User:Pavan kumar Arvapally/sandbox

Hi This is Pavan Kumar Arvapally....I did my ICWAI and currently working as SAP Controlling Consultant.

I wanted to share my knowledge, which may helpful for someone.

Basics of Controlling & Profitability Analysis:

Why should we go for COPA as Financials (P&L) are already addressing the profitability to the management…?

By using the regular Financials (P&L) management can able to know the overall profitability of the organization The main objective of the COPA is addressing the profitability to the management in many dimensions. Example: By using COPA, we can get the product level profitability. In addition Management can able to see the profitability in the following dimensions. Customer Distribution Channel Division Product Material Group Sales Office Sales District....................................etc

We are calling these dimensions as characteristics in COPA. The value part (Revenue, discount...etc called as Value fields in COPA). There are two types of COPA: Costing based COPA and Account based. cbab.jpg Costing Based COPA: Costing based COPA provides output based on the Value field mapping to the Cost Element Groups, Cost Component Structures, Condition Types and Variance categories..etc. Benefits of Costing Based COPA: We can see the profitability in many angles. It splits the cost of sales value into its different cost components. It is providing the Feasibility of breaking the Cost of sales part into Fixed & Variable. We can see the production variances in various categories Like (Input Variances & Output Variances) Constraints in Costing Based COPA : It is not a ready-made Report. Manual intervention is unavoidable for effective results from the COPA Report. It is not easily reconcilable with GL account balances. Account Based COPA: Account based COPA uses GL Accounts as a basis for the reporting. This is come into picture as the Accountants are not comfortable with costing based COPA. Benefits of Account Based COPA: Easily reconcilable with GL Accounts Can able to compare the results with Costing Based COPA Constraints in Account Based COPA: It is Difficult to break down the cost of sales into Fixed and Variable parts. Variance analysis is not possible.

Data flow to COPA Reports: SD Module – Billing Documents FI Module- Profitability Segment and PA Transfer Structure MM Module – Inventory posting (Change in inventory /PRD..etc) – Profitability segment Controlling Module: Cost component structure and PA Transfer Structure data.jpg Transaction to execute COPA reports: KE30: ke30.jpg Reconciliation- COPA: FI/SD Flow: Transaction: KEAT: Here we can see the SD/FI flow to COPA Reports. keat.jpg Here we can find the deviations in value flow from SD/FI to COPA. Make sure that the Delta should be zero keat final.jpg SD Transaction Flow to COPA: SD - CO.jpg