By allocating costs to designated cost centers, SAP Cost Center Accounting (CO-OM-CCA) helps organizations gain detailed insights into where resources are spent, making it easier to control budgets, optimize spending, and improve decision-making across key business units.
This article explores the essential features, benefits, and best practices of Cost Center Accounting in SAP and how it can support effective financial management across an organization.
What is Cost Center Accounting (CO-OM-CCA)?
Cost Center Accounting in SAP is a fundamental component of the SAP Controlling platform that allows organizations to track, manage, and analyze costs within specific departments or business areas. This tool helps companies establish financial accountability, identify cost-saving opportunities, and streamline internal reporting processes.
Key Features and Benefits
Allocating plan costs
With the Cost Accounting module, users can plan all actual allocations that occur within existing cost centers, including assessment, distribution, and activity allocation.
Planning activities and costs
Users can leverage the Cost Accounting module to define organizational targets, plan activities to determine allocation prices, and execute cost-effectiveness checks across the organization. The system also allows users to calculate variances by comparing actual and planned costs, making it easier to correct associated business processes as needed.
Allocating actual costs
The Cost Accounting platform enables users to allocate the actual costs according to their source. The system also distinguishes between transaction-based allocations and period-based allocations, ensuring actual allocations are aligned with business needs.
Entering actual costs
Users can transfer primary costs from other components of the SAP landscape to the Cost Accounting module, including Asset Accounting, Materials Management, and Payroll Accounting. Outlay and other additional costs incurred are recorded using the accrual method within the existing SAP system.
Entering statistical key figures
Users can leverage statistical key figures to determine the right indirect allocation methods and evaluations within their existing information system.
Activity Accounting
The Activity Accounting feature allows users to leverage activities within the cost center as tracing factors for organizational costs, ensuring accurate measurements of operating rates and capacity utilization for critical cost centers.
Information System
The Information System offers intelligent tools that help users analyze core cost flows, execute standard recurring evaluations, and create reports for unique activities across the system.
Considerations for Implementation and Integration
Dividing an organization into cost centers and assigning costs to each cost center allows companies to keep operations aligned with critical business goals and determine where costs are incurred within the organization.
When costs are planned at the cost center level, users can check cost efficiency at the exact point where costs are incurred, making it easier to assign and manage activities and costs associated with relevant products, services, and market segments.
Here are a few key considerations to ensure successful implementation or integration:
Implementation
Cost Center Accounting is typically used with the main aspects of Assets Payable, Assets Receivable, Financial Accounting, and Overhead Orders to ensure successful implementation across business units.
While the Cost Center Accounting module can be implemented without Financial Accounting, some settings, like the chart of accounts and company code, must be made in the Financial Accounting platform.
Integration
The costs of each cost-accounting-relevant business transaction within the system can be assigned to an account assignment object in the Controlling component from the Cost and Revenue Element Accounting module. This involves cost centers, business processes, internal orders, and overhead projects for the management of overhead costs across systems.
Recording, assigning, and managing overhead costs within critical SAP systems allows users to adequately control costs, allocate costs to internal orders, and prepare key information for subsequent areas of the Cost Accounting solution.
How Can We Help?
Whether you need help assessing your current SAP setup to identify key improvement areas, managing key business processes across internal profit centers, or facilitating efficient integrations between SAP and non-SAP applications, Surety Systems is here to help.
Our senior-level, US-based SAP consultants have the skills and experience to handle your critical project needs and ensure your internal teams are prepared for long-term success and innovation.
Contact Us
For more information about our SAP consulting services or to get started on a project with our team of expert consultants, contact us today.
