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Acknowledgement
No task is a single man’s effort. Cooperation and coordination of various peoples at different levels
go into successful implementation of this book.
There is always a sense of gratitude, which everyone expresses others for their helpful and needy
services they render during difficult phases of life and to achieve the goal already set.
At the outset I am thankful to almighty that is constantly and invisible guiding everybody and have
also helped me to work on the right path.
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Controlling – Profitability Analysis SAP College
PREFACE
Congratulations on buying this book! This book is designed to provide a one stop reference for your
entire SAP COPA needs. In this book you will find as much SAP COPA configuration as can fit between
the covers. It is the one of the most comprehensive coverage of SAP COPA module available today.
Many topics discussed theoretically as well as practically in different chapters of this book. This book
is a humble attempt made to present the point along with comprehensive examples based on real
life implementation experience.
One thing which has eaten ninety percent of my time is detailed painstakingly captured screenshots
of real life live SAP COPA system. The snapshots are crystal clear and self-explanatory. Even if you
are not able to understand what is written, the screenshot will give you the glimpse of how the
configuration is done. Further the configuration menu paths are described.
This book is ideal for beginners and intermediates, who intend to understand COPA more deeply.
“Complexity kills. It sucks the life out of developers, it makes product difficult to plan, build and test,
it introduces security challenges, and it causes end-user and administrator frustration.”
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Table of Contents
Acknowledgement ................................................................................................................................ 3
PREFACE .............................................................................................................................................. 4
Table of Contents ................................................................................................................................ 5
Introduction ........................................................................................................................................ 7
1 Costing based PA........................................................................................................................... 11
1.1 Define operating concern ..................................................................................................... 11
1.1.1 Maintain characteristics ................................................................................................ 14
1.1.2 Maintain value fields ..................................................................................................... 20
1.1.3 Maintain operating concern ......................................................................................... 24
1.1.4 Assign controlling area to operating concern ............................................................... 29
1.1.5 Define Profitability Segment Characteristics ................................................................ 31
1.2 Master data ........................................................................................................................... 32
1.2.1 Characteristics Values ................................................................................................... 33
1.2.2 Characteristics Hierarchy .............................................................................................. 34
1.2.3 Characteristics Derivation ............................................................................................. 36
1.2.4 Define and assign valuation strategy ............................................................................ 47
1.2.5 Define keys for accessing material cost estimate ......................................................... 52
1.2.6 Assign costing key to any characteristics ...................................................................... 55
1.2.7 Assign value fields ......................................................................................................... 58
1.3 Flow of actual values............................................................................................................. 61
1.3.1 Define number ranges for actual posting ..................................................................... 62
1.3.2 Activate transfer of incoming sales order ..................................................................... 64
1.3.3 Transfer of billing document ......................................................................................... 75
1.3.4 Maintain PA transfer structure for direct posting FI/MM ............................................ 77
1.3.5 Order and Project settlement ....................................................................................... 81
1.3.6 Transfer of Overhead .................................................................................................... 87
1.3.7 Activate profitability analysis ........................................................................................ 92
1.4 End user process – Costing based PA.................................................................................... 94
1.4.1 Direct posting from FI ................................................................................................... 94
1.4.2 Transfer from sales order.............................................................................................. 98
1.5 Information system ............................................................................................................. 109
1.6 Tools .................................................................................................................................... 114
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Introduction
In order to sustain and thrive in this contemporary and dynamic environment, rapid and timely
decision making is more essential than to make right decision. Organization profitability is one the
core parameter to assess when it comes to designing organization goals, objectives and strategies to
achieve them. In this blog, I am going to discuss the tools incorporated in SAP ERP to analyse
organization profitability
In addition to mapping contribution margin accounting with actual and planned figures, the purpose
of CO-PA is to answer various business questions, for example:
These are just some of the questions that CO-PA can answer—provided you have customized it
correctly. As you will recognize from the various questions, CO-PA is designed as a sales controlling
tool. In principle, however, it can map all of the elements of contribution margin accounting down to
earnings before interest and tax (EBIT). Which CO-PA-relevant organizational structure is
advantageous here?
There is one alternative to COPA which is Profit Center Accounting and here are the the usage of
both applications.
If an organization wants to analyze its internal CO-PA is used to help organization to analyze
Profits and loss department wise or as per its profitability as per market segments by
different areas within your company, then it extracting sales, profit/loss and cost related
is recommended to used Profit center data from other modules like SD , Production
accounting. and MM.
EC-PCA can be used by companies in any CO-PA can be used by companies in any
branch of industry (mechanical engineering, branch of industry (mechanical engineering,
chemical, service industries and so on) and wholesale and retail, chemical, service
with any form of production (repetitive industries and so on) and with any form of
manufacturing, make-to-order production (repetitive manufacturing, make-
manufacturing, process manufacturing). to-order manufacturing, process
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In EC-PCA we structure the units which we The market segments are structured like
want to evaluate as Profit centers. You can product, customers, orders,
create profit center according to region other characteristic and Organization units
(branch offices, plants) function (production, such as company codes or business area
sales), or product (product ranges, divisions). wise. It support management in decision
making by provided in-depth reports from
market oriented viewpoint
In order to use functionality of CO-PA (Profitability Analysis), the operating concern must be create
which is highest hierarchical unit in combined FICO module. The structure and assignment of
operating concern, controlling area and company code is shown in the figure below,
In an SAP system, the operating concern is the organizational unit responsible for Profitability
Analysis (COPA). What are organizational units in the SAP system? You usually use organizational
units to map your company structure: you set up company codes for your independent accounting
units; you create sales areas in SD; you define plants etc. for MM and PP. The entire remaining
customizing of your SAP system is based on this organizational representation of your company
structure. The organizational structure is the backbone of your system.
