Profitability Analysis in SAP S/4HANA and subsequently in Central Finance (CFIN)

Hello Guys,

In this blogs we will talk about the Profitability Analysis options in SAP S/4HANA and then further we will discuss about the product roadmap and handling COPA in SAP Central Finance.

Traditionally there were TWO forms of COPA (definition taken from online sources)

• Account-based CO-PA: The profitability segment is built out of G/L accounts and  characteristics. Account-based CO-PA gained much more importance as well as functionality with SAP S/4HANA Finance. Before, account-based CO-PA was often used to facilitate the reconciliation with the SAP General Ledger. With the integration of account-based CO-PA in the Universal Journal to build one single source of truth, SAP recommends that you activate account-based CO-PA with the implementation or upgrade to SAP S/4HANA Finance.
• Costing-based CO-PA: The profitability segment is built out of value fields and characteristics. Before SAP S/4HANA Finance and the Universal Journal, a lot of organizations were using costing-based CO-PA because of the functionalities it offered, such as the cost of goods sold (COGS) split or the price-difference split. Costing-based CO-PA did not gain any new functionalities with SAP S/4HANA Finance. The storage of data still takes place in separate tables and the reconciliation of costing-based CO-PA with the G/L is still a tough challenge.

Types of COPA in SAP S/4HANA

We all know about Account based and Cost based COPA. Lets talk about new areas

What is Combined COPA

• It can be defined as combination of Account based and Cost based COPA
• This is designed as “best of both worlds”
• Technically this is an enhancement of Costing-based CO-PA with additional persistence considering of 4 new tables CE9XXXX_XX
• It eliminates the shortcomings of previous versions regarding the reconciliation with GL, currencies and quantities
• Combined CO-PA can be run in addition to Account based or Cost based COPA

Combined COPA

• cPA can be activated as stand-alone or with Account Based or Costing Based or both activated
• cPA has its own configuration menu which may be called with transaction KEPSL

Simplified Profitability Analysis

• This is also known as Profitability Analysis in Universal Journal
• It’s a new form of profitability Analysis which is part of the new product SAP S/4HANA and is technically based on the former Account based CO-PA
• Reporting not limited by application boundaries

Treatment of COGS in Simplified PA

Before SAP S/4HANA, COGS are posted to one G/L account in accounting only. Details for manufacturing the product such as labor or material costs coming from the costing sheet, were not displayed but now Profitability Analysis has been refined to reflect the standard cost component split on the G/L account

Treatment of Production Variances i Simplified COPA

Before SAP S/4HANA, Product Cost Variances are posted to one G/L account in accounting only. Details of the variances were not displayed.But now Product Cost Variances, e.g. input price, quantity, scrap, can be defined as accounts and can be used in Profitability Analysis in Universal Journal Standard prices are used for produced materials

Product Roadmap

Path for customers with Active COPA

• Customers using Cost based COPA
  • No migration approach for historical data from cost based COPA available
  • New GL accounts or sales conditions may be required depending on present status
• Customers using Account based COPA
  • Migration approach for historical data from Account based COPA available
  • Programs read and migrate profitability segments to the Universal Journal table ACDOCA

This concludes the COPA introduction. In my next blog i will talk about the CO-PA in Central Finance

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