How to do Internal Order Accounting in SAP FICO
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:
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
An enterprise’s internal orders can be used for different controlling purposes. For more information, see Classified by Controlling Objectives .
You can use master data to assign certain characteristics to your internal orders, which enables you to control which business transactions can be used with the internal order.
Internal order planning enables you to roughly estimate the costs of a job before the order starts and to make an exact calculation at a later date. You can choose between various planning approaches to compare the effectiveness of different methods.
You can assign and manage budgets for internal orders.
You apply the actual costs incurred by a job to your internal orders using actual postings. In Financial Accounting, you can assign primary cost postings (such as the procurement of external activities and external deliveries) directly to internal orders.
In period-end closing you can use various different allocation methods (for example, overhead costing) to allocate costs between different areas of Cost Accounting.
Order settlement enables you to transfer the costs incurred by an order to the appropriate receivers.
The information system for internal orders enables you to track planned and assigned costs on your orders in each stage of the order life-cycle.
You can archive internal orders that you no longer require.