---
title: Using SAP Business ByDesign for Cost and Revenue
description: Explore the planning, overhead distribution and absorption, and revenue recognition capabilities of SAP Business ByDesign in this blog post.
---

[Learn SAP from the Experts | The SAP PRESS Blog](https://blog.sap-press.com)

# [Using SAP Business ByDesign for Cost and Revenue](https://blog.sap-press.com/using-sap-business-bydesign-for-cost-and-revenue)

 Written by [SAP PRESS](https://blog.sap-press.com/author/sap-press) | Nov 2, 2022 1:00:00 PM

The **Cost and Revenue** work center provides guidance on creating and executing overhead distribution and absorption runs, uploading a plan for financial reporting, and setting up revenue recognition in SAP Business ByDesign.

## Planning

Planning in [SAP Business ByDesign](https://blog.sap-press.com/getting-started-in-sap-business-bydesign) provides functionality to upload plans or budgets to provide visibility into financial reporting. Multiple plan versions can be uploaded and viewed in reporting.

 

Open the **Cost and Revenue** work center and then select the **Planning** task. Click **New** and then click **Plan Version from Excel** and select the type of plan you want to upload. The **New Balance Sheet Plan** or **New Balance Sheet Plan – Multi Company** option is used to upload your balance sheet, and the **New Expense and Income Statement Plan** or **New Expense and Income Statement Plan – Multi Company** can be used to upload an P&L plan. Highlight the desired plan and click **Download**. Click the file link to access the template for use with the SAP Business ByDesign Add-in for Microsoft Excel.

 

Once your budget or plan has been created, open the Microsoft Excel template and log on to SAP Business ByDesign through the add in. You’ll need the URL of your tenant and your user name and password for SAP Business ByDesign.

 

Enter the plan version in all capital letters, with no spaces or special characters in the **Plan Version** field. Then, maintain the **Company ID**, **Responsible Employee**, **Fiscal Year**, **Set of Books**, **Currency** and **Description** fields on the header of the **Upload Plan Data for Expenses and Income Statement**. You can define the plan as the default plan by selecting the **Set as Default Plan Version** checkbox. Select the **Overwrite all records of this plan version** checkbox to overwrite all data in the plan, or leave this checkbox deselected to only change items that are defined in the item detail.

The item detail needed in the **Upload Plan Data for Expense and Income Statement** task includes the **G/L Account**, **Cost Center** (required for expense accounts), **Profit Center** (required for revenue and variance accounts), and values by **Accounting Period**. An example of the **Upload Plan Data for Expense and Income Statement** task is shown in this figure.

 

**Note:** The **Upload Plan Data for Balance Sheet** task functions in the same manner as the **Upload Plan Data for Expenses and Income Statement** task; however, the item data includes the **G/L Account**, **Profit Center**, **Opening Balance**, **and Accounting Period** fields.

 

Open the **Cost and Revenue** work center and access the **Planning** activity. In the overview screen, you’ll see all plans that have been uploaded, including their fiscal year, set of books, company, and created-by information and whether the plan is the default plan. You’ll can reset defaults, edit a plan (pencil icon), and delete a plan (trashcan icon).

 

Highlight a plan and click **Edit** to modify or review the plan. In addition to the data already described, the **General** tab can contain notes and attachments. The **Plan Data** tab provides a report that reflects the details of the uploaded plan by general ledger account and period. Click the gear icon and then click **Analyze** to access the Financial Plan Details report. Edit the **Selection** and the **View** to customize the report to your needs. The **Changes** tab provides insight into who has modified the plan and when.

 

Once the plan has been uploaded, it is available in assorted reports. A partial listing of the available reports is shown below.

 

 

## Overhead Distribution

SAP Business ByDesign’s overhead distribution functionality distributes costs from support cost centers to primary cost centers or projects. Support cost centers accumulate overhead costs, and these costs are allocated to projects or primary cost centers on a periodic basis.

 

Define a distribution rule by opening the **Cost and Revenue** work center and click on **Distribution Rules**. Click **New** and then select between the **Distribution Rule for Cost Centers** or **Distribution Rule for Projects** options. This choice defines whether the costs will distribute to a cost center or a project.

