Difference between investment project & cost projects

Posted: Oct 14, 2009 10:02 AM in response to: MeghnathTiwari

Hi Investment projects generally leave an Asset like a building/ machinery etc and all the costs are capilized. An asset is created to which all the costs are transferred. Whereas a Cost project is like an R&D project where costs are incurred for the project. These are generally passed as Overheads and no asset is created

Hi, There are mainly 2 kinds of projects 1. Customer project (i.e. what ever is produced or created that is sold to customer) 2. Non customer project a. investment b. cost project, which both the cost is beared. Investment project is seen as investment and which will give returns in future. E.g. Expansion of plant or building up new machinary set etc. hence after completation this will be settled as Asset. Then it's cost/value undergo depreciation cycle per year as per related accounting principles applied. Cost project is settlement of cost to cost collectors. E.g. purchasing of services for betterment of business. in this the costs are settled to cost collectors only. e.g. paying charges to SAP implementation partners, Paying to Auditors etc.

What the difference between WBS and NETWORK

Posted: Mar 23, 2010 3:39 PM in response to: Maphums

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Hi The WBS divides the project step-by-step into structure elements. The elements are called work breakdown structure elements (WBS elements) in the Project System. Each WBS element is the result of this splitting. You can structure the WBS from various viewpoints: By phase (logic or process oriented) By function (function-oriented) By object (object-oriented) A network defines the following in project Activities , Activity elements, Relationships. In simple terms, If a building is constructed Foundation, basement and roofing could be WBS elements where as plastering and brick work would be activities All the labour work like plastering and brick work put together called network Regards Antony

Hi A work breakdown structure is a model of a project, and shows the project activities to be carried out as a hierarchical structure. The various work packages in the project are described in individual work breakdown structure elements (WBS elements). You can further divide these elements at various levels until you reach the level of detail you require. The focus here is on planning, controlling, and analyzing costs, basic dates, and budgets. Because the work breakdown structure is structured hierarchically,the data can be summarized and displayed for the corresponding higher-levelWBS elements. When you create a work breakdown structure, you also have to create a project definition..

Networks map the flow of the project. The focus here is on describing, planning, controlling, and analyzing costs, scheduled dates, resources, and material requirements. The basic elements that go to make up a network include activities and relationships that describe the tasks and temporal dependencies between the various tasks in a project. SAP Project System supports the following activity categories: Internal processing: for capacities to be staged in your own company External processing: for tasks to be assigned externally Service activities: for procuring external services Costs: for planning additional primary costs In the Project Builder, you create activities for WBS elements. This means that the activities are assigned to the WBS elements in question. It also means that the planned and actual data for the activities (dates, costs, payment data) can be aggregated at WBS element level. A network always includes a network header that contains the control data and default values for the entire network.

An internal order is used to accumulate cost for a specific project or task for a specific time period. An internal order is therefore used for a short period with a specific deadline. Your internal order will usually settle to cost centers (and not visa versa) according to the settlement rule in the order setup. An internal order can therefore be used to group all the expenses incurred to plan and hold a conference over a 3 month period. The order can be settled on a monthly basis to cost centers Internal orders can also be used as "statistical" orders. This is also specified in the setup of the order. You do not have to settle statistical orders. When posting costs, you will post to the cost center and the order simultaneously. Both have to be specified when posting journals or purchase orders against statistical orders Hope this will help you
A CRM
Posts: 360 Registered: 10/25/06

Re: Difference between WBS Element & Internal Order

Posted: Jan 22, 2007 6:22 AM in response to:

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SAPSAP

Dear Muhammad Siddique,

Forum Points: 276

The explaination was very helpful. i am into CRM and while making marketing plan we make campaign elements (WBS elements ) which are short term activities like "dealer meet" and try to monitor the expenses made to it. we also apply settlement rule to each wbs element by specifying the cost centres and the percentage allocated to each cost centre depending on the products. So this is the reason why I think there is no difference between I.O and WBS Element. i hope my question is more refined now. Kindly please throw some light on some significant differences if possible. Regards, Amit
Jacob Taiwo
Posts: 231 Registered: 9/5/06

Re: Difference between WBS Element & Internal Order

Posted: Jan 23, 2007 4:50 PM in response to: A

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CRM

Forum Points: 668

Hi Amit, To understand the difference between WBS Element & Internal Order, i shall take them one after the other. To understand WBS elements, you need to understand the concept of Project. Project Definition is the framework within which objects are grouped. It provides the basis for the Work Breakdown Structure(WBS). In principle Project Definition refers to a single Production Area or License Block Objects could be sub-projects, phases of a project, distribution of activities, materials, services, general cost elements, etc. Projects have a start and a finish date whether long term or short term. WBS is the hierarchical model of the tasks to be performed in the project. It represents the sub-division of work into manageable components which can be budgeted, planned and controlled. WBS is the operative basis for the further steps in project planning, e.g. cost planning, scheduling, capacity planning as well as project controlling. WBS can be organized according to phases, according to functions/processes or according to objects (execution projects). Networks and Activities A network represents the process in a project or in a task in logical sequence, and is the basis for detail scheduling. Networks are made up of two main components: Activities and Relationships. Through the use of activities, a network represents the flow of a project. Activities are the starting point for planning, analysis and specification. Networks are also used to generate requisitions of material and services. On the other hand, Internal Order

Is an instrument used to monitor costs and, in some instances, the revenues of an organization. Internal orders can be used for the following purposes: 1. Monitoring the costs of short-term jobs 2. Monitoring the costs and revenues of a specific service 3. Ongoing cost control Internal orders are divided into the following categories: 1. Overhead orders - For short-term monitoring of the indirect costs arising from jobs. They can also be used for continuous monitoring of subareas of indirect costs. Overhead orders can collect plan and actual costs independently of organizational cost center structures and business processes, enabling continous cost control in the enterprise. 2. Investment orders - Monitor investment costs that can be capitalized and settled to fixed assets. 3. Accrual orders - Monitor period-based accrual between expenses posted in Financial Accounting and accrual costs in Controlling. 4. Orders with revenues - Monitor the costs and revenues arising from activities for partners outside the organization, or from activities not belonging to the core business of the organization. I hope the above helps. Do not forget to award the points please. Regards, Jacob