External labor is procured as a service from an external vendor. In SAP Project System (PS), a service activity or an externally-processed activity within a network generates a purchase requisition. This is converted into a purchase order in Materials Management (MM). When the external labor/service is performed, a service entry sheet is created and accepted to record the delivery of the service. The acceptance of the service entry sheet triggers the posting of the actual costs for the external service directly to the network activity specified in the purchase order's account assignment.

A. By activity allocation: This process is used to allocate costs for internal activities from a cost center to the network activity, not for external services.

C. By settlement: Settlement is a period-end closing process that distributes costs already collected on the network activity to other controlling objects; it does not post initial costs.

D. By confirmation: Confirmation records the progress and consumption of resources for internal activities, which then posts internal labor costs, not costs from external vendors.

1. SAP S/4HANA Help Portal

"Service Activity": "You use service activities to procure external services... When the services have been performed

you enter them in a service entry sheet... When you accept the services that have been entered

the system posts the actual costs to the network activity."

Source: SAP SE. (2023). SAP S/4HANA - Product Assistance - Project System (PS) - Service Activity.

2. SAP S/4HANA Help Portal

"Externally-Processed Activity": "The system creates a purchase requisition for the activity... The purchasing department uses the purchase requisition to create a purchase order... Costs for an externally-processed activity are posted to the activity when the goods receipt for the purchase order is entered." (Note: For services

the "goods receipt" is the acceptance of the service entry sheet).

Source: SAP SE. (2023). SAP S/4HANA - Product Assistance - Project System (PS) - Externally-Processed Activity.

3. SAP S/4HANA Help Portal

"Actual Costs in the Project System": This document outlines the various ways actual costs can be posted to a project. It clearly distinguishes between internal activity allocation

confirmations

and postings from external procurement (goods receipts and invoice receipts)

reinforcing that external services are posted via the MM procurement process.

Source: SAP SE. (2023). SAP S/4HANA - Product Assistance - Project System (PS) - Actual Costs in the Project System.