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SAP Profitability analysis configuration
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SAP Profitability analysis configuration
updated Apr 8, 2010 9:29 am | 35,714 view s
CO-PA Profitability Analysis
CO-PA Profitability Analysis is a drilldown report which allows slice & dice multi-dimensional sales profitability analyses by variety of analytical segment (which is called Characteristics) such as market / region, product group, customer group, customer hierarchy, product hierarchy, profit center etc.., most of those characteristics can be filled in by standard SAP functionality i.e. customer master or material master. By making Distribution Channel as a characteristic, CO-PA enables more flexible analysis. Distribution channel is filled in when sales order is created. User can differentiate distribution channel if they need to take separate analysis (such as between wholesale / retail, goods sale / commission sale / service sale etc..) without maintaining master data. (The customer & material master maintenance hassle caused by multiple distribution channels can be solved by VOR1 (IMG Sales and Distribution > Master Data > Define Common Distribution Channels).) CO-PA allows to take in non SAP standard data by using External Data Transfer, but the major benefit of CO-PA is that it has close relation with the SAP SD module. SD profitability data is automatically sent forward and stored within the same system. In fact, SAP SD module without CO-PA Profitability Analysis is like air without oxygen. It is pointless using SAP without it. Overhead cost allocation based on sale is possible by CO-PA, which is not possible in the cost center accounting. Gross Profit report is possible by sales order base (as a forecast, in addition to billing base actual) by using cost-based CO-PA. CO-PA is especially important since it is the only module that shows financial figures which is appropriate in terms of cost-revenue perspective. For this reason, BW(BI) is taking data from CO-PA at many projects. BW(BI) consultants are sometimes setting up CO-PA without FI/CO consultants' knowing. CO-PA captures cost of goods sold (COGS) and revenue at billing (FI release) at the same time (cost-based CO-PA). This becomes important when there is timing difference between shipment and customer acceptance. COGS should not be recognized, but FI module automatically creates COGS entry at shipment, while revenue entry will not be created until billing (or FI release). Such case happens when for example customer will not accept payment unless they finish quality inspection, or for example when goods delivery takes months because goods are sent across by ocean etc.. [pdekyvere: It is especially delicate to customize the copa infosource to map to your specific operating concern. This seems to be easier since ECC6.0 Enh pack 4 (auto generated).] For this point, CO-PA (cost-based) does not reconcile with FI. But this is the whole point of CO-PA, and this makes CO-PA essential. Account-based CO-PA is more close to FI module in this point. Account-based CO-PA is added later on, and it could be that it is simply for comparison purpose with the cost-based. Cost-based CO-PA is used more often. When CO-PA is used in conjunction with CO-PC Product Costing, it is even more outstanding. If fixed cost and variable cost in CO-PC cost component are appropriately assigned to CO-PA value fields, Break-Even-Point analysis is possible, not to mention contribution margin or Gross Profit analyses. Consider that BEP analysis or GP analysis are possible by detailed level such as market / region, product group, customer group etc.. This is not a surprise. CO-PC is for COGM and inventory. CO-PA is for COGS. What do you do without CO-PA when you use CO-PC? It’s a set functionality. This doesn’t necessary mean CO-PA is only for manufacturing business, though. Conservative finance/sales managers are reluctant to implement SAP R/3 sometimes because they are frightened to expose financial figures of harsh reality. Needless to say it helps boosting agile corporate decision-making, and this is where top-down decision to implement SAP R/3 is necessary. Those managers will never encourage R/3. SAP R/3 realizes this BEP analysis even for manufacturing company. No other ERP software has realized such functionality yet. Even today R/3 is this revolutionary if CO-PA is properly used. Role of capturing COGS-Sale figures is even more eminent in the cases of sales order costing or Resource Related Billing, and Variant Config (configurable materials) with PS module or PM/CS module. (Equipment master of PM/CS is also a must to learn.) After determining WIP by Result Analysis, CO-PA is the only module that displays cost-revenuewise correct financial figures. PS is necessary for heavy industry or large organization, Variant Config (configurable materials) are also handy for large manufacturer or sales company. RRB is usable to non-manufacturing industry. RRB is indispensable for IT industry or consulting companies. The importance of CO-PA will be proven if used with these.
