What is an SAP Internal Order?

Internal orders are cost objects in SAP Controlling. They act as temporary cost collectors for short-term projects or events. They are not as structured or permanent as cost centers. There is no standard hierarchy for internal orders, however they can be grouped.

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You configure the control parameters of SAP internal orders in the order type.

Internal orders have an advantage over cost centers in that you can plan, budget, and use availability control. This allows you to monitor spending for projects or events by comparing spending to plan, as well as limiting spending against a budget. Plan equals funds approved and budget equals funds appropriated.

Internal orders differ from cost centers since you can collect cost and revenue and utilize results analysis to determine profitability. 

As transactions are posted to internal orders, you can analyze the activity in real time with reports in the information system and branch to additional reports, accounting documents, and the source document. 

At the end of a period, amounts can be allocated from orders to other cost objects during settlement. Settlement may be to one receiver, or more complex using extended settlement to allocate to multiple receivers using several tracing factors. You can use periodic reposting to allocate costs from internal orders using, for example, statistical key figures. Internal orders can also be used as statistical cost objects where there is no further allocation or settlement.

Marjorie Wright is an SAP expert, speaker, and founder of Simply FI-CO, an SAP training and consulting company. She is also the author of SAP books: