While SAP FI deals with a company's accounting and internal and external reporting, SAP CO supports processes to plan, report on and monitor costs from business operations. SAP CO can be instrumental in improving the company's profitability. Similar to SAP FI, SAP CO is comprised of sub-modules that handle specific processes :
* Cost Elements, which provides an overview of all the company's costs and revenues based on profit and loss statements -- also known as income statements. Cost element accounting describes the origin of the costs. Cost elements represent specific costs that the company incurs.
* Cost Centers deals with the costs associated with the company's internal divisions or departments, such as sales, production, marketing or human resources. Cost Centers involve only expenses, not revenues.
* Profit Centers handles all of the cost data related to the company's business lines. It deals with both expenses and revenues -- unlike Cost Centers, which deals only with expenses.
* Internal Orders is used to manage the costs for smaller internal projects or non-fixed assets -- like a limited-time marketing campaign, for example.
* Profitability Analysis enables the company to analyze the profitability of its products. For example, Profitability Analysis can be useful for making decisions on matters like product pricing, distribution channels and target market segments. It also allows levels of detail in analyzing profitability, such as for each region or country, product types and distribution channels or individual customer profitability.
* Product Costing manages data about the costs required to produce the company's goods and services. Product costing analysis can help manage manufacturing costs and optimize efficiencies.
