How to Configure and Execute Distribution Cycle in SAP

How to Configure and Execute Distribution Cycle in SAP

What is Distribution Cycle: A Distribution Cycle is used to reallocate primary costs (like salaries, rent, utilities) from cost centers (sender) to other cost centers (receivers).

Step by step guide:

1. Create Primary Cost Element GL – FS00
2. Create Cost Center Group for receiving cost centers – KSH1
3. Configuration of Distribution cycle – KSV1
4. Post FI Transactions to Cost Center – FB60
5. Run Distribution Cycle – KSV5
6. Generate Cost Center Report – KSB1
7. Interesting question for readers (check last)

Note: Assessment and distribution cycles in SAP are period-end activities to reallocate costs between cost centers.

In this blog, we are allocating costs from one cost center to three receiving cost centers. To simplify the configuration of the distribution cycle, we are grouping these three receiving cost centers into a single cost center group. This makes it easier to reference them during the setup.

Go to T code: KSV1.

Now enter the distribution cycle and start date, then press the Enter key.

Enter the end date and description, then click on ‘Attach Segment’.

Give segment name and description (We can have multiple segments in single distribution cycle).

Note: You can define one or more senders or receivers, either individually or by using groups for easier configuration and maintenance.

Share in Percentage: 75% (This means 75 out of 100 will be reallocated to the receiving cost centers, while the remaining 25% will stay with the sending cost center).

Receiver Tracing Factor: Based on the cost center group specified in the second tab (Senders/Receivers), you need to define the portion or percentage that each cost center will receive from the sender cost center during allocation.

Click on save button.

Now customizing request prompt will come, select your request and click on continue.

The system has successfully created the distribution cycle.

Enter the period (from and to), fiscal year, distribution cycle (you can run multiple cycles in a single execution), and the start date of the cycle. Then, remove the tick mark for Test Run.

Click on execute.

The distribution cycle is executed successfully without errors and it was displayed with 1 sender and 3 receivers. To view the detailed report, double-click on the line item.

Now displayed the detailed report of the distribution cycle.

Clear explanation – An FI Transaction was posted in FB60 with 22000 INR and that was captured by the cost center 1000. When the distribution cycle is executed, this cost will be reallocated to the receiving cost centers based on fixed percentages maintained in the configuration of distribution cycle (T code: KSV1).

Now enter the required inputs such as Controlling Area, Cost Center or Cost Center Group, and Cost Element or Cost Element Group, then click the Execute button.

The system displays the report.

Thought-Provoking Question for Readers of sap96.com

Scenario-Based Question:

If a company pays ₹90,000 as rent through a single FI transaction, and the organization has multiple business segments like Mobiles and Laptops, each with their own sender and receiver cost centers and specific reallocation rules within a distribution cycle

• Mobiles Segment:
  • 1 sender cost center
  • 3 receiver cost centers
  • Reallocation rule: 25% each to receivers, remaining 25% stays with sender
• Laptops Segment:
  • 1 sender cost center
  • 2 receiver cost centers
  • Reallocation rule: 30% each to receivers, remaining 40% stays with sender

Question:
Can this single FI transaction be used to execute both segment-wise reallocations in one distribution cycle run using KSV5? If yes, what configurations or design elements would make it possible?

SAP CO Cost Re-allocation:

• Manual Line Item Reposting (T code: KB61) with FI document number in SAP: Click here
• Manual Line Item Reposting (T code: KB11N) without FI document number in SAP: Click here
• How to Configure and Execute Distribution Cycle (T code: KSV1 & KSV5) in SAP: Click here
• How to Configure and Execute Assessment Cycle (T code: KSU1 & KSU5) in SAP: Click here
• How to Generate the Cost center Report (T code: KSB1) in SAP: Click here

SAP FICO Sub module w0ise:

• How to Create a Controlling area in SAP: Click here
• SAP Finance Enterprise structure: Click here
• SAP Finance GL Accounting: Click here
• SAP Finance Accounts Payable: Click here
• SAP Finance Accounts Receivable: Click here
• SAP Finance Bank Accounting: Click here
• SAP Finance New Asset Accounting: Click here
• SAP Controlling – Cost Element Accounting: Click here
• SAP Controlling – Cost Center Accounting: Click here
• SAP Controlling – Profit Center Accounting: Click here
• SAP FI MM Integration: Click here

How to Configure and Execute Distribution Cycle in SAP