COPA in S4 HANA - A Changing trend COPA in S4 HANA
In the past, SAP advised companies to use costing-based CO-PA rather than, accountbased CO-PA. The main reason for this was: Companies wanted a contribution-margin report with a breakdown of their costof-sales down to the cost components level for each cost bucket They wanted a production variance report by variance categories They wanted a breakdown of the individual cost buckets beyond the total value that was posted to the general ledger. This functionality was not available in COPA account base before and therefor did the most companies use Cost Base COPA. The biggest issue with Cost based was the reconciliation effort, because cost base COPA did not use a direct alignment to the general ledger accounts. SAP’s latest SAP Simple Finance product , uses SAP HANA as its primary database, and opened up new options to build a COPA structures aligned with the general ledger. Due to this SAP enhanced Account-based CO-PA in SAP Simple Finance to provide: Detailed information on the cost of goods, break down cost-of-sales to the cost component of each cost bucket Production variances by variance categories Invoice quantities Reconciliation between COPA and the GL at Account level Due to this new functionality in Simple finance SAP is now advised companies to use account-based CO-PA and not costing-based CO-PA. DEFINE ACCOUNTS FOR SPLITTING THE COST OF GOODS SOLD
By default, the cost of goods sold is posted to a single COGS account as defined in the account determination settings for material movements. In this Customizing activity, you can refine the settings for COGS postings to split the COGS amount and post it to different accounts according to the cost component elements Steps:1. Create new G/L accounts on which you want to reflect the single cost components of the COGS posting. 2. Specify a splitting scheme for your chart of accounts and assign a cost component structure. The cost component structure groups the costs for each material according to cost component (such as material costs, internal activities, external activities, and overhead) 1. For each splitting scheme, specify the following information: Account to which all cost of goods sold are posted according to the account determination settings for material movements Cost component structure New COGS target account for the specified cost component (profit account or loss account 1. Assign the splitting scheme to the relevant companies. DEFINE ADDITIONAL QUANTITY FIELDS
In financial accounting, reporting mainly focuses on amounts but sometimes you also want to include quantities in your reporting. For example, in the consumer goods
industry it is common to store not just the quantity in the sales document (for example, box or pallet) but also to convert that quantity into a quantity that is common across all product lines (for example, pounds weight). This allows for the aggregation of quantities across product lines. You can then use these common quantities as drivers for management accounting (CO) allocation. In Customizing, a standard unit of measure can be defined to ensure that the quantities can be totaled and is required if you want to use totals as drivers in allocation or topdown distribution. If you specify a standard unit of measure, updates to the line item table of the record are done using this standard unit of measure. Activities:1. Assign a dimension to the additional quantity fields you are going to use. 2. If you want to allow the aggregation of quantities in order to use them as drivers in allocation or top-down distribution, specify a standard unit of measure 3. Implement the logic to fill the additional quantity fields in the BAdI FCO_COEP_QUANTITY for a specific controlling area. DEFINE ACCOUNTS FOR SPLITTING PRICE DIFFERENCES
In this Customizing activity, you can refine the settings for splitting variance categories into general ledger (GL) accounts. This allows you to do detailed analysis on prices differences in your income statement. When the costs of producing materials are valuated based on standard prices, production variances can occur on production orders where there are differences between the actual costs and the target costs. These production variances are calculated in Product Cost Controlling (CO-PC) and are split into different variance categories. Depending on the reason for the differences, the system calculates the production variance, for example, price variances, quantity variances, lot-size variances, and scrap. With the settlement of the production orders, you can post the production variances to Financial Accounting (FI) and Profitability Analysis (CO-PA). The amount settled to COPA can be settled to different variance categories so that after settlement you can display the single-variance categories in different value fields in cost-based CO-PA. The amount settled to FI is normally shown as one total amount on a G/L account for price differences. This account is defined in the account determination settings for material movements. The variance categories and therefore the reasons for the variances can normally not be reflected in this FI posting. With this customizing activity, you can refine the FI posting to show the different variance categories for each cost element on different G/L accounts allowing you to show, for example, in your income statement, the reasons for the production differences. Requirements The following prerequisites must be met: You work with standard prices for producing materials. You have executed the variance calculation in CO-PC. You have defined a settlement profile that allows the settlement of variances for your order type. For settlement to cost based CO-PA, you have defined a profitability accounting (PA) transfer structure. Activities For a refined posting of production variances on different G/L accounts in FI, you have to make the following settings: 1. Create new G/L accounts on which you want to reflect the postings of the different production variance 2. Choose the Customizing activity Define Accounts for Material Management.
In the view Configuration Accounting Display, choose transaction PRD Cost (Price) Differences your chart of accounts. Assign the G/L accounts where price differences are normally posted to for the relevant valuation classes of your materials. 1. Specify a splitting scheme for your controlling area and your chart of accounts. 2. Enter a cost element, cost element interval, or cost element group and/or a variance category and assign one of the newly created G/L accounts where you want to reflect these differences. Multiple cost elements and/or variance categories can be reflected at the same G/L account. 1. Select the Default checkbox for one of the entries. If no target account is specified for a cost element/variance category, the system automatically posts these amounts to the default G/L account. 2. Assign the splitting scheme to your company code and enter a valid from date.