In an operating concern, you define all operating concern-relevant master data that you need for
your subsequent work with CO-PA. You then assign the operating concern to one or more controlling
areas. Here I would recommend a 1:1 relationship—i.e., assign the operating concern to only one
controlling area. You may wonder whether it makes sense to define a 1:1 relationship here when
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you will want to evaluate data across the group or company later on. Your thinking is correct, but the
clue is in the assignment of controlling areas to company codes: a controlling area is the
organizational unit of the CO module—you can assign one or more company codes to one
controlling area. To enable you to perform evaluations across the group or company (and not only in
Excel or a business warehouse, which would lead to further costs), you have to assign all of your
“live” company codes to one controlling area. You then assign this controlling area to the operating
concern. This ensures that you can see not only your costs across the group, but also your revenues,
contribution margins, and of course, your profit.
However, to work with only one operating concern, all controlling areas and company codes must
work with the same fiscal year variant, generally K4 (here, the fiscal year corresponds to a calendar
year with four special periods). All company codes must also use the same chart of accounts.
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PA module is the most important module, when it comes to analysing the results of organisation.
In profitability analysis you basically collect the revenues from the sales order, the cost from the
production order, cost center or internal order and analyse their results.
The interesting part about PA is that when it collects the cost and revenues it also collects the
characteristics associated with costs and revenues and this is what makes it stand out.
The aim of the system is to provide your sales, marketing, product management and corporate
planning departments with information to support internal accounting and decision-making.
Costing-based Profitability Analysis: It is the form of profitability analysis that groups costs and
revenues according to value fields and costing-based valuation approaches, both of which you can
define yourself. It guarantees you access at all times to a complete, short-term profitability report.
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1 Costing based PA
We will configure operating concern 7000 (Organisational structure of CO-PA). Controlling area FS00
is assigned to operating concern. Company code FS00 is attached to controlling area.
An operating concern represents an organizational unit in your company. It is the valuation level for
Profitability Analysis (CO-PA).
Structure
We can use user-defined and sap delivered structures and value fields.
SAP Easy Access Controlling -> Profitability Analysis -> Structures -> Define
Operating Concern -> Maintain Operating Concern
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The operating concern 7000 is created and activated, but before activating operating concern we
need to define or select characteristics and value fields for operating concern. So in below step we
will see how to configure characteristics and value fields.
Master Data in CO PA
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Several essential and obvious characteristics are pre-defined automatically for every operating
concern; these are known as fixed characteristics.
In addition to fixed characteristics, up to 50 non-fixed characteristics can be added to an operating
concern.
To derive values of these characteristics, it is necessary to create derivation rules or table lookup
rules unless they are readily available in the sender application (For e.g. in SD data flow to CO-PA,
fields on the billing document).
Characteristics derivation makes it possible for the system to automatically derive unknown
characteristics value (especially for user defined characteristics) if these are dependent on
characteristics whose values are known.
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SAP Easy Access Controlling -> Profitability Analysis -> Structures -> Define
Operating Concern -> Maintain characteristics
Click on display.
Following screen shows available and created CO-PA Characteristics in the TSQ system.
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Click on
Then click on
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Inputs:
We have created this characteristic from scratch (without any reference), so we need to update it
manually at the time of posting.
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Click on
After activating characteristics you can see the status of characteristic and generated table.
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Value fields are nothing but values associated with the above characteristics. Once you have defined
the characteristics then you need to determine, what are the values you would like to analyse for
e.g. sales, raw material cost, labour cost etc.
Value fields are only required in costing-based Profitability Analysis. These are the fields that contain
the currency amounts and quantities that you want to analyse in CO-PA.
Meaning of value fields → In costing-based Profitability Analysis, value fields store the base
quantities and amounts for reporting. Value fields can either be highly summarized (representing a
summary of cost element balances, for example) or highly detailed (representing just one part of a
single cost element balance).Unlike characteristics, there are no fixed value fields for a new
operating concern.
SAP Easy Access Controlling -> Profitability Analysis -> Structures -> Define
Operating Concern -> Maintain value fields
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Note: Value field should begin with VV and should 4 to 5 characters total.
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Click on activate.
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The operating concern is the main organizational unit in CO-PA, just as the plant is for MM, the
company code for FI, and the controlling area for CO.
The operating concern has a higher organization level than the controlling area; you can have an
operating concern that combines multiple controlling areas or just one controlling area.
Before you can execute some of the functions for Profitability Analysis (CO-PA), you first need to
specify the operating concern for which the function is to be performed and the type of Profitability
Analysis (costing-based or account-based) you wish to use.
Now that you’ve created the field catalog for characteristics and value fields, you must define the
operating concern and assign the characteristics and value fields to the operating concern.
