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Settlement - Allocation strucure customization

former_member301510
Contributor
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Hi Experts,

It’s been long time I worked in RA and settlement process for projects in PS.

I am simulating RA and settlement with a Cost based POC method.

I have configured RA (OKG1, OKG2, OKG3, OKG4 and OKG8) but stuck in allocation structure customization.

When I am running project settlement (CJ88), the system is throwing errors.

G/L account 900101 1000 does not exist,

G/L account 900010 1000 does not exist,

G/L account 900010 is not defined in company code 1000

Those errors look straight forward but those are not.

We tried to maintain company code data also in those cost elements with account type 'P' but the system is not allowing to maintain company code data with category 31.

I got to know from SAP that I am using the settlement by cost element in assignment 50 of allocation structure Z1. That is not recommendable in my scenario as the secondary cost elements 900101 and 900010 are maintained for COS/Revenues/Revenues in transaction code OKG4.

Cost elements with G/L account type S are available in controlling, only.

The recommendation is using a settlement cost element with G/L account type P or X in assignment 50 of allocation structure Z1.

But I am still confused.

One side, I am maintaining a GL as a receiver in settlement rule. Other side, I need to maintain a settlement cost element in allocation structure configuration.

How and where the accounting entries will hit using a separate settlement cost element???

Please follow the attached screen shots and suggest me.

Regards,

Sandeep

sdn-settlement-page0001.jpg

sdn-settlement-page0002.jpg

sdn-settlement-page0003.jpg

sdn-settlement-page0004.jpg

sdn-settlement-page0005.jpg

Accepted Solutions (1)

Accepted Solutions (1)

kenmelching
Active Contributor
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Without COPA, hmmmmm, you do not technically have to settle anywhere but with RA you do have to run settlement. I would try a settlement profile without a receiver and see if settlement works. If not you will have to look at settling to a Cost Center, the FICO people can help with that.

Settling to a G/L account is not correct for a POC scenario. Settling to a G/L is for capital or WIP scenarios.

OKG8 is used during the settlement, remember with RA there are 2 processes running during settlement. The first is the normal settlement to a receiver. The second is the RA Transfer to Accounting.

Keep in mind what POC RA is doing, it is adjusting Revenue on the P&L based on the actual costs incurred. The costs need to stay on the P&L hence you would not settle costs to a G/L account.

former_member301510
Contributor
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Thanks Ken.

1. Settling to a G/L account is not correct for a POC scenario. Settling to a G/L is for capital or WIP scenarios. - The Cost based POC RA method calculates Reserves (Revenue in excess of billings) or WIP (Revenue Surplus) so there is a WIP. Isn't???

2. The first is the normal settlement to a receiver. The second is the RA Transfer to Accounting. - By second you meant, WIP/Reserves from RA gets settled to FI using OKG8?? And by first, you meant the final settlement to a receiver using settlement rule?

Regards,

kenmelching
Active Contributor
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You don't settle to a G/L account on the settlement rule because the OKG8 settings do that during the settlement run. Cost Based POC will leave all costs on the P&L (no costs are transferred to the Balance Sheet as WIP) and will either create revenue (Unbilled Receivable on the BS, an asset) or defer revenue (Deferred revenue on the BS, a liability).

former_member301510
Contributor
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Thanks Ken.

SAP replied:

Please notice that cost of sales (result analysis category COSR, ABKAT 63) are relevant for settlement. Please check settlement profile ZPS001 (SITE - Sett. Prof. Custom Proj) where “Actual Costs/Cost of Sales” has been maintained as to be settled in full. Therefore, a settlement rule for actuals and/or cost of sales is necessary.

Regards,

I cannot attach more documents here so I must raise a fresh Question to know a complete process along with required configuration. There, I will attach all screen shots.

Answers (4)

Answers (4)

former_member301510
Contributor
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Thanks Paulo and Ken.

I am closing this issue and will raise a new all together with specifying exact queries.

Regards,

kenmelching
Active Contributor
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I think Paulo is correct that you are mixing up your processes.

With Cost Based POC the actual costs that post to the project do not leave the P&L. RA will write it's results to the RA Cost Elements you have configured (Type 31). When you run settlement you should be settling to a COPA receiver not a G/L account. Your allocation structure will include the RA Cost Elements as the input and a settlement cost element (type 21) as the settlement cost element. I've never tried settling by cost element with RA, I don't think it will work.

