What are the cost elements?

SAP cost elements

 

Definition:

The cost element is the subject used in the CO module to record the fee, that is, the subject associated with the fi, and there is a difference. These two modules are interrelated through the primary cost elements.

Category:

The classification of cost elements is mainly based on whether or not they are associated with the fi module. They are divided into two categories:

Primary cost elements and secondary cost elements.

 

 

Primary cost elements and secondary cost elements. In addition to timely integration of general ledger, SAP also features timely integration with the control module. All expense accounts in all general ledgers in SAP are required to be created as primary cost elements. In this way, when you enter a general ledger expense entry, the system requires you to enter a cost center, that is, the system has allocated the primary cost element to a certain cost center. That is to say, the general ledger and the control module must meet the requirements at the same time through one entry. This is the seamless integration of SAP. Of course, only the amount of this element in the control module, rather than the amount recorded in the general ledger, is achieved through bilateral entries. Therefore, the cost report of a certain cost center is the summary of each primary cost element. The cost element of a cost center can be organized into a secondary cost element (project) and allocated to different cost centers through a certain proportion. The control module reflects the internal and external capital flows of an enterprise through these two elements. In SAP, the primary cost element is similar to the coprocessor, which can be allocated to any cost center, including the legal cost center, that is to say, different cost centers may have identical primary cost elements, but different amounts.

 

The cost elements are divided into primary cost element and secondary cost elemnet. Primary cost element generally corresponds to expense subjects and is used to collect all expenses incurred on the cost center, secondary cost element is used to track production costs.

The cost center can be understood as the cost classification.

The cost center is a type of cost object and the receiver of the cost. similar to the subject, the cost element is the subdivision of the COST project (Cost/cost category. the secondary cost element is usually used for CO Internal carry-over allocation.

The cost center and cost elements are two completely different concepts! The cost center is used to collect costs! The specific cost element refers to the specific cost items!

The cost center is the entity that generates costs (such as departments or workshops in the company), and the cost element is a classification of costs, that is, what is the cost (cost) spent, if you pay for water and electricity, water and electricity are a cost element, which can be divided into primary cost elements (or primary cost elements) and secondary cost elements (or auxiliary cost elements ), the translation may be different. The English letters are primary cost element and secondary cost element.

For example, if the Ministry of Personnel buys a new batch of office supplies, the department of personnel can be defined as a cost center, and the management expense-office supplies can be defined as a cost element.

The primary cost element corresponds to a cost or expense subject in the Financial Accounting general ledger. After appropriate customization, the financial accounting system requires that you enter an account allocation object, this should be a cost center accounting object (may be a cost center, internal orders, etc.). When the accounting is successful, the system will automatically create a credential in the CO module, the cost is automatically recorded to the debit of the corresponding cost factors of the cost center or internal order. In the future, you can query the operating costs and profitability of a cost center through reports.

The secondary cost element is used for internal settlement between internal departments of the enterprise. For example, the IT Department prepares a section for the finance departmentProgramIn order to calculate labor costs between different departments, you can set a "Program Development" sub-cost element, and then manually keep the account in the accounting module of the CO cost center, credit IT department (sender cost center), debit Finance Department (recipient's cost center ).

The cost element is to record what happened (what), and the cost center is to record where occurred (where)

Directly literally, the cost element is all aspects of the cost, and the cost center is the recipient of the cost.