intenral orders

An instrument used to monitor costs and, in some instances, the revenues of an organization.

Internal orders can be used for the following purposes:

• Monitoring the costs of short-term jobs

• Monitoring the costs and revenues of a specific service

• Ongoing cost control

Internal orders are divided into the following categories:

• 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.

• Investment orders - Monitor investment costs that can be capitalized and settled to fixed assets.

• Accrual orders - Monitor period-based accrual between expenses posted in Financial Accounting and accrual costs in Controlling.

• 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.

Orders Classified by Controlling Objectives You can create internal orders for a time-restricted operational job, or for long term cost monitoring. If required, you can make a statistical posting to internal orders, to monitor costs from a different angle, as an alternative to doing so to a true object. Orders for Time-Restricted Jobs These internal orders are distinguished by their uniqueness and greatly varied durations.
You can create an internal order for each individual job, to collect all costs incurred in performing that job. These internal orders are often planned in several steps, depending on the technical planning progress or on the progress of the work itself.
You can continue to allocate the actual costs collected on these internal orders:

• Either in the month the costs were incurred, using the actual costs in this month

• Or after all the work for the order is completed

• To display the costs as a total not only on the internal order, but also on the receiver.
• Because the target account assignment had not yet been determined when the order was created

Typical examples of orders for time-restricted jobs are:

• Investment orders for fixed assets produced in-house
• Development and construction orders
• Production orders in Controlling
• Orders for services to a third party
• Advertising and trade fair orders.

Internal Orders for Long-Term Cost Monitoring Long-term internal orders are most often used to allocate the costs incurred for recurring deliveries and activities. They allow you to continuously monitor costs in more detail than is possible using a cost center. Additionally, you can break down and analyze serious cost center variances more quickly using these internal orders.
The actual costs collected on long-term internal orders are settled monthly.

Such internal orders often remain valid for several years. Some typical uses include:

• Minor repairs
• Maintenance of small equipment, such as wiring, lighting fixtures, and so on.
• Individual vehicles from the company fleet
• Operation of "administrative" equipment, such as photocopiers, telephone systems, and so on

Statistical Internal Orders Statistical internal orders are typically used to evaluate costs that cannot be displayed in detail either in Cost Element or Cost Center Accounting. These orders allow evaluations from a viewpoint different to that used in Cost Center Accounting.
To achieve this, the debits for a cost center can receive an additional account assignment on a statistical internal order. The amount then appears under the original cost element, both on the cost center (cost effective) and the internal order (statistical).
You can post to a statistical internal order as a statistical account assignment object, without having to enter a true account assignment object. In this case, you have to state a cost center in the internal order control parameters (under "Control"). The cost-effective account assignment is then made to this cost center. If required, you can change the cost-effective cost center that is to be posted to when you enter the posting.
You can specify a company code and a business area in the internal order. All credits and debits for this internal order can then be made using only account assignment objects that belong to the specified company code or business area. For cross-company code controlling or cross-business area controlling you should not specify a company code or business area.
Unlike real internal orders, you can neither settle statistical orders, nor apply overheads to them.

You create a statistical order for each vehicle in your company fleet.
You post the costs incurred for fuel, repairs, insurance, and so on, to the vehicle fleet cost center, with an additional account assignment on the relevant statistical internal order.
On your cost center, you can see the total costs incurred for all the vehicles. From the individual internal orders, you can see how high the costs are for each vehicle.