Sap Essay Example | Topics and Well Written Essays - 1000 words - 2

Sap - Essay Example In allocating costs, SAP utilizes transaction based and periodic allocations. Periodic allocations are generally known as periodic reposting methods. Periodic reposting enables the user to adjust postings transferred to cost centers, business processes or internal orders. Transaction postings made under periodic reposting yield similar results to those posted under transaction based reposting (Periodic Allocations). Under periodic allocation, reposting has an effect felt only once on actual costs incurred at the end of the period. Postings are usually made on costs related to controlling, which include telephone, postal charges, and insurance costs that are all accounted for in financial accounting. These costs incurred are then posted to an allocation cost center or a specific business process. Periodic reposting widely uses distribution and assessment allocation, and indirect activity allocation method. Under distribution and assessment methods, primary and secondary costs are allocated from cost center accounting and activity based costing. Allocations can be based on costs or quantities where the user is dealing with indirect activity allocations. The costs or quantities are collected on a cost center during the accounting period and allocated to receivers according to keys defined by the user. These are the same methods used in indirect allocation method except that exchange of activities is not the basis of allocating costs or quantities. In indirect allocation, distribution and assessment methods utilize user defined keys such as amounts, percentages, statistical key figures or assignment basis provided for by the amount posted. Distribution and assessment methods define keys as well as the sender and receiver relationships only once; therefore being easy to use. Methods are also advantageous over direct allocation methods in that they can be used for cost centers (Periodic