What is the purpose of defining Internal orders.?

An example would help us understand this much better.
Lets say in an organization there are various events such as trade fairs,
training seminars, which occur during the year. Now lets assume for a
second that these Trade fairs are organized by the Marketing cost center
of the organization. Therefore in this case marketing cost center is
responsible for all the trade fairs costs.

All these trade fairs costs are
posted to the marketing cost centers. Now if the management wants an
analysis of the cost incurred for each of the trade fair organized by
the marketing cost center how would the marketing manager get
this piece of information across to them? The cost center report
would not give this piece of info

Now this is where Internal Order steps in .If you go through all cost
center reports this information is not readily available since all the costs
are posted to the cost center.

SAP, therefore provides the facility of using internal orders which comes
in real handy in such situations. In the above scenario the controlling
department would then need to create an internal order for each of the
trade fair organized.

The cost incurred for each of the trade fair will be
posted to the internal orders during the month. At the month end, these
costs which are collected in the internal order will be settled from these
orders to the marketing cost center. Thus the controlling person is now
in a position to analyze the cost for each of the trade fair separately.

Thus internal order is used to monitor costs for short term events,
activities. It helps in providing more information than that is provided on
the cost centers. It can be widely used for various purposes .