What is SAP COPA?
SAP COPA is not similar to other modules in SAP.
Profitability Analysis (CO-PA) enables you to evaluate market segments, which can be classified according to products, customers, orders or any combination of these, or strategic business units, such as sales organizations or business areas, with respect to your company’s profit or contribution margin.
What are the differences between Profit Center Accounting (PCA) and Profitability Analysis (CO-PA)?
|PCA is aimed at Profit reporting on internal responsibility lines or SBU’s||CO-PA is aimed at external market segment reporting for example by customer and customer groupings (industries), geographical areas.|
|PCA is limited to reporting by the profit center hierarchies that you can setup.||PCA can slice & dice your information by a variety of dynamic hierarchies (a ‘Rubik’s’ cube is often used to symbolize this idea.|
|PCA can be reconciled easily back to the GL||PCA has 2 ‘styles’
Account based which will reconcile to the GL
· Costing Based which Allows approximations, estimations or standards to be posted, which may make reconciliation difficult to explain to the user
Why does SAP talk about statistical assignments in CO - why are these different from real Cost Accounting assignments?
The reason is to facilitate reconciliation between FI and CO. The sum of all ‘real’ assignments in CO should add up to the sum of all expense and revenue postings (where cost/revenue elements have been created for the GL account of course) in FI. A normal expense invoice posting to expense accounts / cost elements will be a ‘real’ posting. If the system is displaying an error message insisting on a ‘cost accounting assignment’ and you think you have entered one, then possibly you have specified a statistical assignment. A common error is in thinking that the business area will do – Business areas are FI elements not CO elements.
|All Profit Center assignments are statistical||EC-PCA is defined as statistical, therefore if posting to a revenue element, the system will insist on a real cost accounting assignment even if profit center is specified. A cost center will not do, since revenue elements are statistical in cost centers. The system will accept the following as ‘real’: CO-PA profitability segment, sales order, customer project or a revenue bearing order.|
|Revenue elements assigned to cost centers will always be statistical||‘Revenue’ when defined to the system by setting up a revenue element is always statistical in a cost center. If however you have setup your revenue accounts as primary cost elements then the assignment will be ‘real’.|
What do you mean by Period based accounting (GL based) and cost of sales accounting (COPA based)?
‘Period Based Accounting’ is Accrual Accounting and ‘Cost of Sales’ is ‘Cost of Goods Sold’ Accounting.
Period based Accounting
“Period based” means that during the month or period, all and only actual events / transactions are posted in the appropriate period. At the end of the period estimated accruals and deferrals are made and posted to that posting period to give a more accurate view of profit. IE any expected revenues and expenditures that should relate to the current period are accrued for and equally any prepaid expenses or revenues are deferred to the next period. (Accruals and Deferrals are posted temporarily, usually to special accounts, and reversed prior to the next period end.)
These accruals and deferrals are usually done at a fairly high level of summarization (eg: at company or business area). The FI Ledgers and financial statements etc are always period based.
Cost of Sales Accounting
Cost of Sales in SAP means that we attempt to record or rather report the “costs of sales” against the actual sale at as low a level as possible and during the period. (In CO-PA this is down to a transaction level.) This enables the company to get a reasonably accurate view of profitability on a real time basis.
This is done by using either standards or estimates for many of the components that make up the “cost of goods sold”. Any variations from the standards are usually posted through to the cost of sales system either at month end or when they occur.
For example: A product cost estimate might be used to calculate and post a manufactured cost through to CO-PA when every sale goes through. The actual production orders variances from the product cost estimate can then be settled to a separate line in CO-PA. This has the benefits that
a reasonably accurate gross profit could be reported in real time at a transaction level and of course therefore at all the characteristic levels in CO-PA.
The impact of any abnormal variances in production can quite clearly be seen and analyzed separately from the normal profitability of a product.
How data flows from SD to COPA?
The normal SD document flow is as follows:
Delivery (the delivery creates the goods issue, which debits COGS and credits Inventory – COGS is updated in CO-PA at this time)
Billing Document (the billing document updates A/R, Sales revenue, Discounts, Freight, etc.)
How data flows from CO to COPA?
Through Assessments. Allocates costs from cost centers to profitability segments.
How data flows through MM into FI?
Through Account assignment model OKB9. Automatic postings created in materials management, can be passed on to CO-PA by means of automatic account assignment to a profitability segment.
How data flows from PP into FI & COPA?
Through Production Variances It Posts variances from the production (product cost) estimates or standards to the GL accounts and to Profitability Analysis if real costs are required (vs standard costs). Standard cost figures would have been used to update Stock and Cost of Goods sold figures when finished stock was issued from the production runs.
What do you mean by value field groups?
Value Field Groups represent the possible combinations of value fields in an operating concern. Value field groups are used to specify:
Which value should be made available to users entering or displaying a line item
In what order these value fields should be displayed
Which specific value fields can be filled
You plan your data for the characteristics Product, Product group and Customer group. You define three planning levels for which planning data is to be entered: Customer group/product group (independent of the product), product/product group (independent of the customer group), and product/product group/customer group (the lowest, most detailed level). By using transaction-based top-down distribution, you can ensure that all planning data is saved at the lowest level
What are Characteristics Values?
Characteristics are aspects on which we want to break down the profit logically such as customer, region product, sales person etc.
What do you mean fixed characteristic fields?
Predefined characteristic fields in SAP R/3 system, which are obvious, are known as fixed characteristic fields such as product, sales org and customer
What are Non-Fixed characteristics or user defined characteristics?
Up to 50 non-fixed characteristics can be added to an operating concern. E.g. Bill-to-party
Create -> Derived the value from Table PAPARTNER (SD partner that can be used in COPA) -> Create user defined characteristic name WW008 -> Save