What is SAP Cost Center Accounting (CCA)

SAP Cost center accounting is the important component of controlling module as it controls the costs that are incurred inside an organization. Cost center means the place where the costs are occurred. SAP CCA is used to track the costs as per organization departments wise. During creation of cost elements, you need to specify cost center category whether it is a production department or service department or Sales department.

  • The main objective of cost center accounting is to plan, analysis costs and prepare the variance analysis report.
  • When you create SAP cost center accounting, you need to specify cost center standard hierarchy and each cost center is assigned to a cost center hierarchy and profit center
  • To view cost centers data in SAP system at a time, you need to create cost center group and assign a respective cost centers.
  • During month end activities we allocate service department coasts to production departments.

Important components of SAP CO

SAP Cost Center Accounting - SAP CO elements

SAP Cost Center accounting (CCA) configuration

Cost center accounting can be divided in to three master records

  1. Cost center configuration
  2. Activity type configuration
  3. Statistical key figure configuration

The important configuration steps of cost center accounting (CO CCA) in SAP are

  • Creation of cost center
  • Creation of cost elements
  • Cost center categories
  • Cost center hierarchy
  • Cost center group
  • Set planner profile
  • Cost center planning
  • Cost center accounting planned documents
  • Plan distribution cycle.

Cost Center: – It is an organization unit with in a controlling area that represents a defined location of costs occurrence.

Cost Center Category: – It is an indicator in the cost center master record that identifies the activities and performance of a cost center. SAP system delivers with standard categories like administration, production, logistics, marketing, development, etc.

Standard Hierarchy: – It is a tree like a hierarchy structure that groups all the cost centers (Company codes that belongs to one SAP controlling area).

Conclusion: – The implementation of cost center accounting in SAP is mandatory as it deals with the allocation of costs from one cost center to another cost center in controlling area.