 

In step 1 (**Enter Basic Data**), define the **Distribution Factors** as **Fixed** or **Based on Costs**. The **Fixed** option means distribution will distribute costs based on the defined percentage while the **Based on Cost** option allocates the costs pro rata based on the cost in the receiving cost centers. In the **Determination of Distribution Amount** field, you define the percentage of the costs you wish to distribute and which cost you wish to distribute. All costs can be distributed, or you can define the specific general account or group of general accounts to distribute to the receiving cost centers. **The Receivers** section defines the **Receiver Type** and how the cost centers or projects will be selected (i.e., by **Organizational Unit** or **Manually**).

 

In step 2 (**Select Receivers**), you’ll select the receiving cost centers or projects and define the **Valid On Date** field. Define the **Distribution Factors** in step 3 (**Enter Distribution Factors**). Step 4 (**Enter Distribution Rule Attributes**) is where you’ll define the **Distribution Rule ID** and the **Distribution Rule Description**. In the **Account Determination** section, choose the **Account Determination** to use for the debits and credits of the senders and receivers.

 

Step 5 (**Assign Additional Senders**) allows the selection of additional sending projects. Step 6 (**Review**) provides an overview of the parameters defined for the run. If you need to make changes, click **Previous** to return to the step where edits are needed. If no changes are required, click **Finish.**

 

In the example shown in the next figure, note that the **Distribution Factors** is **Fixed.** Also note that, in the **Determination of Distribution Amount** section, the **Sender** type is **Cost Centers**, the **Percentage to Distribute** is **100%**, and the **Distribution Basis is All Costs**. The receivers are cost centers, and the cost centers are selected manually.

 

 

Under the **Senders** tab**,** shown below, you can view the sending cost center(s) and their validity dates.

 

 

The **Receivers** tab, shown in in the following figure, reflects the cost center or project that will be receiving costs and the factor for the distributions.

 

 

Execute a period-end overhead distribution run by opening the **Cost and Revenue** work center and selecting the **Overhead Distribution** task. Below shows an example of a new distribution run, defined through the **Run Description**, **Test Run**, **Company**, **Set of Books**, **Distribution Rule** (created earlier), **Closing Step,** and **Period/Year** fields.

**9**

 

Click **Start Now** or **Schedule** to run the overhead distribution run later or on a recurring basis. Once the run has executed, click **Display Log**, highlight the set of set of books, **and click View** to see the results. As with most runs in SAP Business ByDesign, the **Data Selection** tab reflects the parameters of the run, and the **Messages** tab shows any error or informational messages. The **Postings** tab provides a listing of the transactions that posted. The figure below shows the postings generated from overhead distribution run, under the **Postings** tab.

 

The **Processed Successfully** tab provides details on items processed without errors. Further details on the items are available under **Processed with Errors** and **Not Processed** tabs. Click **New** then click **Overhead Rule**. A guided activity will walk you through creating a new overhead rule.

 

## Overhead Absorption

Overhead absorption runs apply overhead to the direct costs of production orders, cost collecting projects, and direct cost projects.

 

Once overhead distribution runs have been executed to move costs from support cost centers to primary cost centers, you cannot execute overhead absorption runs to move overhead costs to the direct costs for direct cost projects, cost colleting projects, production, and service orders.

 

Overhead rates are calculated outside of SAP Business ByDesign and then defined in the overhead rate that is used for the overhead absorption runs. Overhead rates are usually defined for an extended period. Open the **Cost and Revenue** work center and click on **Edit Overhead Rates** located under **Common Tasks** to create or edit overhead rates.

 

Create a new overhead rate by opening the **Cost and Revenue** work center and clicking on **Common Tasks – Edit Overhead Rates**. Then, click **New** and select **Overhead Rate.** Step 1 (**Enter Basic Data**) of the guided activity requires you define an overhead rate ID and add a description for the rate or select the **Company**, **Set of Books**, and **Overhead Type** from the dropdown list. Once the data is defined, click **Next**.

 

Step 2 (**Specify Calculation**) defines the calculation base when you select the general ledger account from the dropdown list. Maintain the **Percentage** and **Valid from Date** fields. Click **Next.**

Step 3 (**Specify Crediting**) requires the selection of the account determination and the cost center for the credit. Once complete, click **Next**.

 

Finally, as shown below, step 4 (**Review**) provides an overview of the parameters you’ve defined for the new overhead rate. Review these settings, and if edits are required, click **Previous** until you arrive at the screen that requires editing. When your review or edit is complete, click **Next.**

 

Once the overhead rate is defined create an overhead rule by opening the **Cost and Revenue** work center and selecting the **Overhead Rules** task. Then, click **New** and then select **Overhead Rule**.