In costing based we define operating concern by selecting the characteristics and the value fields to
be used in data structure.
SAP Easy Access Controlling -> Profitability Analysis -> Structures -> Define
Operating Concern -> Maintain operating concern
In this screen, define the operating concern as a four-character alphanumeric field, give it a
description, and indicate whether it is costing-based or account-based operating concern. You must
first define its attributes before creating the data structure for the operating concern.
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You can run any CO-PA report in the controlling area currency and also in the company code cur-
rency. You can also select to store profit center valuation currency; this currency will then be
available in the CO-PA reports.
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After defining the Attributes tab, return to the Data Structure tab, save the operating concern, and
Select the characteristics from left side and add it to right side.
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Now click on value field tab to add value fields in operating concern.
Once done with adding value fields and characteristics to operating concern, click to activate
the data structure.
The below message will generate
It is important to note here that no customising request get generated here. You have to transport
the setting through a separate transaction code called as KE3I.
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When you transfer data to Profitability Analysis, the system derives the appropriate operating
concern from the controlling area, and derives the controlling area, in turn, from the company code.
In Customizing, therefore, you have to assign each operating concern at least one controlling area.
Generally, you assign several controlling areas.
SAP Easy Access IMG -> Enterprise structure -> Assignment -> Controlling ->
Assign controlling area to operating concern
Transaction code
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Click on save
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In this step, you specify whether a characteristic in CO-PA is used to create profitability segments.
Characteristics that are used to create profitability segments are available for the information
system and in planning, for example.
Characteristics that are not involved in the creation of profitability segments remain in their line
item in CO-PA.
Frequently occurring characteristics that rarely bear the same value (such as the sales order number
for a repetitive manufacturer) can thus be excluded from the creation of your profitability segment.
In this way, you can improve the performance of your profitability analysis considerably.
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When a value flows from SD, MM, CO, and FI to CO-PA, it will create a line item in the CO-PA tables.
The way you customize the master data will directly impact how the characteristics and value fields
are populated in the line items. Below is one example of a CO-PA line item.
You can see that the characteristics were populated automatically by the system in above snapshot.
You can change the behaviour of the assignments and also complete the missing ones. It’s very
important to have all characteristics filled for each posting so that the CO-PA reports you run for any
characteristic are complete.
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Characteristic values
Characteristic derivation
Valuation
When you created the field catalog for characteristics, if you defined any fields as custom
characteristics with own value maintenance, you now need to create the values for these
characteristics to be used in CO-PA. This means that the values for the characteristics will be
selected from values in a table you define.
SAP Easy Access Controlling -> Profitability analysis -> Master data ->
Characteristics values -> Maintain characteristics values
For operating concern 7000, there is only one user defined characteristics available
Add values in region table by clicking on it.
Here simply mention the region names and then it is added into the region table which is created
when we activated this characteristics.
Now when you post any document you will have options of regions to select or you can simply enter
the name of region in profitability segment tab and system will validate that region with the
available region in table.
And with this you can have region wise data to explore the stats.
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In a characteristics hierarchy, you place the characteristic values for a single characteristic into a
hierarchical relationship.
In the information system, you can run analyses on a characteristics hierarchy.
A characteristics hierarchy is made up of nodes that can be posted to. These nodes are the
characteristic values. Furthermore, you can add to the hierarchical structure by creating nodes that
cannot be posted to.
SAP Easy Access Controlling -> Profitability Analysis -> Structures -> Define
Profitability segment characteristics
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Select characteristics and enter the variant name, then click on create
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When the system can’t determine a value for the characteristic, or if in certain cases, you want to
override what has been defined by the system, you can create a derivation step to determine the
characteristic values during posting of the CO-PA documents.
Note: Derivations are used only for characteristics. You can’t modify value fields using derivations.
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The CO-PA derivations are defined by five different types of derivation steps:
Derivation rule - This rule is based on an “if-then” where you define a condition and a
derivation to use if the condition is met.
Table lookup - The system will read a specified table that contains a key that must exist as a
characteristic, and then it will derive the field content from this table to the characteristic if
the characteristic has the same definition as the table field. It can be used, for example, to
derive a value from the material master table that is not present in the posting document.
Move - This step will move a characteristic value or a constant to a target field.
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In below sections we will see the configuration for each characteristics derivation type.
1. Derivation Rule
SAP Easy Access Controlling -> Profitability analysis -> Master data -> Define
characteristics derivation
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In this screen, you’ll enter the step description and then build the derivation rule. In the Source
Fields area, you select the “If” condition for the derivation, and in the Target Fields area, you select
the “Then” field.
After defining the “If and Then” for the derivation rule, click on Maintain Rule Values button
to update the values for the Source Fields and Target Fields.
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Here you can see the rule, as per the rule, whenever the characteristic customer containing value
105 then the sales district characteristics will be updated as NORTH
Returning to the first customizing screen, two more tabs are left to discuss: Condition and Attributes.
In the condition tab, you can further restrict the derivation rule by defining user filters for the
derivation selection. The last tab, Attributes, shows additional options for the derivation rule.
With this condition, now the above derivation rule only be valid for IN country key
In the Attributes tab, you can define whether the system will issue an error when the derivation
doesn’t find a value to derive, define if the validation will have a starting date, and restrict the
validation by removing the from-to option.
