Large companies using Project System (PS) typically create multiple expense projects to track day-to-day expenses. These expense projects settle to various cost objects during month end. Sometimes accountants create a wrong settlement rule or do not create a settlement rule, and the result is a delay in month-end processing. I show you step-by-step instructions for automating settlement rule generation for expense projects to expedite your month-end closing.

Business Scenario

Before going further into configuration and a working example, I explain a few scenarios in which a settlement strategy for work breakdown structure (WBS) is useful. You can apply the solution I explain in my working example to these scenarios. I defined them to help you understand the circumstances in which you can best use this solution.

In the first scenario, in large companies two different sets of people carry out activities related to creating a project and settling one. A master data team, with input from business managers, usually creates the project, whereas accountants carry out the generation of a settlement rule and the processing of the actual settlement itself — either centrally or locally.

In the second scenario some companies want to control the creation of settlement rule and execution of settlement centrally at the corporate office during month end while they create the project and WBS elements master data locally at each company code.

In the third scenario businesses normally settle the expense project in the month in which the actual expense is incurred. The accountants have difficulty during month end to find the list of WBS elements that do not have a settlement rule. They need to manually create a settlement rule and need to execute the settlement to make sure the balance in the WBS is zero during month end.

In automating the generation of a settlement rule the main step is to configure a settlement strategy.  However, creating the settlement strategy does not ensure 100 percent generation of a settlement rule because sometimes strategy creates settlement rules based on some of the WBS master data fields. Validations in WBS facilitate capturing the required fields in master data to ensure the settlement strategy generates a 100 percent settlement rule for all expense projects. I start with a discussion of the configuration requirements for a settlement strategy.

Configuration Requirements for Settlement Strategy

Internal orders and maintenance orders have a built-in settlement strategy that helps generation of settlement rules automatically during release of internal or maintenance orders. The configuration settings in internal orders control the generation of settlement rules during release.

WBS elements do not have a configuration setup that generates settlement rules during release of WBS or projects. However, SAP has provided a configuration for a settlement strategy that you can use for automatic generation of settlement rules.

Follow IMG menu path Project System > Costs > Automatic and Periodic Allocations > Settlement > Settlement Rule for Work Breakdown Structure Element. The first step in settlement strategy is to determine a strategy for the settlement rule. To create a new settlement strategy, click the execute icon beside Determine Strategy for Settlement Rule. The settlement strategy allows you to create settlement rules based on the WBS master data fields. Defining the strategy enables the settlement strategy program to generate the settlement rule based on the cost objects defined on the master data of the WBS elements. In the settlement strategy screen, click the New Entries button on the left column. Specify the name and description for your strategy. In my example I create strategy Y1 for company code ZABC (Figure 1).

Figure 1

The settlement strategy screen

Highlight the strategy Y1 and click the Settings folder on the left side. This activity opens a new screen in which you select the strategy and corresponding settlement profile (Figure 2). I now explain the radio buttons in Figure 2.

Figure 2

Change view settings for a settlement strategy

You use the first button, billing element under the Billing… column, to generate settlement rules only for those WBS elements that have a billing element checked in master data. The billing element specifies that revenues can be booked to the WBS that is defined with a billing element.

You use the second button, account assignment element under the AA ele… column, to generate settlement rules for those WBS elements that are defined as account assignment elements in WBS master data. The account assignment element specifies that the WBS elements can be charged with costs.

You use the third button, no account assignment (under the No ac… column), to generate settlement rules for those WBS elements that are not defined as billing element or account assignment elements in WBS master data. No account assignment relates to the WBS elements that cannot carry costs or revenues.

The next button (under the Org.cha… column) is used when the WBS element for which the settlement rule is generated has different organizational units from its superior WBS elements. In my example, I use the account assignment radio button, meaning the strategy is for only those WBS elements that are marked as account assignment objects.

In the example, I create the strategy for settlement profile 20 with account assignment category (AcctAssCat) 2 (Figure 2). Click F4 in the Acct Ass cat field to select the value from the drop-down box (Figure 3).

