controlling is a system for supporting the planning, control, and monitoring of corporate activities that provides the management with the information for its decisions.
The term comes from the American „to control“, which means „to control“ and „regulate“. Controlling is therefore much more than just controlling and must not be equated with control. There is no uniform definition. The literature distinguishes several approaches, such as a coordination-oriented, an information-oriented, and a planning- and control-oriented view.
tasks
The controlling department coordinates planning, control, and monitoring and ensures the information supply to the management. It continuously checks whether the budgets are met in the target-actual comparison. Subsequently, it analyzes deviations, seeks their causes, and advises on countermeasures. The management itself makes the decisions. The operational controlling is short-term oriented and works with metrics such as revenue, costs, coverage ratios, or liquidity. The literature distinguishes this from strategic controlling. Legal regulations do not apply to controlling: each company designs it according to its own needs.
Data base and connection to SAP Business One
The typical data source for controlling reports is cost accounting. Cost accounting provides information about operational activities. Controlling uses this information for future-oriented planning and control. In SAP Business One, cost accounting is located in the Finance module. Companies can create up to five dimensions, for example departments, branches, and product groups. Segmentation rules distribute amounts to cost items, for example as percentages or by square meters. The reconciliation report Cost Accounting compares the GuV balances with the amounts per dimension. The sum of the cost accounting GuV and the unallocated amounts (column „Company-related“) yields the GuV.
Demarcation
Controlling is not the same thing as control. The glossary term Web Controlling means something else, namely web analysis.
Link to the post
The article links controlling with cost accounting and performance measurement. The relevant sources support this connection: Cost accounting provides the controlling department with the data it needs, for example for variance analyses.
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