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2. Table lookup
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Enter the table name, from which table you want the value in COPA field.
Source Fields
In the below image we can see that following information has to be maintained:
Origin (Table Name) and Origin Field (Field Name) from standard table
Origin (CO-PA) and Origin Field (Field Name)
This information works as the basic condition, in the below example we can see the KNA1-
KUNNR as source in standard tables and COPA-KNDNR in CO-PA Tables. This means the value
in COPA-ARTNR is to be passed on to table KNA1 under field KUNNR to identify the
information under target field.
Target Fields
In the below image we can see that following information has to be maintained:
Origin (Table Name) and Origin Field (Field Name) from standard table
Origin (CO-PA) and Origin Field (Field Name)
This information under KNA1-KTOKD i.e. Customer account group is identified in the table
for KTOKD value available from source field and is passed on to KDGRP field under CO-PA.
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The functioning of other two tabs condition and attributes is same here also; in condition tab we can
assign more condition to apply this rule, e.g. making this rule valid only for specific sales org.
3. Move
Hit enter
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And as required condition tab is also available as this kind of rule cannot be applicable for everyone
you can make it specific to any smallest object. E.g. you can validate this rule to one customer also.
4. Clear
Select clear
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As the name suggest, it will remove the values from field region in COPA.
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Valuation is optional functionality in costing based CO-PA which is used to extract or calculate
additional information in CO-PA which is not available at the time of data transfer to CO-PA.
In costing based CO-PA, you can define valuation methods to add more information to your
reporting analysis. From billing documents, the system will automatically add the values that have an
accounting posting in FI, such as revenues, discounts and quantities, to CO-PA. In valuation you
determine which cost estimate the system will use for value fields that can’t be directly obtained
from SD. If it is not available in cost estimate, you can also determine the value using a costing sheet.
Here we define valuation strategies and assign them to a point of valuation. Since we want to use
material cost estimate for valuation, we will check the material costing field and specify the quantity
field.
In this activity we simply manipulate the data before it goes to COPA. As you can see in the above
screenshot, system is getting input from sales order like quantity of product, revenue and discount
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then as per the valuation strategy system will find out the cost estimate of the product then multiply
it with quantity and find out the COGS of the product.
If we have assigned any cost sheet to it then cost of various objects will also get calculated as per the
formulas in cost sheet. (In above screenshot we can observe that the sales commission is calculated
on the amount of revenue.
So to conclude this activity, system gets an input of quantity, revenue, product customer and so on…
On that input system calculates the COGS as per the components maintained in cost component
structure. Various cost as per the cost sheet get calculated as well.
SAP Easy Access Controlling -> Profitability analysis -> Master data -> valuation -
> Valuation strategies -> Define and assign valuation strategy
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If you want to valuate using a material cost estimate, select the field material costing. You also need
to specify the CO-PA quantity field you want to use for the valuation.
Whatever COPA value field you will assign here system will consider the quantity from that field only
to multiply the cost of product/material.
Here in above snapshot you can also see that you have an option of assigning costing sheet to
calculate the overhead/sales related fixed expenses.
If you noticed SAP has not close the window here, they gave us one more option and with this open
a door of unlimited options. You can probably guess, the option is we can also assign a user exit to
our valuation strategy to get desired result by using all ifs and buts.
This is also one of the functionality of COPA which makes it stand out among other alternatives.
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You might get an idea now that for each point of valuation and each record type you could have
different valuation strategy.
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1. For Real time valuation of Sales order you can have specific valuation strategy with its own
functions.
2. For Real time valuation of Billing documents you can use different user exit than sales
order’s.
3. For periodic revaluation of project settlement you can use unique costing sheet.
4. And this list goes on and on……
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Product cost planning is used to determine the planned cost of goods manufactured for a finished
product. We access these material cost estimate to valuate data in CO-PA.
In product cost planning, you know that you can create costing variants for different purposes, such
as standard costs, simulated new costs, new production lines, new BOMs, and so on. In CO-PA, you
can bring these costs to your profitability reports. To determine COGS, for example, the system will
use Sales Quantity × Cost Estimate; if you’ve defined the cost component split, you can also add that
to the CO-PA.
You can also select the released cost estimate effective for the goods issue posting date, the valid
cost estimate for the posting date, or the cost estimate valid for a specific period or date.
Alternatively, you can set in the costing key to read the cost estimate from a different plant than the
plant in the posting.
SAP Easy Access Controlling -> Profitability analysis -> Master data -> valuation -
> Set up valuation using material cost estimate -> Define access
to standard cost estimates
Transaction code
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Here in this costing key we assigned costing variant, from where system will convey cost component
structure.
The idea here is to make you familiar with all the possibilities of the COPA. Probably you have come
to know now that we cannot cover all the aspects in one book but it is like formula of mathematics if
you know the formula then simply using it you can solve thousands of problem.
Now if you notice in above configuration screen of costing key, various options is in front of us, from
all of that we tried to choose or go ahead with the one which is used by most of the organisations.
After all it is a decision which is taken by coordinating with management. For e.g. here we have
selected that standard cost estimate should be transferred to COPA, but many organisation might go
with sales order cost estimate.
Going forward in same configuration you have to select the appropriate costing variant with costing
version.
