Kurumsal Finans ve Strateji Rehberi | Finance & Strategy Insights

Period-end closing is not only essential for financial reporting but also plays a critical role in strategic decision-making. One of the most valuable tools within the SAP Controlling (CO) module is KSS2 (Actual Cost Splitting), which ensures the proper allocation of overhead costs within cost centers. By splitting costs into fixed and variable components, KSS2 strengthens target cost calculations and improves the accuracy of profitability analysis—particularly in manufacturing and service industries.

In this guide, we explore the core functions of KSS2, its differences from KSII, execution steps, integration with S/4HANA, a practical case study, and best practices. The content is based on official SAP resources and validated industry discussions to ensure accuracy and reliability.

What is SAP KSS2? Key Concepts

KSS2 (Actual Cost Splitting: Cost Centers) is a transaction in SAP ERP and S/4HANA that distributes primary and secondary costs across activity types, following predefined splitting structures. It is delivered under program SAPLKSS0 and package KABW.

Its main objectives are to:

• Allocate costs by activity type,
• Separate costs into fixed/variable components,
• Calculate target costs,
• Distribute activity-independent costs (e.g., maintenance expenses) based on equivalence numbers or activity quantities.

Incorrectly allocated overhead costs can distort product profitability. KSS2 reduces this risk and ensures tighter FI–CO alignment.

KSS2 vs. KSII: Key Differences

Feature	KSS2 (Actual Cost Splitting)	KSII (Actual Activity Price Calculation)
Objective	Splits costs to calculate target costs; distinguishes fixed/variable	Determines actual activity prices
Process	Executes splitting in CO area and object currency	Calculates prices in object currency
Sequence	Runs before KSII	Uses KSS2 results for price calculation
Focus	Target cost allocation	Price determination

In short: KSS2 applies planned distributions to actual data, while KSII uses these results to determine actual prices.

How to Use KSS2: Step by Step

Access Path:

• Transaction Code: KSS2
• Navigation: Accounting > Controlling > Cost Center Accounting > Period-End Closing > Single Functions > Splitting

Pre-requisites:

• Cost centers and activity types created (KS01, KL01),
• Splitting structures defined (KSS4),
• Primary postings completed before closing,
• Proper authorizations assigned (e.g., S_ALV_LAYO).

Execution Process:

1. Enter version (0), cost center range, and period/year.
2. Select the predefined splitting structure (from KSS4).
3. Run a test execution and review logs (via SM37).
4. Review results: target cost breakdown with fixed/variable split.
5. Perform real execution (Post Run) to generate CO documents.

Tip: Use test mode for large datasets; see SAP Note 597159 for advanced troubleshooting.

Practical Example: Textile Factory Case

Scenario: Maintenance cost center with €10,000 in overhead costs, split across two activity types:

• MACH (Machine hours): 70%
• LAB (Labor hours): 30%

Steps:

• Plan Splitting (KSS4): Assign equivalence numbers MACH = 7, LAB = 3.
• KSS2 Execution: €10,000 distributed → MACH €7,000 (fixed €4,000, variable €3,000), LAB €3,000.
• KSII Integration: Actual price per machine hour calculated (€/hour).
• Analysis: KSU5 report highlights a target/actual variance, leading to budget adjustments.

Result: Product costing optimized.

KSS2 in S/4HANA and Cloud ERP

With S/4HANA 2025, KSS2 gains enhanced functionality:

• ACDOCA integration for real-time reporting,
• Fiori applications for mobile and modern UI,
• AI-powered splitting suggestions via Joule assistant,
• Embedded analytics to visualize variances.

In Cloud ERP, automated period-end closing reduces manual effort in KSS2 processing.

Migration Tip: Use SAP Note 772794 to migrate legacy splitting structures.

Benefits and Best Practices

Key Benefits:

• Reliable target cost and variance analysis,
• Precise fixed/variable cost separation,
• Stronger audit compliance and FI–CO integration.

Best Practices:

• Run KSS2 monthly before KSII,
• Validate equivalence numbers in test mode,
• Track variances with KSU5 reports,
• Leverage SAP Learning Hub CO-CCA courses for skill development.

Conclusion: Strengthening Cost Control with KSS2

SAP KSS2 is more than just a technical closing step—it is a strategic enabler of cost control. By integrating with KSII and leveraging S/4HANA’s innovations, it ensures:

• Transparent profitability reporting,
• Optimized cost allocation,
• Reinforced internal controls.

For CFOs, cost accountants, and ERP professionals, KSS2 serves as a powerful lever for more accurate and strategic financial management.