Domain: Finance Data & Reporting

Responsibility area: Maintain Costing Master Data

1. Objective and Scope

1.1. Objective of this Operation

There are 2 main cost centers hierarchies to be maintained in SAP:

The Standard hierarchy
The ZCBS hierarchy

The aim of this procedure is to explain how to create/update a group in a cost centers hierarchy

1.2. Scope

All entities in WP2 & PF2

2. Definitions

See Finance - Glossary

3. Tasks description

3.1. I receive the request to create/update a cost center hierarchy

I am informed that a cost center hierarchy must be amended. It can happen when:

There is a new cost center and its standard group doesn't exist: for instance in WP2, in each legal entity, SG&A cost centers are included in a group that is dedicated to the GBU and may be used in assessment cycles. When there is a new GBU in a legal entity, a group needs to be created for the GBU,
A new type of cost centers is created in a legal entity: for instance when it is the first a cost center is created for restructuring costs in a legal entity,
When there is a new organization: for instance a new GBU is created, a new department is created,
In the frame of a project: for instance SAP roll-out, carve-out...
...

The request can be done through the PRS workflow, Service one or in the frame of a project.

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

For the standard hierarchy: As long as the request is standard and follows the rules describe in the following section, the new group can be created without prior validation.
For the ZCBS hierarchy: the request should be done or approved by the dedicated controller: CBS controller (for all groups created in SCBS-CORPO, SCBS-FUNCT, SCBS-ICO, SCBS-PROJ) , GBU controller (for all groups created in RDD, EMSV, EADM), SU MAC for all other groups

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

When a group is created in the standard hierarchy, it must be consistent with the standard rules in WP2 or PF2:

The code of the standard hierarchy in PF2 is KCHEF_HIER and it is structured in 2 main sub-groups:

CC_ORGANIS
CC_CHEOPS

The group CC_CHEOPS was used for reporting cost centers. These cost centers are not used anymore.

In other words the group CC_CHEOPS should not be used anymore and all active cost centers should now be included in the group CC_ORGANIS.

The group CC_ORGANIS is only harmonized until the plant level, afterwards it is free for every site.

CC_ORGANIS

XX - Country
- E_CCCC - Company
  - CCCC_PP - Site
    - PPP - Plant
      - Cost center 1
      - Cost center 2

XX = Country code

CCCC = Company code

PPP = plant code

PP = First 2 digits of the plant code

In WP2, there is one standard hierarchy per Controlling Area

The structure must follow the standard rule:

Zxxx = Controlling Area

PPPP = Plant code

CCCC = Company code

GB = GBU code

CB - Corporate Business Services
CM - Composite Materials
CS - Novecare
OG - Oil & Gas
PA - Aroma Performance
SP - Specialty Polymers
TS - Technology Solutions

The group PPPP-FUNCT is only used by the GBU Novecare

When a group is created in the ZCBS hierarchy, it must be consistent with the standard rules:

ZCBS is the code of the alternative cost centers hierarchy that is mainly used for reporting purposes (ex: Co$ta - Reports , Fixed costs ).

You can display the ZCBS hierarchy:

in SAP using the transaction KSH3 - Display cost center hierarchy

You can also use the report FC - Cost centers master data to display all cost centers with their assignment in the hierarchy ZCBS.

All active must be assigned to the lowest level in the hierarchy so that the full ZCBS levels are properly shown for the related cost center.

A cost center in included in ZCBS according to the following principles:

1. There is a direct link between the first level of the ZCBS hierarchy and the Activity 1
2. There is a direct link between the first (or second) level of the ZCBS hierarchy and the P&L
3. There is a direct link between the lowest level of the ZCBS hierarchy and a BSA

1. There is a direct link between the first level of the ZCBS hierarchy and the Activity 1

CBS cost centers

All cost centers included in the groups SCBS-CORPO Corporate Function & SCBS-FUNCT FUNCTION SERVICES are assigned to the Activity 1 CBSS in WP2 (=IECRA00569) and PF2 (=DIV 50 or =BA 8500).
Cost centers included in the group SCBS-ICO INTERCOMPANIES are assigned to the Activity 1 CBSS in WP2 (=IECRA01148) and PF2.

Non allocated cost centers

All cost centers included in the group SCBS-OTH CBS NON FUNCTION COSTS are assigned to the Activity 1 CBNR in WP2 (=IECRA00450) and PF2 (=DIV 59 or =BA 8590).

GBU cost centers

All cost centers included in the group ENTRP ENTERPRISE are assigned to a GBU.

There can not be cost centers allocated to CBS included in the group ENTRP.

Other groups

The group RHXXX TECHNICAL COST CENTERS is used for technical cost centers (not reported in fixed costs report)
The group DISC DISCONTINUED is used for cost centers that are blocked
The group ZNS-FUNCT NON SOLVAY - FUNCTION SERVICES can be used for entities sold when they want to keep working with a fixed costs report with their own groups

Group ZNS-FUNCT

Currently, the group ZNS-FUNCT does not exist in WP2 or PF2 because it doesn't need to be maintained.

2. There is a direct link between the first (or second) level of the ZCBS hierarchy and the P&L

CBS cost centers

All cost centers included in the group SCBS-CORPO Corporate Function & SCBS-FUNCT FUNCTION SERVICES are allocated to R33400 Shared service function expenses (origin)
All cost centers included in the group SCBS-ICO INTERCOMPANIES are allocated to R33200 Shared services function costs invoiced

Non allocated cost centers

Cost centers included in the group SCBS-OTH CBS NON FUNCTION COSTS : they will be allocated to corresponding BFC headings depending on its destination (ie: Administrative or Commercial expenses, Other recurring operating income/expenses, etc)

GBU cost centers

The allocation of cost centers included in the group ENTRP ENTERPRISE depends on the type of costs:

ZCBS group	Definition
EPRD	All production cost centers should be included in the group EPRD: Indirect production cost centers (PPPP-2 in WP2) should be included in a group EPRD1=>EPRD6. Utilities cost centers should be included in the group EPRD4Y in PF2 only. In WP2 they are included in the group ECP) Direct production cost centers (PPPP-1 in WP2, EE32xxxxxx in PF2) should be included in the EPRD0: EPRD0X when the production cost center is not mixed (all cost centers in WP2 and some cost centers in PF2) EPRD0Y when the production cost center is mixed (only in PF2) EPRD0Z can be used to manage underactivity (only in very specific cases) => Definition of Period non-proportional costs of production (R25460)
EADM	This group is used for cost centers allocated to the BFC account Administrative expenses (R33310) A GBU can request the creation of sub-groups to detail its own organization.
EMSV	This group is used for cost centers allocated to the BFC account Commercial expenses (R33320) A GBU can request the creation of sub-groups to detail its own organization.
RDD	This group is used for cost centers allocated to the BFC account Research and Development (R360) A GBU can request the creation of sub-groups to detail its own organization.