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S/4 HANA Real time COPA / Margin Analysis. Goodbye Periodic Jobs…

Why this solution was introduced?

Today, organizations are investing in advanced reporting solutions that can provide data real time. Real data is needed for faster decision making. Should they be waiting for periodic jobs like settlement or assessment for the profitability reports?

The USP for HANA has been real time profitability. When SAP launched their first HANA product i.e HANA COPA accelerator way back in 2011, it was advertised as a solution which can provide real-time profitability.

However, the real-time data in COPA only works for an organization, who just have revenue by sales of products. But today’s business is more complex and most of the multinationals earn significant  revenue by services, repair, revenue projects, make to order engineering, etc. in addition to traditional sales of goods.

Moreover, all these business processes other than traditional sales and delivery of goods relied on the settlement of cost object( internal order, service order, WBS elements) to COPA for profitability report. Therefore, we were getting on an architecture where although we have a very advanced in-memory reporting solution( either S/4 Hana or HANA as sidecar) but the data to feed those tables still relies on settlements, which is month-end process.

Additionally, for new margin analysis, some organizations rely on assessment/ distribution cycle for overhead costs from cost center to COPA, which being a periodic job delays the generation of reports.

Both settlement and assessment cycles are typically month-end jobs which organizations runs before the close of monthly books.

Additional info on margin analysis

Account-based COPA has been re-branded as Margin Analysis by SAP. It goes beyond the existing capabilities of account-based COPA and gives few balance sheet items like accrued revenue, deferred revenue. As it’s different topic in itself, I won’t be discuss in this blog.  More details can found in this link https://help.sap.com/viewer/5e23dc8fe9be4fd496f8ab556667ea05/1909.001/en-US/87b9bd54c3378e21e10000000a44176d.html .

What’s new with S/4 Hana ?

With S/4 Hana, SAP has tried to take care of this problem and COPA characters can be populated without settlement or COPA assessment cycles. This works on the best guess method where the SAP tries to get the COPA characters from either settlement rule or COPA derivation in case of cost center. Initial COPA characters populated during posting can be still rectified by settlement, if they are changes.

It’s called ‘derivation of items without profitability segment’. Configuration as below..

Let’s get in detail by following examples of Internal order and cost center.

Internal order

Once we activate this configuration, FI posting to the internal order, posted as standard as below.

Additionally, settlement rules are maintained as follows.

Finally, ACDOCA table is populated with profitability characters for the FI posting which will be used for reporting without waiting for settlements to be executed.

Please note it only appears on reports based on ACDOCA table and Fiori Margin Analysis reports. It won’t appear in KE24 line item report unless settlement is complete.

Cost Center real time COPA report without assessment

Cost centers are used to capture overhead and some organizations allocated them COPA for the net margin report.

The following configuration is required for real-time COPA reports without waiting for allocation.

and KEDR COPA derivation rule settings for COPA postings

     Finance posting in COPA is posted as usual.

And it leads to posting in ACDOCA table

Conclusion

This feature provided by SAP is very powerful and will help the organization is getting profitability reports without waiting for settlements job. Today, with big data, in-memory computing, and greater emphasis on data, this is quite significant feature and in my opinion, it’s an improvement that comes with S/4 Hana.

 

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