"Purpose of Controlling and Its Integration"

PURPOSE

What's the pupose of Controlling module of SAP? This is a very good question that needs a basic answer and explanation.

Controlling (or Management Accounting) provides information mainly for management decision-making. It facilitates coordination, monitoring and optimization of all processes in a company. This involves recording both the consumption of production factors and the services provided by an organization.

The main task of Controlling is PLANNING. Variances (differences) can be determined by comparing actual data with plan data. The variance calculations enable you to control business flows.

INTEGRATION

Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The data flow between the two components takes place on a regular basis.

All data revelevant to cost flows automatically originate from Financial Accounting to Conrolling. At the same time the system assigns the costs and revenues to difference Controlling account assignment objects, such as cost centers, business processes, projects or orders. The relevant accounting in Financial Accounting are managed in Controlling as cost elements or revenue elements. This enables to compare and reconcile the values from Controlling and Financial Accounting.