CRM Service Functionality With Controlling

7/25/2019 CRM Service Functionality With Controlling

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Understand the integration of CRMService functionality with

Controlling

Introduction

Customer Service Organizations are focused towards fast and high quality service and at the same time want real time insight into

service profitability. SAP Customer elationship !anagement "SAP C!# is becoming widely used by these service organizations

to manage the comple$ities of service business. %he increasing use of SAP C! requires management accountants to understand

the integration of customer service processes and to analyze service profitability by having complete view of service revenues and

costs.

%his article will provide detailed view of how SAP C! integrates with Controlling. It will also e$plain the process flow of some &ey

processes in SAP C!' covering the creation of service orders and service contracts. %o give bac&ground to readers on different

types of service used in a service document in SAP C!' the article covers different ob(ects and details their impact in the

integration with Controlling.

Controlling integration settings for C! Service

1. Controlling Type)et us go through configuration settings that drive integration between Controlling and C! Service. %he first &ey aspect in the

integration of Controlling with C! is set up of the *Controlling type*. Controlling type determines how are the service revenues and

service costs from C! are to be trac&ed in Controlling. %he service revenues and costs can either posted to a separate cost ob(ect

or to be posted directly to Profitability Segment.

• The option of “single object controlling” enables to tracks costs and revenues to separate cost object. With

this option, the costs and revenues will be tracked into the Controlling internal order object. The tracking costs andrevenues at the internal order level in Controlling will allow applying revenue recognition rules using the Resultsanalysis functionality.

• The option of “ass object controlling” posts all costs and revenues directly to Controlling !ro"tability

#egent $C%&!'(. )owever, this option will not allow e*ecuting revenue recognition using Results 'nalysisfunctionality.



+igure , provides view of Controlling Integration setting for C! Service. %his set up is done at the following menu path in

configuration- Integration with Other mySAP.com Components Customer elationship !anagement Settings for Service

Processing Controlling Integration.

+igure - Controlling ntegration for CR/ #ervice

The ne*t aspect in integration settings is the 0Controlling level0 that deterines whether the costs and revenuesare to be tracked at CR/ service docuent level or to be tracked at ore detailed level at each line ite of the

CR/ service docuent. The ite level controlling will create internal order for at line ite of the CR/ #ervicedocuent. +or instance, for every line in the CR/ #ervice docuent a corresponding internal order will be created.While transaction level controlling will create internal order per CR/ #ervice docuent.

2. Controlling Scenario

With internal order set as controlling object, the ne*t step is to de"ne the Controlling scenario that will provide theparaeters for the integration. The key paraeters in the Controlling scenario con"guration are de"ning thecosting variant, de"ning the results analysis key to calculate capitali1ed costs 2 revenues and de"ning the

settleent pro"le for specifying the receiver of costs and revenues.



+igure /- Controlling Scenario in C! Service

• The costing variant is assigned for the internal orders to deterine the planned costs in unit cost estiate.

The costing variant will deterine which price is used for valuation of aterial and for service hours booked againstthe service order. The standard #'! syste o3ers default costing variant !C45 with prede"ned valuation variant. 6ou can directly use this standard variant or alternatively copy and custoi1e the variant to eet your

re7uireents.

• The Results analysis key will drive the calculation of capitali1ed costs and recognition of revenues for the

CR/ service processes. The results analysis will calculate the work in process where costs incurred on the CR/service process are to be capitali1ed. t will also enable to apply di3erent ethods of revenue recognition. Theresults analysis con"guration is done as part of C% odule con"guration at the /8 node of Controlling 9 !roductCost Controlling 9 Cost %bject Controlling 9 !roduct Cost by #ales order 9 !eriod end Closing 9 Results analysis.

• The settleent pro"le will deterine the target cost object to which the costs and revenues to be settled

fro the internal order. The settleent pro"le is de"ned in the C% odule at /8 enu path of nternal orders 9'ctual postings 9 #ettleent 9 /aintain #ettleent pro"les. The appropriate receivers will be de"ned as part ofthe settleent pro"le con"guration.

3. Internal Order type



0ith C! Service integration set up of single ob(ect controlling' all the internal orders are created with default order type 1SAPS2. %o

use different order types based on C! Service transaction "i.e. different internal order type by C! process#' you can implement

controlling parameters 3A4I "definition 5 *iaom6business6scenar7#. 0ithin this 3A4I' use method 8change6order6type7 to derive

order type based on the C! transaction type.

+igure 9- 3A4I definition for changing default internal order type

0ith this bac& drop of controlling set up' let us understand different ob(ects available in SAP C! Service and its integration with

Controlling.

