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Activating Profitability Analysis for Sales Orders

by Paul Ovigele

September 25, 2011

Paul Ovigele, Ovigele Consulting

Controlling Profitability Analysis (CO-PA) allows you to analyze the profitability of your organization according to various internal and external characteristics. For example you can analyze the profitability according to profit centers (which are usually internally driven) or customer regions (which are usually externally driven). You can also combine these characteristics together so that you can analyze (say) the profit center profitability for a certain customer in a certain region. When characteristics are combined for profitability reporting, there are referred to as profitability segments. CO-PA can be updated from various source modules such as the General Ledger, Materials Management, Overhead Cost Accounting, Cost Object Controlling, Material Ledger and Project Systems; however, the main module that is used to update CO-PA is the Sales and Distribution (SD) module. There are two ways that CO-PA is updated from the SD module:

  • Billing Documents: This is the most common way of updating CO-PA: When a billing document is posted, the revenue, cost of sales, surcharges and other values are posted to CO-PA at the same time, even if the posting in the general ledger occurs at a different point (i.e. in the case of cost of sales, where the general ledger is posted during the “post goods issue” process).
  • Sales Orders: This approach is not used very widely; however it is very useful when you want to display expected profitability from sales orders which have not yet been billed. In order to set this functionality (assuming that you have already set up the functionality for posting billing documents to CO-PA) you need to go to transaction KEKF or access the following menu path:

Controlling -> Profitability Analysis -> Flows of Actual Values -> Transfer of Incoming Sales Orders -> Activate Transfer of Incoming Sales Orders 

For the relevant controlling area, enter one of the activation settings listed below:

1                 Active with date of entry

2                 Active with Deliv.Date/Billing Plan Deadline (Using KWMENG)

3                 Active with Deliv.Date/Billing Plan Deadline (Using KBMENG)

The option that you choose depends on which date you want to register as the posting date on the CO-PA document. When you made the activation, you can go back to previously posted sales orders and post them retroactively to CO-PA by using transactions KE4F and KE4T.

One important thing to note is that every CO-PA posting from a sales order is updated with record type “A”. This is the only way that you can distinguish a po sting from a billing document (which uses record type “F”) from a posting from a sales order in CO-PA reports. Since a billing document is created from a sales order (and hence contains the same characteristics and value fields), you will need to distinguish the two by specifying the record type in the “General Data Selection” of the respective report form (transaction KE34/KE35). In fact, if you already have CO-PA reports created you will need to go back to these reports and specify record type “F” for your billing document-based reports otherwise the values in these reports will be duplicated (with sales orders and billing documents).

For more information on how to optimize your SAP Financials landscape, I've put together my top tips in the book 100 Things You Should Know About Financial Accounting with SAP.

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