1. Objective and Scope

1.1. Objective of this Operation

The aim of this procedure is to explain how to create a cost center.

1.2. Scope

All entities in WP1& PF1

2. Definitions

See Finance - Glossary

3. Tasks description

3.1. I receive the request to create a cost center

I am informed that a cost center must be created.

3.2. I confirm that the request is made by an authorized requester

Check that the requester is an “authorized requested” in document “PLANT COSTING CONTACTS”.

This list is maintained by the Process Expert Costing.

Besides this list, Reporting (different from “PIF level”) as well as some “auxiliary” cost centers can be requested by the FSL, Country Manager or the CAM. It is also applicable for small companies that do not have a Controller.

3.3. I analyze and validate the information provided in the request

3.3.1. I take charge of the request

3.3.2. I validate that all mandatory fields are informed

3.3.3. I validate the need of a new cost center

Validate that the need behind the request is a cost center, and cannot be fulfilled with another cost object (project (=WBS), internal order, …).

Validate that the need cannot be fulfilled with an existing cost center.

A cost object (and thus a cost center) must be “single” in SAP : 

• unique codification
• unique description (both short and long) and object within a plant.

An asset must be linked to a cost center. Thus no other cost object can be used when an asset in involved.

Payroll accounting is based on cost centers. Thus no other cost object can be used when payroll is involved.

Analyze answers to the following questions :

• Purpose of the requested Cost Center?
• Requested Cost object to be used for asset or payroll ? If yes, it validates the need of creating a cost center as a cost object.
• Requested Cost object only to report costs linked to a project ? If yes, a WBS should be suggested.
• Yearly foreseen amount > threshold defined by PE Costing ? The amount entered gives 2 types of information :
  
  • It impacts the degree of urgency with which the action is required : a significant amount means the request should probably be processed before next closing.
  • In case of a non-significant amount, we should challenge the creation of a cost center, and suggest an internal order as a cost object.

• Check in SAP : no pre-existing Cost Center to fulfill the need ? Check for the existence of a compatible C.C. in the same plant. 
  
  • Use KS13 - Cost center: Master data report to display similar cost centers

3.3.4. I perform the controls

3.3.5. I challenge the creation of the cost center

“Return” the workflow request with your comment:

• suggesting another cost object, 
• suggesting an existing cost center, 
• informing that his/her need does not seem a cost center
• asking for further information.

If mandatory information is missing, or inconsistency is found:  ask for further information. 

3.4. I create the new cost center

3.5. I communicate that a new cost center has been created

I notify the Assessment Cycle Owner maintenance

I notify the requester