Primary cost element in SAP controlling module mirror to the profit and loss accounts set up of general ledger in the financial module.
Primary cost Element in SAP is used as the vehicle to transfer expenses from the Financial module to Controlling module. If there is no primary cost element set up for a specific P&L account on the general ledger, then expenses will not flow from Financial module to Controlling.
For this reason, in practice, all P&L accounts on the general ledger are usually set up as primary cost element in SAP CO module based on requirements.
There are two methods for creating Primary Cost Element in sap CO:
- Creating manually, and
- Creating automatically by using standard SAP program.
While creating primary Cost Elements in sap, the user has a choice of method depending on the situation. While creating secondary cost elements the user usually use the manual method since secondary cost elements do not always mirror General Ledger accounts in FI.
Auto Creation of Primary Cost Element in SAP
Make default settings
SAP Path: Controlling > CE Accounting > Master Data > Cost Elements > Automatic Creation of Primary and Secondary Cost Elements > Make Default Settings
Put the Chart of Accounts and press enter
Then enter the“Account from”, “account to” and category as 1
Click on SAVE
Creating with Batch input session in SAP
SAP Path: IMG> Controlling > Cost Element Accounting > Master Data > Cost Elements > Automatic Creation of Primary and Secondary Cost Elements > Create Batch Input Session
Enter the controlling are, valid from and to field, session name and batch input user. Now click on execute.
The system will process the program and generate a list of General Ledger accounts for which it will create cost elements based on your default data entered.
Execute batch input session to create Primary Cost Element
IMG> Controlling > Cost Element Accounting > Master Data > Cost Elements > Automatic Creation of Primary & Secondary Cost Elements > Execute batch input session
Mark your session name and click on the <Process> button.
By processing the session with this option (display errors only), the system will only stop processing when it encounters an error. If an error occurs, the program will stop processing and wait for user intervention to correct the error before continuing. This method of processing is helpful in a project environment for trouble shooting purposes. In most productive environments where larger jobs are created, background processing is usually selected.
When the session has been completed successfully, it will return the message: “Batch input processing completed”.
Manual Creation of Primary Cost Elements in SAP
Instead of auto creation of primary cost element, if you opt to create it manually then please follow below steps.
Path: Accounting > Controlling > Cost Center Accounting > Master Data > Cost Element > Individual Processing > Create Primary Cost Element
T Code: KA01
Enter values as follows:
- Cost element – per table below
- Valid from – 01/01/XXXX to 12/31/XXXX
Click <Master data> icon
On the Tab ‘Basic data’ enter:
- Name – should default from the corresponding General Ledger account (make sure it’s the short name according to the description in the table below)
- Description – should default from the corresponding General Ledger account (make sure it’s the short name according to the description in the table below)
- Primary Cost Element category
Important note: The corresponding GL expense accounts must exist in FI. If not, create them by following path:
Menu Path: Accounting > Financial accounting > General ledger > Master Records > Create
T Code to create general ledger account: FS00