S/4HANA Cost Elements

This blog post about S4HANA Cost Elements is from our friends at SAPexpert - the source for trusted SAP tutorials, tips, and training content.

 

With S/4HANA Finance, the universal journal includes a single field account that covers both the general ledger (G/L) account and the cost element. As companies migrate to S/4HANA Finance, the system merges their existing G/L accounts and cost elements.

The transactions for the creation and maintenance of cost elements become obsolete, replaced by a single transaction for account maintenance. However, this technical change does not mean that the idea of a cost element has disappeared with S/4HANA Finance. Learn what changes come with S/4HANA Finance and what remains as before.

 

Key Concept

The cost element design within the controlling area is a vital part of setting up your controlling (CO) system. In S/4HANA Finance, as the accounts and cost elements are merged, the following changes result:

  • The primary cost elements represent the profit-and-loss accounts used to classify your journal entries. In all accounting approaches, you use cost elements to represent wages and salaries, material expenses, depreciation, and many others. If you use account-based profitability analysis (CO-PA) or if you have make-to-order processes requiring results analysis and settlement, you also use cost elem...

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Author Photo

Janet Salmon joined SAP in 1992. After six months of training on R/2, she began work as a translator, becoming a technical writer for the Product Costing area in 1993. As English speakers with a grasp of German costing methodologies were rare in the early 1990s, she began to hold classes and became a product manager for the Product Costing area in 1996, helping numerous international organizations set up Product Costing. More recently, she has worked on CO content for SAP NetWeaver Business Warehouse, Financial Analytics, and role-based portals. She is currently chief product owner for management accounting.