Accrual calculation and posting is normally a manual process: You use transaction KSA3 (program RKAZKSA3) to calculate and post accrual values by debiting the cost center and crediting the internal order. The internal order settlement transaction KO8G (program RKO7KO8G) then settles the order to a G/L account, which makes the FI posting. This posting debits the accrual expense and credits the liability account.

You can automate the posting by scheduling batch jobs for these two programs. This automated method is particularly useful for calculating and posting accruals for non-wage labor costs, such as a vacation bonus or annual bonus. It ensures that the system calculates and posts accruals through a single automated process in both FI and CO.

This method provides flexibility to adjust the base accounts for accrual calculation, accrual percentages, and accrual posting accounts based on company policy changes. Other methods, such as recurring entries, offer less flexibility because accruals are first posted in FI and then you have to manually transfer them to CO.

This process represents a tweak to the standard SAP accrual calculation process by automating the FI posting of the accruals. I’ll use a simple example of an accounting entry to show you how to enact this method.

Example Accounting Entry

Cost center 3142 has costs worth $1,000 on which you need to book accruals every month at 8% (Table 1).

301224 is an accrual cost element and 301223 is a settlement cost element for a particular type of accrued cost (Table 2). Because both of these cost elements are primary, they also have corresponding G/L accounts in FI. 121300 is an accrual liability G/L account. ZACC100 is an internal order for company code 100.

Table 2 FI posting of accrued costs

To post the accrued costs in FI and CO by this method, you need to complete two steps:

Step 1. Execute accrual calculation program RKAZKSA3 for cost center 3142 and the relevant period. Post the entry shown in Table 1 in CO only. You can see accrued costs of $80 at the cost center level.

Step 2. Execute internal order settlement program RKO7KO8G for internal order ZACC100 for the relevant period. You post the entry in Table 2 so that the accrued cost reflects in FI at the company code 100 level.

The system now shows the accrued cost in cost element 301224 at the cost center level and in G/L account 301223 at the company code level. The balance in accrual cost element 301224 at CO area level is zero per Table 1, so it is used only for internal cost center-wise reporting in CO. The external company code-wise reporting of accrued costs in financial statements is through G/L account 301223.

Master Data Requirements

You need to satisfy three principal master data requirements.

• Primary accrual cost elements of category 03. You can only use primary cost element of category 03 for accrual calculation in CO when you are using the percentage method. You would use these for a CO-only posting in accrual calculation (e.g., 301224). You then need to define the corresponding G/L accounts in the chart of accounts. You can block these accounts for posting in FI because the system should only post the corresponding cost element in CO.
• Primary settlement cost elements of category 22. You use the cost elements of this category to settle order costs to objects outside of CO, such as assets, materials, or G/L accounts. In the accrual posting process, you can use these cost elements to settle accrued costs to G/L accounts. You need to debit these during the settlement of the internal order to the accrual liability account (e.g., 301223). You should define the corresponding G/L accounts in the chart of accounts and should not block them for posting.
• Internal order of category 02 for accrual calculation. You use internal orders created with this category exclusively to monitor period-related accrual calculation between expenses posted in FI and the costing-based costs debited in Cost Accounting. You need to create an internal order for every combination of company code and type of accrued cost (e.g., ZACC100) (Figure 1). You need to maintain the liability G/L account as a receiver (Settlement Receiver column) in the internal order settlement rule (e.g., 121300) in transaction KO01.

Figure 1

Maintenance of internal order settlement rule

Process Configuration

You need to follow three basic steps in the main configuration nodes for accrual calculation and posting process.

• Step 1. Maintain overhead structure
• Step 2. Maintain allocation structure
• Step 3. Maintain settlement profile

Step 1. Maintain overhead structure. Use transaction code KSAZ or follow menu path Controlling > Cost Center Accounting > Actual Postings > Period-End Closing > Accrual Calculation > Percentage Method > Maintain Overhead Structure (Figure 2).

Figure 2

Maintain Overhead structure

The overhead structure contains the following components, which program RKAZKSA3 uses for accrual calculation and posting.

• Base. Include the base G/L accounts/cost elements representing the cost center-wise costs on which the system calculates the accruals (Figure 3).
• Overhead Rate. Maintain the percentages that the system applies to the base for accrual calculation (Figure 4). While creating the Overhead rates, choose the dependency as BKR2-Controlling Area/Company Code. This allows you to maintain the rates for every company code.
• Credit. Maintain the accrual cost element (category 03) and the internal order which you credit during accrual calculation postings (e.g., 301224 and ZACC100), respectively (Figure 5). You should maintain these details for every company code.

Figure 3

Base Cost Elements in the overhead structure

Figure 4

Figure 4 Maintenance of accrual rates in the overhead structure

Figure 5

Credit key in the overhead structure

Step 2. Maintain allocation structure. Use transaction code OKO6 or follow menu path Controlling > Internal Order > Actual Postings > Settlement > Maintain Allocation Structures (Figure 6).

Figure 6

Allocation structure for internal order

In this structure, the system maintains the accrual cost element (301224) and settlement cost element (301223). The configuration in this structure and the settlement rule in the internal order master determine the postings during settlement. You assign the allocation structure to the settlement profile of the internal order type created for accrual.

There are a couple of important features in this allocation structure.

• Source. The system maintains accrual cost element 301224 as the source (Figure 7). The system settles the accrued costs that were posted to this cost element during accrual calculation (RKAZKSA3) to the G/L account or the settlement cost element.
• Settlement cost elements. The system maintains the settlement cost element (category 22) and the G/L account (301223) (Figure 8). The system debits this G/L account and this settlement cost element during internal order settlement program RKO7KO8G. The system uses these types of primary cost elements of category 22 for settlement outside CO, such as to the liability G/L account 121300.

Figure 7

Source cost elements in allocation structure

Figure 8

Settlement cost elements in the allocation structure

Step 3. Maintain settlement profile. Use transaction code OKO7 or follow menu path Controlling > Internal Order > Actual Postings > Settlement > Maintain Settlement Profile.

Create a settlement profile with the allocation structure defined in step 2 (Figure 9). Assign this settlement profile to the order type created for accrual order category in customizing transaction KOT2_OPA. This configuration allows you to settle the internal orders in summary to the liability G/L account (121300) maintained in the internal order settlement rule.

Figure 9

Settlement profile for accrual internal order

Reports

You can see the cost center-wise accrued costs in a cost center line item report, such as KSB1. Query this report by entering the accrual cost element only in the selection screen (Figure 10).

Figure 10

Cost center line item report for accrual cost element

You can see the company code-wise accrued costs details by querying the internal order line item display report such as KOB1 for the settlement cost element (Figure 11). Also, you can see the FI postings in a G/L account line item display report such as FBL3N.

Figure 11

Internal order report for settlement cost element

Kedar Muzumdar

Kedar Muzumdar is an SAP-certified FICO consultant and a chartered accountant (CA) from the Institute of Chartered Accountants of India. He has been working as a principal consultant on SAP implementation, upgrade, and support projects involving the new GL, AP, AR, material ledger, product costing, cost object controlling, and profitability analysis for the past nine years.

You may contact the author at kedar19792001@gmail.com.

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