Controlling Area in SAP

ADHARSH K S
Sep 23, 2023
3 min read

Updated: Oct 3, 2024

Controlling is a module in SAP that helps Planning, Managing, Analyzing and Reporting related to Costs and profits. It is used for Internal Reporting purpose and for management's decision making purposes.

In 'General Controlling' under CO :- Configure Organization Structure of Controlling which includes to maintain CO Area and define ledger for CO version.

Path: SPRO > IMG > Controlling > General Controlling> Organization

In IMG Screen:

Controlling Area:

⦁ A Controlling Area(CO Area) is the highest organizational level used for Cost accounting purpose. It is used for management of Costs and profits.

⦁ Multiple Company Codes can be assigned to Same Controlling Area with multiple Currency but using Same Operative Chart of Accounts.

⦁ All the companies using the same controlling area should use the same Chart Of Account and Fiscal Year Variant.

⦁ The Controlling Area is a fundamental element in SAP CO and is closely integrated with SAP FI.

⦁ You cannot remove Company code already assigned to Controlling Area, if already created master data in it.

To Maintain CO Area (Using T-Code OKKP ) :

Path: SPRO > IMG > Controlling > General Controlling> Organization>Maintain Controlling Area.

STEP 1: Select New Entries or Copy CO Area

Either Create New CO Area by Selecting 'New Entries' tab

or Copy from Standard CO Area "0001" provided by SAP by selecting 'Copy As..'

STEP 2: To create CO Area first fill all the mandatory* Basic fields.

1. Controlling Area : Select your Company Code

Here, CO Area = Company Code which Uniquely identifies CO Area and also provide a Name for your Controlling Area.

2. CoCd>CO Area : If you choose -

Controlling Area same as Company Code: which mean only one company code to a Controlling Area.

Cross-Company Code-Cost Accounting: You can assign multiple Company codes (which use the same Fiscal year variant and same Chart of Accounts) to same CO Area.

3. Currency Type & Currency : The CO Area currency type determines which currency is allowed as CO Area currency and whether the CO Area currency can differ from the currency of the assigned company codes. Currency like INR, USD, EUR etc., in Currency Field.

4. CCtr Std. Hierarchy : Cost Center Standard Hierarchy is a structured arrangement of cost center group and cost centers within an organization.

STEP 3: To Activate Cost Center Accounting(CCA).

1. Fiscal Year : A time period (usually 12 months) for which a company is required to provide its physical inventory count and balance sheet.

2. Cost Center Component Active:

If Component is active : The Cost Centers are validated and can be used as account assignment objects.

If Component is not active : The Cost Centers are not validated and cannot be used as account assignment objects

STEP 4 : Assignment of Company Codes to CO Area (can also use T-Code OX19 )

In this step you assign the Company Codes for which you want to carry out common cost controlling to a CO Area.

You may carry out cross-company-code cost accounting only by assigning the company codes to a controlling area.

Define Ledger for CO Version:

CO Version - This enables to record and manage different set of plan data and actual data. When you create a CO Area, the SAP system automatically creates "version 000" valid for five fiscal years. Actual primary cost data entry and actual data from internal activity allocation all post to version 000.

To assign G/L ledgers to CO versions - either select New Entries and create new or Copy from Standard CO Area '0001'.

In this activity, you assign G/L ledgers to CO versions. This means that controlling will then read the Actual data (postings) from the G/L ledgers you specify here.

CO versions must be assigned to Leading ledger (0L) and Save it, not to any extension ledger.

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