C! Service Products and Integration with Controlling

In C! Service' the service order processing is based on the products used in the service order. C! Service offers pre5defined

products that can be used in service processing. :ach of these products integrates in a unique way with Controlling.

1. Service roduct

In C! Service' Service product is used to plan for labor hours spent in service process. %he labor hours are boo&ed through C!

Confirmations that creates time sheet entry in :CC. %he costs of labor hours are boo&ed on transfer of time sheet data to

Controlling. %he actual costs are based on the activity rates maintained for combination of activity type and cost center of the service

employee ma&ing the confirmation.



;ere' the derivation of activity type is based on the C! item category. %he item category signifies different types of service to

enable mapping by activity types. %he configuration for lin&ing the C! item category and activity type is to be done in I!< node of

Integration with Other mySAP.com Components Customer elationship !anagement Settings for Service Processing %ime

Sheet Integration 4efine 4erivation of Attendance %ype' Activity %ype and Cost :lement.

+igure =- Set up for service hours to derive activity type

!. Tools roduct

%ools product are the materials that are repetitively used in performing the service (ob. %he usage of tools item in the C! Service

process are boo&ed through C! confirmations and the costs are directly posted in Controlling as Internal activity allocations. %he

actual cost of tools is recovered from cost center assigned to the tool item. %he costs boo&ed are based on the cost center and

activity type combination maintained for the tool material in the following configuration node of Integration with Other mySAP.com

Components Customer elationship !anagement Settings for Service Processing Controlling integration 4etermine Cost

Center and Activity %ype for %ool.

+igure >- Set up for tools to derive cost center and activity type



3. "#pense roduct

%he e$pense item in the C! Service process is used to account for additional e$penses of the service order. %he e$pense item

costs are boo&ed through C! confirmations and directly create Controlling posting as reposting of costs on primary cost elements.

%he costs are recovered from the cost center of the service employee ma&ing the confirmations. %he activity type and reposting

primary cost element is based the configuration made in Integration with Other mySAP.com Components Customer elationship

!anagement Settings for Service Processing %ime Sheet Integration 4efine 4erivation of Attendance %ype' Activity %ype and

Cost :lement.

$. Service parts

%he consumption of Service parts in the C! Service process is posted through confirmations and these directly create material

withdrawal posting in materials !anagement. %he cost of the service parts is based on the price maintained in the :CC material

master. %he actual costs of service parts are posted through goods issue on the internal order or to the account assignment ob(ect

assigned during confirmations.

%.Sales roduct

Sales products in C! Service signify the materials sold along with the service. %he Sales items in C! Service Order are not

confirmed but directly create a sales order in Sales ? 4istribution "S4# in :CC. %he cost of sales product is posted to the internal

order on goods issue for delivery in !aterials !anagement "!!#.

%he following table gives snapshot of how each C! service product integrates from costs and revenue perspective with Controlling

and type of Controlling transaction posted in :CC.

CRMProduct

Costdriver

Revenuedriver

ControllingInterface

Controllingposting oninternal order

#erviceproduct

'ctivityrates aintained for cost

center:activity type cobinationin ;CC

!ricingconditions in CR/

#ervice %rder :Contract

C'T#docuent

'ctualactivity allocations

#ales

product

#tandardcosts of aterial aintained in;CC

!ricing

conditions in CR/#ervice %rder :Contract

!ostingsfro goodsoveent

!ostingsfro "nance



CRMProduct

Costdriver

Revenuedriver

ControllingInterface

Controllingposting oninternal order

#erviceparts

#tandard

costs of aterial aintained in;CC

!ricing

conditions in CR/


!ostings

fro goodsoveent

!ostingsfro "nance

;*penseite

!ricing

conditions in CR/ #ervice %rder :Contract

!ricingconditions in CR/


Repostingof costs

Reposting

of priary costs $onpriary cost eleents(

Toolsites

'ctivity

rates aintained for costcenter:activity type cobinationin ;CC

!ricing

conditions in CR/#ervice %rder :Contract

Costaccountingdocuent

<irect'ctivity allocation

@ote- In C! Service process' billing can be performed in C! using C! billing or in :CC in Sales ? 4istribution module. In this

article' all the scenarios are e$plained with :CC billing only.

)et us go now through the commonly used C! service scenarios by organizations. I will e$plain the controlling integration

approach used in these scenarios.

3usiness Scenarios

Scenario 1& CRM Service Order process

In this scenario' for the service requested by the customer a service order is created in C! system. %he resources consumed in

the service li&e materials' hours spent' additional e$penses etc. are recorded as costs of service. %he revenues are generated

through billing done to the customer for the resources consumed. %he following diagram in figure gives representation of this

process.



