Accounting consists of financial accounting (Financials) and management accounting (Controlling). Financial accounting is intended for legal reporting and involves creating G/L accounts at company level. Financial accounting is different for each country and is determined by law.

Management accounting involves information regarding costs and revenues and is intended for internal management. You can use management accounting to analyze costs and revenues at a higher level, for example at country level – you could create a cost estimate for a product that is manufactured in several plants in several countries. There is no legal requirement for management accounting. Posted costs and revenues in financial accounting are used in management accounting. In management accounting, you can allocate those costs across several (financial accounting) boundaries.

It is advantageous to ensure that the results in management accounting can be compared with the results in financial accounting (reconciliation). Both financial accounting and management accounting are automatically reconciled to offer one consistent accounting perspective.

Note

Vehicle Sales and Service (VSS) is completely integrated with Controlling and Financials

Prerequisites

You have made the organizational settings for Financials and Controlling. You have created the relevant master data, as well as the interfaces to VSS (for example, account assignments).

Features

In reporting, you handle postings and check the order objects. You trigger and monitor the value flow in controlling, for example, posting consumptions and order settlements. You can collect costs and revenues in the order and settle them at the next level. As a result, the contribution margin can be calculated on level order or higher.

Example

In the internal order of a an External Service Order, you collect the following costs:
- The labor cost of the vehicle repair
- Material consumption – the costs of any spare parts
In the header internal order of the external service order, there is the following revenue posting:
- Automatic account assignment ensures SD billing documents are posted for items relevant to the external service order
Reposting for the billing document:
- The object control framework triggers the reposting. The revenue (from the billing document) plus the costs belonging to the billing document are intended for the second level (level 2) of the order (see Value Flows for Service Orders). At this level, internal orders are also used; specifically, one for each bill-to party that is significant in the event of an order split.
- In Customizing, you can decide whether you use internal orders that are generated individually for an order type (valid only for this external service order) or collective internal orders at this level.
Resulting balance:
- Since all costs are always reposted to the internal orders of the second level together with the sales of the internal order of the external service order, the balance of the header internal order after the last billing document is always zero. Any balance remaining on the order represents work in process (WIP).

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