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This is where experience makes difference. Customer Support Software with Account & Contact Mgmt DOWNLOAD YOUR FREE TRIAL TODAY! www Integrated Desktop Management Software Affordable Web-based Windows Desktop Management Software for Enterprises. If you set up created CPU date (HZDAT) as an Index Key of your COPA db (CE1xxxx) (maybe development or technical topic). an FI/MM interface allows you to post to specific COPA value fields for FI or MM based transactions (overheads or non-trade specific charges that impact the product profitability) such as trade show expenses etc. If you f eel a w iki article is inappropriate. Disclaimer: IT Wiki is a service that allow s content to be created and edited by anyone in the community. What SAP does is. keep Segment Level Characteristics as little as possible. and 4 other user-defined derivation segments as Segment Level Characteristics. simply because you are ignorant of anything more than CCA Cost Center Accounting or PCA Profit Center Accounting? Naturally it takes time to apprehend overall SAP functionality.] Actual cost component split is also possible with ML. Training course of CO-PA is just 5 days. Then why bother creating additional work of building BW(BI)? It is not the first thing to turn to. sales rep in the sales order line level. COGS. This is why many FI/CO consultants are ignorant of CO-PA and CO-PC.11/25/2010 or consulting companies. They are not eager to keep trainees to have the right understanding of how to use their product. Delta extract for the BW cube works fine even after 5-7 years or more. Now SAP users don't know such history. They made excuses that they didn't have enough resource to do that. [pdekyvere: ML can also be used to reflect transfer pricing or group valuations with specific buckets into copa value fields. but nothing much was made possible from an accounting point of view.. and completely ruined CO-PA database.e. material code. It was once a controversy. Why adding segment levels every time you have reshuffling? No matter how you have new tool. which makes no wonder.] Configuration of CO-PA can sometimes be a bit of hassle. They have corporate reshuffling and need to revise product lineup. Data segregation from program logic. Free Trial Download ! DOWNLOAD YOUR FREE TRIAL TODAY ! w …toolbox.com IT HelpDesk & Customer Support Software Internal IT HelpDesk Software with Asset Mgmt. Suggested Links Is security important to database execs? Download this study for a 2011 outlook on database security risk and compliance. www. 6 user-defined product hierarchies on top of standard product hierarchy. If you know what you do with BW(BI). and repeat the same failure. and only an experienced consultant knows its necessity.com. You will see there is more to learn about it in addition to that. they link 5 customer hierarchies. It's not tool itself. there's no end. Why do you cripple standard SAP functionality. One point which has to be added is. Content posted to this site is not review ed for correctness and is not supported by Toolbox. That gave birth to SQL database which SAP is running on. you can either correct it by clicking "Edit" above or click here to notify Toolbox. not made to WIP. This is something SAP should have rectified long time ago.appsecinc. Variance reallocation whose origin is unknown is only made to COGS and FG. CO-PA is a must for experienced FI/CO consultant.com or any of its partners. in a practical sense. But it is far easier. You would do data archiving by the time it face any problem. developing BW. [pdekyvere: COPA can also handle planning and actual/plan reporting. Segment data is stored at sales order line level unless you configure summarization. cheaper and quicker than building infocube in BW(BI) from the scratch. Realtime consolidation became impossible in SEM-BCS. Variances originated from WIP or Finished Goods at month end all go to COPA i. Actual Costing by using ML Material Ledger solves this issue for the most part. Settling production variances to COPA raises one issue. Whatever they were thinking in adding 45 segment levels. and maybe 2. in many projects they take data from CO-PA table. SAP is whimsical and they sometimes exclude CO-PA. and it is always a struggle. There are projects who had to develop production variance reports because they kicked COPA out of the scope without ever considering SAP standard functionality. data normalisation and elimination of duplicate entries. it has a built in forecasting engine (planning framework) and can handle top down or bottom up planning (using different versions. You can download the segment data. but you have to plan well in advance lest you use up value fields. SAP Profitability analysis configuration Production Cost Variance analysis is possible by assigning variance categories to different COPA value fields in the customizing. then maintain product hierarchy. they spent all their resource and effort in only revising the same functionality using the new technology. as well as plan allocations and distributions from Cost centers. I sometimes hear users linked too many characteristics. SEM-BCS. The importance of CO-PA will be proven if used with these.com/…/SAP_Profitability_an… 2/3 . Competent consultant should not spare such small investment. or New G/L on the other hand. CO-PC from the academy curriculum. and New G/L isn't adding much of new functionality other than parallel fiscal year variants. Data feeding and presentation in BW maybe another way. Now their CO-PA table doesn't respond other than short dump in 3 years usage. It's people who is twisting the case. SAP clearly explains and dissuades from just adding sales order as segment level. If you look in their config. Successful usage would be product hierarchy 1. this may be a remedy.
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