What is cost element planning in SAP CO - Controlling?

SAP Term: cost element planning

• Component: CO

• Component Name: Controlling

• Description: The planning of primary and secondary costs for: A cost center An order A project Primary cost planning involves recording the costs incurred because of the consumption of goods and services and incurred by the company in transactions with external parties. You can plan primary costs either as values, or with reference to quantities. Planning with reference to quantities means that the planned consumption is recorded and then valuated with the planned cost per unit. Planning values means that you record only the planned costs for each cost element. You plan secondary costs to reflect the fact that cost centers require services from other cost centers to perform their own activities. You can plan secondary costs directly by means of activity input planning, or with reference to quantities using assessment.

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• Key Concepts: 
  Cost element planning is a component of SAP Controlling (CO) that allows users to plan and manage costs. It enables users to create cost elements, which are the basic building blocks of cost planning. Cost elements can be used to plan and track costs for various activities, such as personnel costs, material costs, and overhead costs. 
  
  How to use it: 
  To use cost element planning, users must first create cost elements in the system. This can be done by entering the relevant data into the cost element master data. Once the cost elements have been created, users can then use them to plan and track costs. This can be done by entering the planned costs into the cost element planning screen. 
  
  Tips & Tricks: 
  When creating cost elements, it is important to ensure that they are properly categorized according to their purpose. This will make it easier to track and analyze costs later on. Additionally, it is important to ensure that all relevant data is entered into the cost element master data, as this will ensure that the cost element is properly configured for planning and tracking purposes. 
  
  Related Information: 
  Cost element planning is closely related to other components of SAP Controlling, such as profitability analysis and product costing. Additionally, it is also related to other components of SAP ERP, such as financial accounting and materials management.