Figure 3

The drop-down box for the account AcctAssCat

The standard SAP system allows the following settlement strategies:

1. Profitability segment: This typically arises for sales-related projects
2. Requesting cost center: This strategy uses the requesting cost center in the WBS master data and creates the settlement rule with requesting cost center as receiver
3. Responsible cost center: This strategy uses the responsible cost center in WBS master data and creates the settlement rule with responsible cost center as a receiver
4. Copy rule from superior object: This strategy copies the settlement rule of the superior object. Level 2 WBS has the same settlement rule of its level 1 WBS.
5. Settlement rule pointing to superior WBS: This strategy normally does not appear in the screen. SAP Note 211324 has to be implemented to make this strategy available in the system. This strategy helps you create a settlement rule with a corresponding superior WBS as a receiver.

As shown in Figure 2, the settlement profile specifies the default receivers and the allowed receivers for settlement. The settlement profile is attached to the project profile and controls the settlement receivers for a particular WBS. I use the standard settlement profile 20, which in turn is attached to the expense project profile ZABC001. In the example, select AcctAssCat as 2, meaning that the settlement rule is generated using the requesting cost center defined in the WBS master data.

The next two settings in Figure 2 are not important for expense projects. They are used mainly for revenue projects with sales orders.

Now assign the settlement strategy to a project profile. Follow IMG menu path Project System > Costs > Automatic and Periodic Allocations > Settlement > Settlement Rule for Work Breakdown Structure Element. Click the execute icon beside Assign Strategy to Project Profile. In my example, I assign settlement strategy Y1 to expense project profile ZABC001 (Figure 4). As I said earlier, the strategy is built on the settlement profile, which in turn is assigned to the project profile.

Figure 4

Assign a settlement strategy to a project profile

The necessary configuration steps for a settlement strategy are now complete. This configuration allows automatic generation of settlement rules by running the settlement rule generation program.

Because the settlement strategy is based on WBS master data, the generation of the settlement rule may fail if the master data does not have the required cost objects. You have two ways to ensure the necessary master data is in place for successful generation of the settlement rule. In the example, I need to make the requesting cost center in the WBS element master data mandatory for all expense projects. There are two ways available to make sure the requesting cost center is entered while creating the WBS master:

1. Method 1 makes the requesting cost center field used in the strategy a required field in WBS element layouts. This method has a disadvantage in case of multiple levels of WBS elements. If there is a business scenario in which multiple levels of WBS are maintained and only the last level of WBS is used for actual postings and other levels for planning, then using this method makes the requesting cost center field mandatory for all levels of WBS. By using the second method you can restrict the requesting cost center mandatory for only the last level of WBS.
2. Method 2 uses WBS elements validation to make the requesting cost center field as mandatory for expense project profiles.

Method 1: Configuration Settings for WBS Layouts

To access field selection for WBS elements use transaction code OPUJ or follow IMG menu path Project System > Structures > Operative Structures > Work Breakdown Structure (WBS) > User Interface Settings. To make the requesting cost center mandatory in WBS element master data, click the execute icon beside Define Field Selection for Work Breakdown Structures. In the Choose Activity pop-up screen (Figure 5), double-click Field selection: WBS Element.

Figure 5

The Choose Activity screen

In the Field Selection screen (Figure 6) click the Influencing button to select the expense project profile to which these settings are applicable.

Figure 6

Field selection settings that control WBS element master data

Double-click Project Profile under the Influencing fields column in the Field Selection screen (Figure 7).

Figure 7

The Field Selection screen

The project profile becomes an influencing field for the field settings. Enter the expense project profile ZABC001 in the Contents field for the project profile (Figure 8).

Figure 8

The project profile

Use the scroll bar and go to the Request cost center row under the Modifiable field column. Select the indicator under the Required (Req.) column for the Request. cost center (Figure 9). This action makes the field mandatory in the WBS element master data for project profile ZABC001. Click the save icon to save the settings.

Figure 9

Make the request cost center field PRPS-AKSTL mandatory in the WBS master data

Method 2: Configuration Settings for Project System Validation

Now I show you how to ensure the requesting cost center is captured in the WBS definition for all expense projects through WBS elements validation. This configuration facilitates 100 percent generation of settlement rules to all expense projects because the strategy is based on requesting a cost center.

