefit other cost center. And also to get price of those activity are  value booked under sender cost enter will be divided by Qty of reciever activity+cost center.

    In above example plan rate = 120000/60000=2rs

    When we do Plan price calculation then system multiply rate and reciever plan qty to achieve plan value.

    Cost center 13000301 = plan activity * plan rate

                                            = 10000 * 2 = 20000

    Summary – It is 2 step process

    when you run cycle – Qty will update

    when you do plan price caluclation – value will update.

    Question

    1) Why we required indirect allocation?. I can achieve the same with assessment cycle where activity willtracing factor to charge cost one cost center to other ( based on plan/actual consumption) and then splitting etc..

    2) cost center 13000301 has 20000 rs debit and 20000 rs credit entry. When cost center get debit and when it will get credit?.

    regards

    Sonu…

    (0) 
    1. Rajneesh Saxena Post author

      Hi Sonu

      This document was posted specially for you. I tried to give you the concept, and it seems that I am passed with good marks 😉 .

      A1. Indirect activity allocation is done to allocate the activities when either activity at sender CC is not known or at receiver not known.

      A2. In case of plan, CC is debited with planned values and when you do price calculation CC gets credited. In case of actual CC gets debited when actual FI posting happens on the CC and gets credited when actual confirmation is done on prod order/product cost collector and so on.

      Regards

      Rajneesh

      (0) 
      1. sonu1980sap sonu1980sap

        Hi Rajnessh,

        I have executed plan and actual IAA cycle successfully.

        But I have a one doubt in Actual IAA cycle.

        Case 1

        I have transfered Power actual qty from production cost center to utility cost center through Actual IAA cycle and executed splitting/Revaluation of activity as well.

        Situation in cost center after CON2.

        Utility cost center

        Utility Cost center
        Head GL Account Amount Indicator Entry posting
        Power cost GL1 10000 DR GL posting
        Utility Cost SCE1 10000 CR Revaluation
        Over/Under Ab 0
        Activity type Utility 1000

        Production Cost cetner

        Production Cost cetner
        Head GL Account Amount Indicator Entry posting
        Utility Cost SCE1 10000 DR Revaluation
        Activity type Power 1000

        Power cost booked in utility cost center through FI JV 10000rs

        Con2 has posted one CO documentwith

        DR production cost center along with utility activity SCE with 10000 rs.

        CR utility cost center with SCE defined in Utility actiivty type with 1000rs

        Question –

        Why I have unabsorb amount of rs 10000 in production cost center( transfered from utility cost center and also production order is less charge with 10000rs also?.

        regards

        Sonu

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  2. Amar Lal Lohano

    Hi Rajneesh,

    I am new to CO and found the above document very helpful. Although many concepts are yet to be cleared, which can be achieved after extensive testing. But overall 5 Star from my side.

    Regards,

    Amar Lal

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  3. Sathyaraj Rajagopal

    Hi Rajneesh,

    Thanks for posting such a wonderful document.

    Can anyone share if you have very good documentation on Cost center assessment and distribution with some real time examples?

    (0) 
  4. Akeshkumar Agrawal

    Hi Rajneesh,

    Thanks for details document.

    I have query related to Actual Indirect Activity Allocation

    Below is the case

    Sender

    Cost Center

    X1

    Activity (Cat 2)

    Act2

    Receiver

    Cost Center

    Y1

    Y2

    Activity (Cat 1)

    Act1

    There is value of 10000 on X1 cost center, actual activity confirmation done on received cost center Y1 & Y2 , 100 & 200 hrs using activity type Act1. I have created cycle using KSC1 with single segment.

    Sender value is posted quantity, receiver tracing factor is variable with actual activity qty.

    Now I am executing the cycle using KSC5 for current period so I am getting message “No valid sender entries were found”.

    Please correct me I am going wrong.

    Thanks in advance

    Akesh Agrawal

    (0) 
    1. Rajneesh Saxena Post author

      Hi Akesh

      It is difficult to guess the problem. If you can provide Screen of your configuration, I may try hands on them. If you are able to paste here its good, else you can reach at my email also.

      Rajneesh

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    2. Bhaskar Basam

      Hi Akesh

      If you want to allocation sender values based on actual activity confirmed.. you can run normal assessment/distribution cycle and in the variation portion use actual activity confirmed.

      In the above case Rajneed has explained to allocated the plan quantities where either sender and receiver qty is not available. But you were trying to allocation your service CC to prd CC.

      Regards

      Bhaskar

      (0) 
  5. Akeshkumar Agrawal

    Thanks Rajneesh and Bhaskar,

    i would like to use Actual Indirect Activity Allocation, as Rajneesh given example for Plan. but i need this for Actual. so i am looking example for same as rajneesh did for plan.

    @ bhaskar, that normal process of assessment cycle i know, there are multiple ways to allocate sender values but using indirect activity allocation i want to use in actual.

    I hope this is clear now.

    Thanks

    Akesh

    (0) 

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