+igure - C! Service Order Process

In this process' the C! service order triggers an internal order in :CC that will capture all costs and revenues. %he costs boo&ing

on internal order will be based on confirmations boo&ed in C! system. %he C! confirmations create a CA%S document in :CC

and the CA%S document boo&s cost of the service on the internal order. 0hen the billing is created' the revenues are boo&ed

against the internal order. 3ased on the set up done for results analysis' the costs of service can be capitalized as wor& in process.

+rom the management accounting perspective' all the costs and revenues will be collected against the internal order. %he internal

order will provide complete view of all revenues and costs boo&ed on the service order. %he esults Analysis process will calculate

the costs to be capitalized on the service order. %he results analysis calculation will be driven based on the results analysis &ey

lin&ed to the internal order. 4epending on the settlement receiver maintained for the internal order' costs are settled to a cost center

or to CO5PA segment.



+igure B - Internal Order line item display

+or e$ample' in the internal order B,,9DB,B "figure B# service costs incurred is =. euros and no revenues are billed to thecustomer. <oing by revenue recognition principles' as no revenues are billed on the service' the cost of service incurred should be

capitalized. 0ith the e$ecution of results analysis calculation using EEA, "Individual processing# or EEAI "Collective processing#

and then subsequent settlement of the internal order using EODD "Individual settlement# or EOD< "Collective settlement#' the entire

service cost of =. euros will be capitalized to balance sheet as wor& in process. %he balance of the internal order will thus be

represented as capitalized cost values on balance sheet and there will not be any settlement of values to profitability segment.

+igure D- Internal order line item display

+igure F- Settlement rule of internal order



+igure ,- Settlement from internal order to profitability segment

After invoicing customer "+igure D#' the revenues of B/ euros attributable to service are recorded on the internal order. 0ith

customer invoicing' the revenues and costs can now be recognized and reported in CO5PA. 0ith the results analysis calculation and

settlement of internal order' the capitalized value of wor& in process of =. euros will be reversed. %he revenues and costs of

service will then be settled to Profitability segment. After settlement of values from internal order to Profitability segment' the balance

of internal order becomes zero and all costs and revenues are reported for further analysis on various dimensions in CO5PA.



Scenario !& CRM Service Contract process

+igure ,,- C! Service Contract process

In this process' C! service contract is created for the contractual agreement drawn with the customer. As the single ob(ect

controlling is set at the C! Contract transaction type level' the internal order is created with reference to the C! Contract. +or

e$ecuting service requests' C! service orders are created with reference to the C! Contract. %hus all the costs "material' labor

hours and additional costs# are incurred in relation to the service order and these costs are boo&ed on the :CC internal order

created with reference to the contract. "@ote that there is no internal order in relation to the C! Service order as controlling

settings are that the level of C! Contract in this e$ample.# %he revenues on this internal order are boo&ed by the billing created for

the contract value.

esults Analysis process' as in scenario , will be e$ecuted on the internal order to calculate the capitalized costs' deferred

revenues and unbilled revenues. %he settlement process will create actual postings on balance sheet accounts based on posting

rules set up for esults Analysis.

%his process scenario is similar to scenario , e$plained above e$cept the controlling ob(ect is created with reference to the C!

service contract that generates revenue. As e$plained earlier' this is driven based on the integration settings done for combination of

C! transaction type and Controlling type. %hus the costs and revenue boo&ing happens on the internal cost ob(ect and enables to

analyze the profitability of the C! service contract.



+igure ,/- C! Service Contract e$ample

+or e$ample' in the internal order B/,// created for the C! Contract' the revenues of ,/,>> euros are billed on the contract

and the service costs of B/ euros are collected on the internal order. 0ith the setting used of controlling at transaction level' all thesubsequent service costs over the life of the contract will be accumulated on this internal order.

+rom revenue recognition perspective' the revenues billed on the contract are to be spread over the life of the contract. %he results

analysis calculates the revenues of F=>.=/ euros to be recognized in this case and the balance of e$cess revenues billed is treated

as capitalized revenues. %he settlement process creates posting to profitability segment for the revenues recognized and for the

costs settled. %he balance visible on the internal order ",/,>> G F=>.>/ H ,,/F.>D euros# represents the revenues capitalized on

balance sheet as deferred revenues.

In both the scenarios illustrated above' an integrated solution between C! and :CC offers detailed view to trac& the efficiency of

C! service transactions and report both the capitalized values profitability in a comprehensive manner.

CRM Service Functionality With Controlling

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