 

Step 1 (**Enter Basic Data**) requires you to define an overhead rule ID, enter a description for the run, or select the company from the dropdown list. Once the data is defined, click **Next.**

 

Step 2 (**Specify Assignment Rules**) is where you’ll define assignment rules to production lots and material cost estimates, projects, and service orders. The new overhead rule is automatically assigned. Click **Show All Assignment Rules** to check the consistency of these assignments, as shown below. Review the chosen assignment rule and make changes if required; then, click **Save and Close.**

 

In step 3 (**Select Overhead Rates**) you’ll move the rates to be used from the **Available Overhead Rates** section to the **Overhead Rates to Be Calculated** section by highlighting the relevant the available overhead rule and clicking the right > icon to move the selection, as shown here.

 

 

Once the available overhead rates have been selected, click **Next.**

 

In step 4 (**Review**), check the parameters you’ve defined in the run. If the parameters need to be edited, click **Previous** until you arrive at the screen that requires edits. Once edits and reviews are complete, click **Finish.**

 

The overhead rate and overhead distribution rules have now been defined, and you can execute an **Overhead** distribution run at period-end. Overhead distribution runs are specific to service orders, overhead cost projects, or direct cost projects.

 

Select the type of overhead distribution run you wish to execute by opening the **Cost and Revenue** work center and then selecting the desired run in the **Period Task** section. Enter a run description for the new absorption run for direct cost projects and select the **Test Run** checkbox for a test run. In the **Data Selection** area, choose the **Company**, **Set of Books**, **Project**, **Closing Step** and the **Period/Year**. Click **Start Now** or, to schedule the run for a later time, click **Schedule.**

When the run is complete, click **Display Log** and highlight the set of books you wish to view. As with most runs in SAP Business ByDesign, the **Data Selection** tab reflects the parameters of the run, and the **Messages** tab shows any error or informational messages. The **Postings** tab provides a listing of the transactions that have posted. Below shows the postings from the **Postings** tab of an overhead allocation run.

## Revenue Recognition

SAP Business ByDesign provides multiple types of revenue recognition, including at the point of invoice, using cost-to-cost percentage of completion (POC), cost-to-cost project POC, completed contracts, and the point of delivery. A revenue recognition run processes sales documents and recognizes their revenue based on the defined revenue recognition method assigned.

 

Revenue recognition is set for specific sales documents in business configuration, but the revenue recognition method can be reassigned for a sales order in the sales document items, for projects and contracts in the **Cost and Revenue** work center **Sales Documents Items** activity.

 

Execute a revenue recognition run by opening the **Cost and Revenue** work center and clicking **Revenue Recognition**. You can copy an existing revenue recognition run or click **New** and then **Revenue Recognition** run to create a new run.

 

In the **Run Parameters** section, maintain the **Run Description** field and select the **Test Run** checkbox to preview the run before posting. Define the company, set of books, sales object type, closing step of the general ledger, and the period/year in the **Data Selection** section**.** In the **Sales Document Selection** section, select the **Sales Document Type** and the **Sales Document ID** from the dropdown menus, and the **Sales Organization** field will populate automatically. An example of a revenue recognition run is shown below.

 

 

Execute the run by either clicking **Start Now** or clicking **Schedule** and scheduling the run for a future date or create a recurring pattern.

 

Once the run is complete, click **Display Log** to view the results of the run. The **Data Selection** tab displays the parameters chosen for the run. The **Messages** tab provides insight into any errors or information messages generated in the run. Account postings can be found in the **Postings** tab, which reflects the debit and credit postings from the run and the associated account. The screen shown in the final figure reflects the results of the **Revenue Recognition Run** shown earlier.

 

The **Processed Successfully** tab provides details on sales documents processed without errors. More details on the sales documents can be found in the **Processed with Errors** and **Not Processed** tabs.

 

*Editor’s note*: This post has been adapted from a section of the book [*SAP Business ByDesign: Business User Guide*](https://www.sap-press.com/sap-business-bydesign-business-user-guide_5417/?utm_source=sappressblog&utm_medium=referral&utm_campaign=Blogs&utm_term=2191_chapter9&utm_content=2191)by Caroline Atkinson, Andrew Howell, Thomas Kramer, and Laura Widner.

[View full post](https://blog.sap-press.com/using-sap-business-bydesign-for-cost-and-revenue)

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