You can have multiple costing keys for various organisational objects as per their need. We will see it
in upcoming pages.
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In costing variant, cost component structure is assigned where manufacturing cost of material is
tailored.
As COPA required the knowledge of product costing as a prerequisite and if you have that then this
is not hard science to understand the above snapshot and how material will be costed in product
costing. The costed value of material then flows to the COPA provided the check of the material
costing in valuation strategy should be applied.
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Now that you’ve created the costing key to access the cost estimate and also for the Material
Ledger, you must now define how the material cost estimate will be accessed by the system. You
have three options to define the assignment
The steps
In the first option, assign costing keys to products, you’ll make the assignment material by material.
This is mostly used when you need to define a different costing key for a specific material. We
recommend that you avoid using this option for all materials because you need to maintain the
customizing every time a new material is created. Use Transaction KE4H to assign the costing key to
individual materials.
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The second option, assign costing keys to material types, is most commonly used. We’ll describe
how to make the assignment using this option.
These user-defined assignment tables let you assign costing keys separately for each point of
valuation, record type and plan version. In addition to these source fields, which are automatically
contained in each assignment table, you can specify up to three characteristics in your operating
concern as source fields for determining the costing key. Thus you can assign costing keys not only to
certain "products" or "materials types", but to any combination of values of any characteristics. For
example, you could define an assignment table to assign costing keys to specific combinations of
"company code", "plant" and "product group".
SAP Easy Access Controlling -> Profitability analysis -> Master data -> valuation -
> Set up valuation using material cost estimate -> Assign costing
keys to any characteristics
Transaction code KEPC
Click on create
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Here we can see three default fields are there and we added two more characteristics there which
are company code and plant.
You can see here the costing key is assigned to the combination of point of sale, record type,
company code and plant.
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To use the cost component split, you must have created a value field for each cost component. To
assign the cost component to the value fields, either use Transaction KE4R, or go to…
SAP Easy Access Controlling -> Profitability analysis -> Master data -> Valuation -
> Set up valuation using material cost estimate -> Assign value
fields
Transaction code KEDR
Here we assign cost component structure from product cost planning to the value fields of our
operating concern.
Press enter
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In the first column, you define the point of value; in the second column, you define the cost
component. You can split the fixed and variable costs from the cost components in different value
fields if you want, by selecting 1 – Fixed amounts, 2 – Variable amounts, or 3 – Sum of fixed and
variable amounts, and then maintaining the value field.
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When a sales order or a billing document is posted, the system first checks whether valuation using
material cost estimates is active.
The type of costing that is to be used to calculate the cost of sales is specified in a costing key.
Costing keys can be assigned to different characteristic values. The cost components for cost of
goods manufactured from Product Cost Planning are assigned to value fields in CO-PA.
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In the preceding section, we discussed how to customize CO-PA to obtain values from cost estimates
and also how to use costing sheet to create additional values. Now you will see how to customize
CO-PA to directly import values from other SAP ERP components like SD, FI and CO.
CO-PA lets you assign all primary, profit-related postings and activities from the FI (G/L account
postings), MM (invoice receipts, purchase orders) and SD (sales orders) application components to
profitability segments.
Here we need to customize the following areas to transfer actual values from other components or
other CO subcomponents.
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Here you define a number range to be used for actual line item
SAP Easy Access Controlling -> Profitability analysis -> Flow of actual values ->
Initial step -> Define number ranges for actual posting
Click on intervals
Click on
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Note:
For actual data as well as for planning data, Profitability Analysis (CO-PA) generally stores all values
as positive in the individual fields.
Revenues, sales deductions, and costs should therefore be entered into separate value fields.
The cost element categories should correspond to those recommended by SAP. This is the
prerequisite for producing a true representation of the +/- signs in the transfer of actual data to CO-
PA. SAP recommends the following cost element categories:
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You can valuate incoming sales orders (as expected revenues) and transfer them from SD to
CO-PA in order to obtain an early estimate of anticipated profits. By analysing these data
characteristic values, you can obtain early profitability results of your business. Consequently, you
can create reports that not only reflect the course of actual profits and contribution margins on the
basis of billing documents, but also allow you to analyse these developments on the basis of
incoming orders. (To analyse incoming orders, specify record type A in the report. To analyse billing
data, specify record type F.)
This function is especially useful when there is a long span of time between when you open the sales
order and when you actually bill the customer. It allows you to react early and appropriately if you
notice any unexpected developments.
Features:
When you create or change a sales order, the system automatically transfers line items to
Profitability Analysis in real-time. You can determine in which period the sales order should appear
in CO-PA.
Period of the date of entry
This option means that the orders are updated under the same period in which they were created in
the system.
Period of the planned delivery or the scheduled billing dates
This option means that the order appears in Profitability Analysis in the period of the planned
delivery or the scheduled billing date. It thus comes closer to reflecting the expected billing
information.
Orders are updated according as follows, depending on how they were activated.
Sales order:
Date entered: 01.09.2019
This creates one line item with the quantity “40 PCS” in Profitability Analysis in September.
This causes two line items to be posted in Profitability Analysis. One contains the quantity “15 PCS”
in period 010, while the other contains “25 PCS” in period 011.
