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.

See more by this author


Comments

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?

Thanks,
Rajesh
8/2/2017 1:21:15 PM
test

test

Please log in to post a comment.

To learn more about subscription access to premium content, click here.