Revealing a New Type of Profitability Analysis (CO-PA): Combined CO-PA

  • by Kathrin Schmalzing, Senior Manager
  • August 2, 2017
Learn how to activate and configure combined Profitability Analysis (CO-PA).
Learning Objectives

Reading the article you will learn:

  • What combined Profitability Analysis (CO-PA) is
  • About the required technical prerequisites to be able to activate combined CO-PA
  • How to activate combined CO-PA
  • About the configuration of combined CO-PA
Key Concept
Combined Profitability Analysis (CO-PA) is a new form of CO-PA that uses value fields that can be mapped back to general ledger (G/L) accounts. 

SAP is introducing a new form of Profitability Analysis (CO-PA), combined CO-PA. Combined CO-PA reveals a lot of new functionalities. It uses value fields and has much more functionality than costing-based CO-PA. In fact I wouldn’t be surprised if it eventually replaces costing-based CO-PA.

The special feature of combined CO-PA is that it allows you to reconcile to the general ledger (G/L) accounts as it stores accounting information. Therefore, the biggest challenge of costing-based CO-PA—reconciliation with the SAP General Ledger— is solved. Combined CO-PA allows reporting across value fields and G/L accounts.

The next section includes a definition of the CO-PA and a short summary of its existing forms of CO-PA. I then explain the functionalities of combined CO-PA.

CO-PA is a module within the Controlling (CO) module that is used as a sales controlling instrument to display contribution margin calculations or to display a profit-and-loss (P&L) statement according to cost-of-sales accounting. Organizations use CO-PA to analyze their sales and margins by different characteristics. Costs and revenues are assigned to a multidimensional, user-defined profitability segment as shown in Figure 1.

Figure 1
An example of a multidimensional profitability segment

Previously there were two forms of CO-PA:

  • Account-based CO-PA: The profitability segment is built out of G/L accounts and characteristics. Account-based CO-PA gained much more importance as well as functionality with SAP S/4HANA Finance. Before, account-based CO-PA was often used to facilitate the reconciliation with the SAP General Ledger. With the integration of account-based CO-PA in the Universal Journal to build one single source of truth, SAP recommends that you activate account-based CO-PA with the implementation or upgrade to SAP S/4HANA Finance.
  • Costing-based CO-PA: The profitability segment is built out of value fields and characteristics. Before SAP S/4HANA Finance and the Universal Journal, a lot of organizations were using costing-based CO-PA because of the functionalities it offered, such as the cost of goods sold (COGS) split or the price-difference split. Costing-based CO-PA did not gain any new functionalities with SAP S/4HANA Finance. The storage of data still takes place in separate tables and the reconciliation of costing-based CO-PA with the G/L is still a tough challenge. Nevertheless, there are still reasons to implement costing-based CO-PA as it still has functionalities such as the valuation with different cost estimates that are not available in account-based CO-PA as well as the value-field approach.

Kathrin Schmalzing

Kathrin Schmalzing is a senior manager at one of the big-four accounting firms, where she specializes in FI and CO implementations, business process analysis and transformation, and value flow analysis. Kathrin has been working in CO for 15 years.

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8/2/2017 3:29:34 PM
Rajesh Phanibatla

Nice article and thanks for sharing this new feature.
1) Is account-based co-pa a prerequisite for combined co-pa?
2) can the data structures/tables of combined co-pa be exposed to OData for FIORI apps?

8/2/2017 1:21:15 PM


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