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Calculating Results Analysis for Internal Orders

Dear reader,

Through this blog post, I would like to share the detailed configuration steps required to perform Results Analysis as well as Work in Process calculation for an Internal Order in SAP S/4 HANA.

An example real time business scenario is as follows :

In a manufacturing company, Internal Orders are used to manage Licence costs, so that these costs can be easily separated from Research costs, and other general expenses. Internal Orders of a certain order type are being used to manage the profit/loss incurred on account of buying/selling licences. For example, a licence is managed for a period of 10 years, and the corresponding profit or loss recorded on piecework payment basis is settled to CO-PA periodically. WBS elements are not involved in this business scenario.

So, first let’s look into the step by step configuration required for calculating RA.

Step 1. Create Results Analysis Key.

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Create Results Analysis Keys

You can copy the SAP delivered RA Key 000001 to create a custom RA key.

Step 2. Create Cost Elements.

Just for the sake of simplicity, I am creating only 3 Cost Elements of Category 31 here.

In S/4 HANA, Cost elements of category 31(Order/project results analysis) cannot have a Company Code view.

9311001 (Fixed Costs)

9311001 (Variable Costs)

9311003 (Technical RA Cost Element)

Step 3. Define Results Analysis Versions

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Define Results Analysis Versions

The checkbox “Transfer to Financial Accounting” has to be selected only after all the configuration has been done.

Step  4. Define Valuation Methods for Results Analysis

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Define Valuation Methods for Results Analysis

Step 5. Define Line IDs

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Define Line IDs

Line ID is nothing but something to which the G/L accounts to which contain the costs/revenue are mapped.

Step 6. Define Assignment for Results Analysis

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Define Assignment for Results Analysis

In this step, the line IDs created above are mapped to the cost elements which will be used for making actual postings on the Internal Order.

Step 7. Define Update for Results Analysis

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Define Update for Results Analysis

In this step, the line IDs created above are mapped to category 31 cost elements. These category 31 cost elements will be used to write the results analysis data.

Step 8. Define Posting Rules for Settlement to Financial Accounting

IMG Path – Controlling>Product Cost Controlling>Cost Object Controlling>Product Cost by Sales Order>Period-End Closing>Results Analysis>Define Posting Rules for Settlement to Financial Accounting

The detailing explanation on this node has been copied from the SAP IMG documentation of this node, and pasted here just for the readers’ quick reference. This explanation can also be found at the below SAP help link:

https://help.sap.com/doc/saphelp_46c/4.6C/en-US/be/f42c7dd435d1118b3f0060b03ca329/content.htm

Here you specify the G/L accounts in Financial Accounting to which the results analysis data is settled. You assign a results analysis cost element or a group of results analysis cost elements to two G/L accounts.

On the basis of the settlement of the results analysis data, a posting document is generated in Financial Accounting.

•Data is written to the balance sheet.

•Data is written to the profit and loss statement.

On the basis of this posting, an additional document is generated in Profit Center Accounting if the order is assigned to a Profit Center.

Settlement is made by period on the basis of

•The allocation structure in the settlement rule of the internal order

•The posting rules that you define in this step

All cost elements under which results analysis data to be settled are written (such as reserves for unrealized costs, work in process, cost of sales) must be listed in the allocation structure. They must also be assigned to G/L accounts by the posting rules.

Settlement of data to Profitability Analysis is controlled by a PA allocation structure. In the PA transfer structure you list the results analysis cost elements for the revenues, reserves for imminent loss and cost of sales. Then you assign these cost element groups to value fields (see Create PA transfer structure).

You can assign the results analysis data to the G/L accounts at the following levels:

•For each results analysis category

The following results analysis categories are created on the basis of the assignment of the costs to line IDs:

◦WIPR – work in process with requirement to capitalize costs

◦WIPO – work in process with option to capitalize costs

◦WIPP – work in process with prohibition to capitalize costs

The above configuration steps are enough for performing Results Analysis, and calculating WIP for an Internal Order.

Let us now see using an example how, based on the above configuration, WIP is calculated for an Internal Order.

Below are the steps involved in testing the above configuration:

1. Create an Internal order and assign the RA Key created above to it. I have created an I.O. 400760 and assigned RA Key ZRKY01 to it.

2. Using transaction code KPF6, post plan costs to the Internal Order.

3. Using transaction code KPF6, post plan revenues to the Internal Order. If actual revenue is posted, but plan revenue is not posted, then the system throws an error while executing Results Analysis for the order.

4. Post actual costs to the Internal Order using transaction FB01.

5. Post actual revenue to the Internal Order using transaction FB01.

6. Execute Results Analysis using transaction code KKAI or KKA1.

KKAI ⇒ For Multiple Internal Orders. Results analysis is updated in table COSB automatically.

KKA1 ⇒ For a single Internal Order. Results analysis is not updated in table COSB automatically.

Double clicking on the above line gives the below detailed screen. (same as tcode KKA1)

Costs Affecting Net Income = (Actual Cost * Actual Revenue) / Plan revenue

= (10000*30000)/35000 = 8571.43 USD

WIP = Actual Costs – Costs Affecting Net Income =  10000-8571.43 = 1428.57 USD

Below SAP help link contains the formulas for calculating a few more fields.

https://help.sap.com/doc/21ccd8530439414de10000000a174cb4/2.6/en-US/4a62c4535cdeb44ce10000000a174cb4.html

After an update run using tcode KKAI, table COSB is updated with RA values.

I hope the above blog post helps in clarifying the steps involved and the prerequisites of Results Analysis & Work in Process calculation for Internal Orders with Planned Costs & Revenues.

In my next blog post, I would like to explain in detail about settlement of an Internal Order to CO-PA.

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