Then there is the second part of settling RA the Transfer to Accounting with G/L accounts that do not have cost elements.

former_member301510
Contributor
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Thanks Ken.

Please help me to understand:

1. What about if there is no COPA? I believe, a GL (Account type - Balance sheet) would be receiver.

2. If the receiver type here is GL, the category of settlement cost element would be 22. Right???

3. What is the exact purpose of OKG8? How and when the entries hits to those GLs maintained in OKG8?

4. Where the RA data gets settled during period end and year-end?

Regards,

Sandeep

Paulo_Vitoriano
Active Contributor
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Hi Sandeep,

I got a feeling that you are confusing Results Analysis/WIP functionality and settlement functionality.

Settlement does the posting for RA/WIP, but otherwise it is a different/independent process.

SAP just bundled the RA posting into the settlement procedure like to kill two rabbits with one shot, and not to create a separated RA settlement into FI.

You never settle WBS to WIP GL account. Investment project will settle to AuC and customer project will settle to COPA (normally).

Regards,

Paulo

former_member301510
Contributor
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Thanks Paulo.

Please help me to understand:

1. What about if there is no COPA? I believe, a GL (Account type - Balance sheet) would be receiver.

2. What is the exact purpose of OKG8? How and when the entries hits to those GLs maintained in OKG8?

3. Where the RA data gets settled during period end and year-end?

Regards,

Sandeep

Paulo_Vitoriano
Active Contributor
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Hi Sandeep,

1. Please clarify what type of project you are dealing with? It can be investment or it can be a customer project. Without COPA customer project does not need settlement, it just represents a project P&L statement on its own.

2. OKG8 are FI posting rules in case you need to do FI postings based on the RA calculations. The posting happens during settlement, but can be simulated during RA.

3. RA data does not need settlement, it is calculated or adjusted at the period end. RA data and settlement are two different processes.

Regards,

former_member301510
Contributor
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Hi Paulo,

1. It is a customer project.

2. I had same idea but it is not happening. On executing CJ88, the system is always looking/asking settlement rule of the sender.

"Message no. KD205 - Maintain the settlement rule of the sender"

Any idea?

I read this also,

https://help.sap.com/viewer/5e23dc8fe9be4fd496f8ab556667ea05/1809.002/en-US/68cbd8530439414de1000000...

There, it is clearly mentioned that If you perform results analysis using the POC method, you can make postings for the following results analysis data to G/L accounts in Financial Accounting by period. We define posting rules for the RA data (Reserves and WIP).

3. If no settlement, how the system would settle WIP (Revenue in excess of billings) or Reserves (Revenue surplus) generated from RA?

As you said and also, If I go by SAP help, Revenue surplus and Revenue in excess of billings hits to P&L (Income statement).

https://help.sap.com/viewer/5e23dc8fe9be4fd496f8ab556667ea05/1809.002/en-US/31cbd8530439414de1000000...

One more thing, my RA process is running fine and I understand the calculation and values. I am stuck in settlement entries and its configuration part.

Regards,

Paulo_Vitoriano
Active Contributor
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Hi Sandeep,

You have many different questions mixed up in this post!

GL account is the external receiver from CO perspective, therefore you cannot use original cost elements specially for secondary cost. You need a cost element of category 22.

Regards,

Paulo

former_member301510
Contributor
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Thanks Paulo for your quick understanding and response.

I got that idea.

E.g. Entries posted by RA are

Cost Effecting Net Income (900101) - 20000 USD,

Revenue Effecting Net Income (900010) - 33333(-) USD

Profit = 33333 - 20000 = 13333

Whereas, the new CE with category 22 is 999999.

After settlement, the entries would be:

Receiver (GL):

Dr. WIP (904400), with CE 999999 - 13333 USD

Sender (WBS):

Cr. Cost Effecting Net Income (900101) - 20000 USD

Cr. Revenue Effecting Net Income (900010) - 33333(-) USD

I was bit confused here.

But, I believe its clear now; the balances lying in those cost elements will be nullify when WIP will be capitalized as a result of Final settlement.

Correct me if I am wrong.

Regards,

Sandeep