Expand +



3 Box Model - An Intro

by Thomas Yoder

May 16, 2010

My experience implementing SAP ERP General Ledger has shown that customers and consultants can find a lot of creative ways to make SAP look like a legacy ledger system or meet some requirement that is not fully vetted.  On the other hand, I find that the application of a concept that I call the “3 Box Model” meets most customers’ needs and allows customers   to maximize the value of the SAP ledger. 

 The 3 Box Model is nothing more than a high level representation of what reporting needs are best met in what areas.   While SAP gives you the ability to add fields to the coding block of the ledger and create a template for one stop shopping, there are reasons not to do that.

In the model below, a customer has their financial statement needs met in Box 1, Spending and Variance Analysis in Box 2, and Customer and Product profitability (Standard or Gross Margin) in Box 3.


While SAP did a nice job of combining several ledgers (GLT0, 8A, COGS, SPL) with ERP general ledger, there can be performance and other issues trying to extend that footprint further (e.g. cost centers or customers).

In the 3 Box Model, Overhead Management and Product Costing are the right place to plan, report, and analyze spending and product cost variances.    This can be done at a higher level (plant or group of plants) or at individual cost center levels.      

For customer or product gross or standard margin, CO-PA is a great tool for collecting data that can be fed to a reporting tool like BI for reporting by any dimension.       This information also serves as a foundation for a deeper P&L by customer that I will discuss more in future blogs.

While the 3 Box Model seems a very basic concept in SAP financials, I have found it very useful at a couple of large customers recently in designing their financial coding block and reporting model and illustrating to them how SAP recording and reporting of financial information works.    We have incorporated the Three Box Model with detailed examples into global education for financial users.

There is a lot more to say about how to apply the 3 Box Model and even how you might expand it in the area of Customer Profitability that I will cover in future blogs.

An email has been sent to:

More from SAPinsider


Please log in to post a comment.

No comments have been submitted on this article. Be the first to comment!