If the sales order is changed (either its values or characteristics), the line items already posted to
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CO-PA is completely cancelled, and new line items containing the new characteristics and values are
transferred from the order.
Access the transaction by:
SAP Easy Access Controlling -> Profitability analysis -> Flow of actual values ->
Transfer of incoming sales order -> Activate transfer of
incoming sales order.
Transaction code KEKF
Here we activating incoming sales order with entry date, so the data will be transferred to COPA on
entry date of sales order.
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In this section you make the basic settings required for posting data from the SD, FI, and CO
application components to Profitability Analysis. Which functions you need to carry out will depend
on your information requirements and on the applications you are using in your company.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Transfer of Incoming Sales Orders -> Assign Value Fields
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Generally CO-PA stores values in the table with a positive sign, leaving the negative sign to be
declared in the report form. Sometimes, it’s necessary to transfer the sign from SD. If it’s necessary
to transfer the sign, use the indicator in the last column shown in the assignment screen. This would
typically be used for reversals, credit memos, or returns.
For actual data as well as for planning data, Profitability Analysis (CO-PA) generally stores all values
as positive in the individual fields.
Negative values generally only occur for business transactions (such as reversals, credit memos or
returns) that revise the business transaction results when claims are processed or errors are
corrected.
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This is an important principle, particularly for the purposes of comparing actual values and planning
values, because the logic in the information system for calculating the contribution margin lines for
planning and actual values must be consistent.
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Here you assign all the quantity fields you want to transfer from the billing system to costing-based
CO-PA.
From SD, you can choose from the following options for quantity:
ABSMG: Sales quantity
BRGEW: Gross weight
FKIMG: Billed quantity
FKLMG: Billing qty in SKU
KBMENG: Cumulative confirmed quantity in sales unit
KLMENG: Cumulative confirmed quantity in base
KWMENG: Order Quantity
LSMENG: Required deliv. qty
NTGEW: Net weight
VOLUM: Volume
After defining which field you want to transfer as the sales quantity, you can then assign the CO-PA
field for the sales quantity.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Transfer of Incoming Sales Orders -> Assign Value Fields
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Note:
It is possible to subsequently post existing sales orders to Profitability Analysis. This is particularly
useful if you implement CO-PA after SD and you wish to transfer sales orders, for example, for the
current or previous periods to CO-PA.
You execute the function for posting sales orders subsequently in Customizing under Tools _
Production Start-up _ Subsequent Posting of SD Documents.
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Sometimes we have to raise credit memo only for the material price and not for the quantities so in
order to avoid the quantities getting reversed in CO-PA, you need to reset those value fields as well
as quantity fields in configuration.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Transfer of Incoming Sales Orders -> Reset value/quantity field
Now the credit memo raised with billing type G2 will not shows the quantities in CO-PA.
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Here we will configure sales order settlement profile and assign PA transfer structure to it.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Settlement of production variance settlement -> Assign PA
transfer structure to settlement profile
Transaction code SPRO
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SAP Easy Access Controlling -> Product Cost Controlling -> Cost Object
Controlling -> Product Cost by Sales Order-> Control of Sales-
Order -> Check Requirements Classes
Transaction code SPRO
The requirement class is further assigned to requirement type, which is assigned to item category in
our case.
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When billing document data is posted, the online transfer function transfers the values directly into
Profitability Analysis. In the process, it uses the record type F to generate a line item automatically in
Profitability Analysis for each item on the billing document.
The system transfers all the characteristics defined in Profitability Analysis and contained in the
billing document, along with the customer and product numbers, from the document to the CO-PA
line item.
If the system recognizes an error (such as in characteristic derivation) while posting billing data to
Financial Accounting or Profitability Analysis, it posts the billing document in SD anyway, but updates
neither Financial Accounting nor Profitability Analysis.
All revenues, sales deductions are defined as condition type in SD. In this step you assign this step
you assign these conditions type to the corresponding CO-PA value fields.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Transfer of billing document-> Assign Value Fields
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You can also work with a direct account assignment to Profitability Analysis. Costs are then directly
assigned to a value field, not first posted on an account assignment object (e.g., an internal order or
a cost center). This makes sense for cost elements such as inventory differences; perhaps you want
to analyse them by material in Profitability Analysis, but the material information gets lost when
costs first get posted on a cost center or an internal order and then are transferred to Profitability
Analysis.
Here you define the PA transfer structure which is used to post costs and revenues directly to
profitability segments. You specify how the cost elements are to be defined to the CO-PA value
fields.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Direct posting from FI/MM -> Maintain PA transfer structure for
direct posting
Transaction code KEI2
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SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Direct posting from FI/MM -> Automatic account assignment
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In the SAP System, you can settle internal orders (component CO), sales orders (component SD) and
projects (component PS) as well as production orders and run schedules with production cost
collectors (component PP) to profitability segments. These objects are used for various purposes
relevant to Profitability Analysis.
The steps we’ll now cover apply to order and project settlement, direct posting to FI/MM, and
settlement of production variances.
When variances are calculated in cost object controlling, on production order, you transfer these
variances – differentiated by cost element and variance category – to value fields in CO-PA.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Order and project settlement -> Define PA trf struc. For
settlement
Transaction code KEI2
After creating the PA transfer structure, mark the recently created one here A1, and double- click on
Assignment lines in the left side of the screen to create the lines of assignment.