Validation is based on a prerequisite. If the prerequisite in the validation is met, the validation checks the conditions mentioned in the check. If the condition in the check is not met, however, the system sends an error or warning message based on the configuration.

Follow IMG menu path Project System > Structures > Operative Structures > Work Breakdown structures > Maintain validations. In the Change Validation screen, highlight the WBS element in the left side and click the Validation button (Figure 10).

Figure 10

The Change Validation screen

In the next screen enter the name and description of the validation. For my example  
create validation ZABC001 for company code ZABC (Figure 11). Press the Enter key.

Figure 11

Create a new validation

After you create the validation name, the name appears under the WBS element in the left side (Figure 12).

Figure 12

Display the new validation name

To create a new validation step, highlight the validation name and click the Step button. A new step (Step 001) appears in the Change Validation screen. Define the prerequisite and check for the validation. Enter the description for the validation step (e.g., Cost center Check) as shown in Figure 13.

Figure 13

Create the validation step

Press Enter. In the next screen highlight the prerequisite and enter the condition for validation (Figure 14). 

Figure 14

Create the prerequisite

The prerequisite in this example is only expense projects, so you input PROJ-PROFL = 'ZABC001’ (the name of my expense project profile) in the area in the right side of the screen (Figure 14). This validation triggers only if this prerequisite is met. If the project is created with profiles other than ZABC001, this validation does not trigger. You can either directly write the prerequisite or select the field name from the table using the tables provided in the bottom of the validation screen (Figure 15).

Figure 15

The table fields in validation

The next step is to create the check. Highlight the Check button that appears below the Prerequisite in the left side and maintain the check that needs to be validated. In my example the check looks for a requesting cost center in the WBS master data provided if the prerequisite of the expense project profile ZABC001 is met. Enter the check as PRPS-AKSTL not equal to blank (Figure 16).

Figure 16

Create the check-in validation

To complete the check, click the message icon. After completing the check, you are ready to create the error message that needs to be populated if your prerequisite is satisfied and the check is not fulfilled. In the next screen highlight the Message button that is under the Check button on the left side. Select the message number that has the appropriate text from the drop-down box. If you create the WBS with an expense project profile without the requesting the cost center, the following error message populates the Message text field (Figure 17): WBS element must be assigned with requesting cost center.

Figure 17

Create a message for validation

Click the Message button on the right side and enter E in the Message type field. Message type E denotes that the message is an error message and that the system cannot allow the creation of a WBS element without correcting the displayed error. Select the message number that needs to be populated. If the required message is not available in the drop-down list, click the pencil icon and create a new message text with the message number. Click the save icon to save the validation (Figure 18).

Figure 18

Save the validation

The next step is to assign the validation in the project profile. To change the project profile, follow IMG menu path Project System > Structures > Operative structures > Work Breakdown structures > Create project profile (Figure 19).

Figure 19

Assign validation in the project profile

Go to the project profile ZABC001 and enter the validation name as ZABC001 under the Control tab in the Validation section. Select the Autom. validation indicator to ensure that all expense projects are subject to validation defined in ZABC001 and that the system does not allow creating expense WBS without requesting a cost center in the master data.

These steps mark the end of the configuration required for automatic generation of settlement rules. Now I show you a working example for generating settlement rules. In my example I use method 2 validations to control the WBS element master data.

An Example of a Settlement Strategy

Before explaining the steps to complete to generate a settlement rule, I show you the project and WBS to use for running the settlement strategy program (Figure 20).

Figure 20

Display of WBS

In my example I create a project ZABC.123 and level 1 WBS ZABC.123.001 using the expense project profile ZABC001. In my example I purposely did not fill up the requesting cost center and tried to save the project and WBS. Because I have not entered a requesting cost center in the WBS definition, the validation sends an error message and does not allow me to save the WBS (Figure 21).

Figure 21

A validation error while creating a WBS element

After you enter the requesting cost center, the system allows you to save the WBS (Figure 22). Now, I explain the program for generating a settlement.

