FI Related Jargons

1) Cost Element

A component of Controlling (CO) that collects and summarizes postings that arise within CO in a reconciliation ledger.
Cross-company and across business area postings are passed on to Financial Accounting. You can also create cost analyses in the CO applications.

2) Cost Center

By assigning cost centers to organizational objects, you determine where costs incurred by the object are to be charged. The inheritance principle applies: If an organizational object is not assigned a cost center, the cost center assigned to the superior object applies.
An organizational object may also be assigned more than one cost center

3) Profit Center

Distributed Profit Center Accounting enables you to manage your profit center data centrally even when different business transactions are processed in different R/3 systems.

In a given company, sales and production run on two separate systems

4) Internal Orders

Internal orders are normally used to plan, collect, and settle the costs of internal jobs and tasks. The SAP system enables you to monitor your internal orders throughout their entire life-cycle; from initial creation, through the planning and posting of all the actual costs, to the final settlement and archiving:

Implementation Considerations:
Order management within a company usually differentiates between sales-oriented orders, and internal orders. Sales-oriented orders (production or sales orders) are intended mainly for the logistical control of input factors and sales activities. Internal orders are categorized as either:

Orders used only for monitoring objects in Cost Accounting (such as, advertising or trade fair orders)

Productive orders that are value-added, that is, orders that can be capitalized (such as in-house construction of an assembly line).
Internal order management is the most detailed operational level of cost and activity accounting. It can be used for:
Cost monitoring, for example, where costs need to be looked at from object-related aspects, unlike in Cost Element Accounting or Cost Center Accounting
Assisting decision-making, when you need to decide between in-house production and external procurement


COPA is nothing but Profitability Analysis

For the periodic transfer of overhead to Profitability Analysis (CO-PA), start an assessment or an indirect activity allocation at the end of the month. This performs a cycle or several cycles at once. These cycles contain the control information and can be maintained in Customizing in CO-PA.

Cycles for period-based allocation are mainly used in overhead allocation (CO-OM) to allocate cost center costs to other cost centers or to other receiver objects in CO-OM. In the documentation for Cost Center Accounting (CO-OM-CCA), you can find detailed information about the scope of functions for using cycles. This section will concentrate on the special features for using cycles in CO-PA and includes references to the appropriate and more detailed sections in the CO-OM-CCA documentation.