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If you want to split the source costs to different value fields in CO-PA, you can create assignments for
each cost element or use groups of cost elements.
If you mark the field Qty billed/delivered, you can transfer production quantities to a quantity value
field in CO-PA.
Select one line in the right side of the screen, and double-click on source in the left side of the
screen, which will then bring you to the screen to define the source cost elements.
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In this screen, you define the range of cost elements or a cost element group to be the source of the
amounts to be transferred. You may also define if it will transfer all costs/revenues or variances on
production orders. If you mark to transfer variances on production orders, you must also define the
variance category you want to transfer by choosing from the following options:
After defining the source cost elements, double-click on Value fields on the left side of the screen to
define the receiver value fields in CO-PA
Click on New Entries, and in the right side of the screen, add the new value field. You can add up to
three value fields for each assignment: one for fixed amounts (1), one for variable amounts (2), and
one for the sum of fixed and variable amounts (3). If you use (3), only one value field is needed.
You must repeat this process until you’ve filled all assignment lines with a source and a value field.
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Now that you’ve created the PA allocation structure, you’ll need to assign it to a settlement profile
when you want to settle from orders, projects, or production orders.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Settlement of production variances -> Assign PA transfer
structure to settlement profile
Transaction code OKO7
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When we previously discussed costing sheets, you saw that you can create a costing sheet to
allocate overhead values, so that for every CO-PA document, the system will accrue a value for
overhead. As an alternative to this approach, you can also transfer using an allocation from CO-CCA
to CO-PA.
The most commonly used allocation is the assessment from CO-CCA to CO-PA.
These cost centers are first credited during production as the activities they perform (such as
machine hours and assembly hours) are required. The amount of the credit is based on the
quantities confirmed by production and on the activity prices (such as machine hour rates)
usually calculated in cost center planning. The balances that are thus achieved - or the over
absorption/under absorption remaining for the production cost centers due to the difference
between credits and actual costs - are transferred en bloc in periodic profit analysis to those
profitability segments in CO-PA that caused those costs.
Many companies transfer the costs from administrative cost centers to CO-PA en bloc instead of
allocating them to cost objects. This reduces the period results of the individual divisions,
product groups, or business areas.
Here we define actual assessment cycles for allocation actual costs from cost center to profitability
analysis.
SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Transfer of Overheads -> Access cost center cost -> Define
structure of cost center Assessment
Transaction code KEU1
Press enter
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In this screen, you need to define in the Indicators section if you want to split the costs into fixed and
variable or not (overall costs) by selecting either 1 – Unsplit Costs (Overall Costs) or 2 – Split costs
(separated in fixed and variable costs) for the sender select type. In the Preset Selection Criteria
section, you must also select the CO Area to identify whether the assessment is for costing based or
account-based CO-PA.
You can choose to either use a secondary cost element for assessment (category 42) or use an
allocation structure, where you can define assessment cost elements for a group of sender cost
elements.
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Click on the receiver tracing factor to decide the percentage for assessment
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Here 100 percent of the cost recorded in cost center will be transferred to mentioned value fields as
per this assessment rule.
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Here you activate the interface to the profitability analysis for the controlling area FS00.
Check the controlling area settings before activating the indicator.
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SAP Easy Access Controlling -> Profitability Analysis -> Flows of Actual Values ->
Activate Profitability analysis
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SAP Easy Access SAP easy access -> Accounting -> Financial accounting ->
Account Receivable -> Invoice
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In Profitability segment we have only entered the value of country let’s see what characteristics
flows to CO-PA
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SAP Easy Access SAP easy access -> Accounting -> Controlling -> Profitability
analysis -> Actual posting -> Display line item
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We can notice here that no other characteristics than country derived automatically.
As per analysis, we cannot derive characteristics like customer, automatically through any kind of
derivation rule at the time of posting from FI. The argument behind that is profitability segment is
assigned to revenue line item and it is not possible to find out the customer for that particular line
item.
Hence we have to update all required characteristics manually at the time of FI posting.
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SAP Easy Access SAP easy access → Logistics → Sales & Distribution → Sales →
Order → Create
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Here the requirement type is KEKT and to this requirement type the requirement class 042 is
assigned.
And in requirement class we have assigned settlement profile, which will called at the time of sales
order settlement.
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And if we further drill down to the settlement profile, we can see the PA settlement structure
assigned to the settlement profile.
Here we can see that the PA transfer structure XU is assigned to the settlement profile SOSET, but
we can also change it from sales order.
Now if you want to see through which structure the cost is going to settle down in COPA →
To see the generated COPA document relevant to sales order execute transaction KE24
Here we can see two documents are generated, one is in operating concern currency and one is in
company code currency.
Here we can see the values are updated in value fields which are assigned to the condition types.
But this report does not provide clear picture of the profitability, so we need to develop a report
that will suit to our requirement.
If you recall the chapter 1.2.4 Derivation rule, where we have maintained several derivation rules.
We will test one rule here, in order to know how the functionality works.