Figure 22

WBS element master data with requesting cost center

The transaction codes for executing the program to generate a settlement are CJB1 and CJB2. CJB1 is for generation of settlement rules for multiple WBS elements based on a selection variant. CJB2 is for generation of a settlement rule for individual WBS elements. I explain only CJB1, and CJB2 is self-explanatory. Most of the companies use CJB1 and schedule the settlement rules as a background job to run periodically.

I create two projects: ZABC.123 with WBS ZABC.123.001 and ZABC.456 with WBS ZABC.456.001 with expense project profiles ZABC001. Both WBS elements are assigned with requesting cost center TEST1000 in the WBS master data.

Now go to CJB1 for generation of settlement rules for multiple WBS (Figure 23). In the initial screen enter the Selection variant, Period, and Fiscal Year. Select the Background Processing and Detail Lists indicators in the Processing Options section. Click the create icon (the one to the left of the pencil icon) to create the selection variant.

Figure 23

The initial screen to generate a settlement rule

To execute the job for multiple projects first you create the selection variant that helps the system determine the projects that need to be selected for a particular job based on the details entered on the selection parameters. Click the Create button (Figure 24).

Figure 24

Select the variant to create

A dynamic selection screen available in the program helps to select the project based on the organization data. To reach this screen, click the dynamic selection icon immediately to the right of the Attributes button (Figure 25).

Figure 25

Maintain the variant

Click the Master data definition folder in the dynamic selection screen (Figure 26).

Figure 26

Master data definition

Find the project profile and double-click it (Figure 27). This action moves the project profile to the right side where you can fill in the details. Fill the project profile as ZABC001. In this example, you plan to input ZABC* in the WBS field to make sure all the WBSs that start with ZABC and have project profile ZABC001 are picked up in the automatic settlement rule generation run. After filling the necessary parameters, click the back arrow button (Figure 27).

Figure 27

Dynamic selection

After you click the back arrow icon, a pop-up box appears (Figure 28). Click Yes to save the selection variant.

Figure 28

Save the selection variant

While saving the variant the system goes to the Variant Attributes screen (Figure 29).

Figure 29

The variant attributes screen

Fill in the description of the variant and then click the save icon. Click the back arrow to go to the Maintain Variant screen. Click the back arrow again to go to the initial screen for generating a settlement (Figure 30).

Figure 30

The initial screen to generate a settlement rule using CJB1

Click the execute icon to execute the program.

In the Job Parameters screen enter the name of the job (e.g., SETTLEMENT STRATEGY) and select the Start Immediately indicator. Click the Confirm button at the bottom of the screen to set up the job (Figure 31).

Figure 31

The Job Parameters screen

After you click the Confirm button, a new pop-up box appears for print parameters (Figure 32). Enter the name of the output device and click the green check mark icon at the bottom of the screen to schedule the job. The job is automatically released.

Figure 32

The print parameters screen

Now use transaction code SM37 and retrieve the job as shown in Figure 33. Enter the job name (e.g., SETTLEMENT STRATEGY) and populate the From and To date fields. Click the Execute button.

Figure 33

The job overview screen

The job appears in the next screen. Select the job and click the Spool button as shown in Figure 34.

Figure 34

The job listed in the overview screen

The spool list screen appears (Figure 35).

Figure 35

The spool list

Select the spool number and select the display indicator. The log is displayed. The log shows the number of records processed; errors, if any; and the details of WBS and the settlement rule generated (Figure 36).

Figure 36

The spool display of the job to generate a settlement rule

To validate the log, use transaction code CJ03 and check one of the WBS settlement rules. Highlight the WBS as shown in Figure 37.

Figure 37

Display of the settlement rule in WBS master data

Click the Settlement Rule button to open the settlement rule screen. You can see the settlement rule now. The cost center in the settlement rule TEST1000 is same as the one that you defined in the requesting cost center field of WBS master data (Figure 38).

Figure 38

The settlement rule

Important SAP Notes and Business Add-Ins (BADIs)

Follow SAP Note 211324 to create a settlement strategy for settlement to superior WBS. You can use Business Add-IN (BADI) WBS_SETTLEMENT_RULE for creating advanced settlement strategies. You can use the interface DETERMINE_STRATEGY in BADI WBS_SETTLEMENT_RULE to create a strategy based on business requirements.