Track Your Profitability with CO-PA

  • by Mitresh Kundalia, Director — SAP Practice, Quality Systems & Software
  • July 1, 2005
The Profitability Analysis module can track your organization's profitability so that you can focus your limited resources on the most profitable customers.
Key Concept
The SAP Sales and Distribution (SD) module offers strong selling and order- fulfillment functionality. Part of SD, the Sales Information System (SIS), offers many customer analytical tools, but reporting and analytical features are limited. The Profitability Analysis (CO-PA) module, which is part of Controlling (CO), gives a more detailed analytical picture of customer profitability.

Note
The objective of this article is to introduce the basics of CO-PA without going into its complexities. Articles published by the author in the SAP Financials Expert newsletter offer a more detailed and technical evaluation of what CO-PA can do.

Can you imagine running a business without knowing whether you are really making a profit on your customer sales? Although, traditionally, the responsibility for profitability lies with finance departments, supply chain professionals are actively involved with the customers. Sales personnel are in touch with customers on an almost ndaily basis. Knowing the pulse of customers' behavior and their profitability allows the sales force to focus its limited resources on the most profitable customers.

I'm going to provide an overview of the Profitability Analysis (CO-PA) module, especially from sales point of view. I will elaborate on how closely SD and CO-PA are integrated. The primary focus of CO-PA is market-oriented, particularly from a sales management point of view. Many of the SD configuration settings influence significantly how and what data flows to CO-PA. Understanding the close integration is critical, especially to SD analysts, as many of these processes influence how profitability can be managed. This functionality is very basic, thus the information I'll give you is applicable to all versions of SAP.

Mitresh Kundalia

Mitresh Kundalia heads the SAP practice at Quality Systems & Software (www.QSandS.com). QS&S is a leading business and technology consulting firm that specializes in delivering superior IT solutions using SAP products. Mitresh is widely acknowledged as a leading SAP expert and has worked on various SAP assignments, including strategic planning, fresh implementations, upgrades, and post-go-live support projects. With an MBA degree in finance, Mitresh manages SAP projects with a special focus on customer-focused solutions, management reporting, profitability analysis, SAP General Ledger, and business intelligence. He is a regular contributor at SAP events and publications and technical advisor to leading journals.

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