As per this derivation rule, for customer 104, sales district NORTH will automatically populate in SAP
Sales order:
Now if we open the CO-PA document of sales order, we can notice the sales district NORTH is arrived
as a characteristic via derivation rule. (Refer below Figure)
The CO-PA information system is mainly created by the user. SAP ERP provides one standard line
item report each for actual and plan, Report KE24 and Report KE25, respectively. For all other
reporting needs, you’ll need to build your own CO-PA reports using the Report Painter functionality,
in which you define a form and use it to create a report.
The advantage of creating your own reports is that you can create the result analysis lines as you
wish, depending on your needs. These custom reports provide multidimensional analysis of both
actual and planning data, using the characteristics you’ve defined in your CO-PA.
When defining your profitability report, you specify the different analysis criteria mainly by selecting
characteristics and value fields.
You find all the characteristics of the operating concern in the Characteristics tab page. In this tab
page, you can select the ones that you want to analyze. The characteristics that you select then form
the different dimensions of the "data cube" that you wish to analyze. If characteristic groups have
been defined for the operating concern, you can select one of those available in the Characteristic
group field. If you enter a characteristic group, the system only displays the characteristics in that
group, instead of all the characteristics of the operating concern.
Note: The amount of data that is called up for processing by the report is determined by the number
of characteristics selected and by which characteristics you select.
Then click on key figures tab and select the key figures.
You find all the value fields of the operating concern in the Key figures tab page. In this tap page, you
can select the ones that you want to analyze. If key figure schemes have been defined for the
operating concern, you can select one of those available in the Key figure scheme field. In this way,
the calculated key figures for the selected key figure scheme are added to the list of value fields.
Note: It is not always necessary to choose key figures for your report. If you are defining a form
report that uses a form for which key figures have already been specified, the Key figures tab page is
not displayed and you cannot select any key figures here.
How system fetch data from CO-PA tables? → explain in below graphic.
1.6 Tools
When customizing the different areas for CO-PA you’ll notice that for some, the system creates a
transport request and for others not. For example, in the operating concern definition, the system
won’t ask for a transport request, but for the section valuation, it will. Next, you’ll see how to
transport the operating concern settings.
1.6.1 Transport
The transport process in CO-PA differs from other CO subcomponents because it requires a user
action to be transported. To transport the operating concern definition and other areas for which
you need to create a transport request
SAP Easy Access Controlling -> Profitability analysis -> Tools -> Production
startup -> Transport
In this screen, you can select which object from the operating concern you want to transport. If you
mark Operating concern, you can select all operating concern customizing to be transported at one
time. The system will ask for two transport requests—one for customizing and the other for the
workbench.
Select the operating concern you want to transport, and then click on Execute. The system will
prompt a screen to define which operating concern customizing option you want to be included in
the transport request.
Select the customizing areas you want to transport, and then save.
If you’ve activated CO-PA in a production environment with data already in it, it’s possible to import
the old data to the newly activated CO-PA component.
SAP ERP provides a tool that you can use to bring existing SD documents to the CO-PA tables even if
they were created before the CO-PA activation. The system will import SD data according to the
current CO-PA customizing using the valuation strategy defined in the CO-PA customizing.
SAP Easy Access Controlling -> Profitability analysis -> Tools -> Production
startup -> Subsequent Posting of SD Documents
Enter the selection options for the documents you want to import and run.
If you defined a range where the system had already posted documents to CO-PA, it will post only
the documents that are not already posted in the component.
1.7 TABLES
The concepts line item and profitability segment are essential for understanding how data is stored
in CO-PA. A line item can be compared, for example, to an item in a billing document from the SD
component. The combination of characteristic values stored in a line item is what defines the
particular profitability segment to which the line item must be posted.
There is the table CE1xxxx for actual line items (where xxxx = operating concern), which contains all
the data at the most detailed level. Planned line items are stored in the table CE2xxxx.
There is also the segment table CE4xxxx, which is located at a higher level. It is used to assign
segment numbers to each combination of characteristic values. For the first summarization to be
performed, at least the document number and the billing item are hidden. The characteristics that
were deactivated from use in the profitability segment in Customizing are also hidden. Segment
table CE4xxxx should therefore be optimized for processing data within Profitability Analysis, such as
for the information system. Table CE4xxxx_ACCT contains external account assignment information
as well as the characteristics for CE4xxxx and serves as the "interface" to other applications.
Example
You have invoiced three documents for customer 0815. The first posting occurs in March (posting
period 003), and revenues of 100 DEM and 200 DEM are posted respectively for the products ART1
and ART2. The second posting occurs in April. Revenues of 400 DEM and 800 DEM are posted
respectively for the products ART1 and ART3. The third posting also occurs in April. Revenues of
1600 DEM and 3200 DEM are posted respectively for the products ART1 and ART3. When the line
items are posted, the segment table and segment level are updated, producing the following table
contents:
Takeaway
Reporting is a most important function of an ERP system. As it provides information for decision
making and operational analysis. It is also important to gather the relevant information on markets
and products to develop strategic goals. SAP COPA module offers the all necessary tools to meet all
business needs of reporting and analysing data for critical business decisions.
Summary
Then end result of most ERP functions is extracting and evaluating data. These chapters discussed in
this book has been learned and identified in the lifetime career. I hope this book has provided you all
the necessary knowledge and skills that you are looking for. Do submit your honest feedback on the
platform from where you have brought this book.