Article 47: What are Account Assignment Categories in Purchase Requisitions?

What is Account Assignment?

Account Assignment in Purchase Requisitions determines where the costs will be charged when materials or services are procured. It ensures proper financial tracking and budget control.

Why is Account Assignment important?

• Cost tracking - shows which department/project incurred the expense
• Budget control - prevents overspending by organizational unit
• Financial reporting - enables accurate cost allocation
• Compliance - meets internal and external audit requirements

What are the main Account Assignment Categories?

Cost Center Assignment (K)

When to use:

• General departmental expenses
• Operating costs not tied to specific orders
• Administrative and overhead items
• Maintenance and facility costs

Information required:

• Cost Center number (e.g., 1000 for HR Department)
• GL Account for expense classification
• Company Code if multiple entities

Example: Office supplies for HR department charged to cost center 1000

Order Assignment (F)

When to use:

• Production orders requiring additional materials
• Maintenance orders for equipment repair
• Internal orders for special projects
• Network orders for complex projects

Information required:

• Order number (production, maintenance, or internal)
• Order type to validate assignment
• Settlement rules for cost distribution

Example: Raw materials for production order 1000567

Project Assignment (P)

When to use:

• Project-specific materials and services
• Customer projects with separate billing
• Capital projects with dedicated budgets
• Research and development initiatives

Information required:

• WBS element (Work Breakdown Structure)
• Project definition for authorization
• Network activity if applicable

Example: Consulting services for customer implementation project

Asset Assignment (A)

When to use:

• Capital equipment purchases
• Asset improvements and additions
• Under construction assets
• Asset retirements and disposals

Information required:

• Asset number being created or modified
• Asset class for classification
• Capitalization rules and thresholds

Special Assignment Categories

Subcontracting (L):

• Materials sent to vendor for processing
• Components for subcontracted operations
• Integration with production planning

Direct Material (blank):

• Stock materials for inventory
• No specific assignment beyond material
• Standard procurement process

How to choose the correct Account Assignment?

Ask these questions:

1. Who is requesting the material/service?
2. What business purpose does it serve?
3. Which budget should be charged?
4. Is it for production, project, or operations?
5. Are there special tracking requirements?

What validation does the system perform?

Automatic checks:

• Account assignment exists and is valid
• Authorization to charge the account
• Budget availability (if budget control active)
• Account assignment matching procurement type

Common errors and solutions: