S4F29 Profit Analysis for sap beginer.pdf

S4F29
Profitability Analysis in SAP
S/4HANA
.
.
PARTICIPANT HANDBOOK
INSTRUCTOR-LED TRAINING
.
Course Version: 17
Course Duration: 5 Day(s)
Material Number: 50156557

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Contents
vii Course Overview
1 Unit 1: Profitability Management
3 Lesson: Outlining Profitability Management Options
9 Lesson: Comparing Profitability Analysis and Profit Center
Accounting
17 Exercise 1: Execute Reports for CO-PA
27 Lesson: Analyzing Profitability Management Objects
45 Unit 2: Structures
46 Lesson: Introducing the Concept of an Operating Concern
57 Exercise 2: Evaluate the Basic Configuration of an Operating
Concern
61 Lesson: Defining Data Structures
71 Exercise 3: Display Data Structures, Characteristics, and Value
Fields
77 Exercise 4: Evaluate the Attributes of an Operating Concern
83 Unit 3: Master Data
85 Lesson: Describing the Concepts of Characteristic Derivation and
Valuation
88 Lesson: Defining a Derivation Strategy
97 Exercise 5: Evaluate the Derivation Configuration
103 Exercise 6: Simulate a Line Item and Check the Characteristic
Derivation
108 Lesson: Valuation with Product Costing
119 Exercise 7: Valuation using Material Cost Estimate
130 Lesson: Evaluating with a Costing Sheet
137 Exercise 8: Configuration of a Valuation Using Costing Sheets
141 Exercise 9: Simulate a Line Item and Check the Valuation
147 Exercise 10: Analyze Configuration Using the Customizing
Monitor
© Copyright. All rights reserved. v

153 Unit 4: Actual Data
155 Lesson: Defining the Flow of Actual Data
159 Lesson: Analyzing the Integration with Sales Order Management
179 Exercise 11: Execute the Sales Order Cycle
191 Exercise 12: Analyze the Value Flow in Sales Order Cycle
196 Lesson: Processing Cost Allocations
203 Exercise 13: Create and Execute an Assessment Cycle to CO-PA
217 Exercise 14: Allocate Costs to CO-PA Using Activity Types
226 Lesson: Processing Internal Orders
231 Exercise 15: Settle Internal Orders to CO-PA
241 Lesson: Creating Direct Postings from FI
243 Exercise 16: Create a Direct Posting from FI to CO-PA
253 Exercise 17: Post a Revaluation of a Material and Analyze the
CO-PA Documents
259 Lesson: Evaluating Other Actual Postings in CO-PA
267 Exercise 18: Settle a Sales Order for Service to CO-PA
283 Exercise 19: Perform Attributed Posting for an Internal Order
295 Unit 5: Planning
297 Lesson: Evaluating the Profit Planning Process
302 Lesson: Outlining Planning Methods
313 Exercise 20: Manual Planning CO-PA Costing-Based
333 Exercise 21: Perform a Top-Down Distribution
351 Exercise 22: Outline Integrated Planning
357 Unit 6: Information Systems
358 Lesson: Executing CO-PA Reports (Financial Analytics)
367 Exercise 23: Analyze the Functionality in Reporting
376 Lesson: Creating Basic Reports and Outlining Report Components
381 Exercise 24: Create a Basic Report
393 Exercise 25: Create Report Components
402 Lesson: Creating Form Reports
409 Exercise 26: Create Form Reports
428 Lesson: Creating Line Item Reports and Account-Based Reports
431 Exercise 27: Execute Line Item Reporting
437 Exercise 28: Create a Form Report in Account-based CO-PA
451 Unit 7: Tools and Attachment
453 Lesson: Analyzing Performance Tools
461 Lesson: Analyzing the Customizing Monitor
463 Lesson: Realignment
465 Lesson: Costing-based CO-PA vs. Margin Analysis
vi © Copyright. All rights reserved.

Course Overview
TARGET AUDIENCE
This course is intended for the following audiences:
● Application Consultant
● Project Manager
● Super / Key / Power User
© Copyright. All rights reserved. vii

UNIT 1 Profitability Management
Lesson 1
Outlining Profitability Management Options 3
Lesson 2
Comparing Profitability Analysis and Profit Center Accounting 9
Exercise 1: Execute Reports for CO-PA 17
Lesson 3
Analyzing Profitability Management Objects 27
UNIT OBJECTIVES
● Describe the terminology, methods, and views of profitability management
● Define the flow of the actual values in Profitability Analysis and Profit Center Accounting
● Analyze the integration within accounting and the postings to Profitability Analysis
● Analyze the elements important to profitability management
© Copyright. All rights reserved. 1

Unit 1: Profitability Management
2 © Copyright. All rights reserved.

Unit 1
Lesson 1
Outlining Profitability Management Options
LESSON OBJECTIVES
After completing this lesson, you will be able to:
SAP S/4HANA Finance Learning Journey
Figure 1: Financial Accounting Learning Journey
Learning Journeys are visual guides, designed to help you complete the learning path for
particular SAP solutions. The easiest way to find learning journeys is to search for SAP
Learning Journeys in your browser.

Terminology in Profitability Management
Figure 2: Methods in Profitability Management
SAP S/4HANA Enterprise Management brings together the worlds of accounting and
controlling. The classical two-circuit system kept fixed and variable costs separate. It also
separated the analysis of contribution margins as well as the differentiation of variances
according to different variance categories explicit in the cost accounting. However, such key
figures can also be analyzed in financial accounting and profit center accounting in the New
General Ledger. Nevertheless, periodic accounting is used in financial accounting and profit
center accounting in the New General Ledger, while the cost of sales accounting is the cost
accounting procedure in Management Accounting. The use of the accounts’ respective cost
elements is defined by the Account Type parameter in the master record of the general ledger
account.
Animation: Methods in Profitability Management
For more information on Methods in Profitability Management, please view the
animation in the lesson Outlining Profitability Management Options, online in the
SAP Learning Hub.

Methods of Profitability Management
Figure 4: Profitability Management Methods
You can execute profitability reporting at various levels of detail. In a distribution business
environment, the detailed product cost information is not required. Therefore, a full
absorption approach may be sufficient to analyze profitability. However, in a standard
manufacturing costing environment, the breakdown into fixed and variable standards may be
important when analyzing profitability.
To reflect the periodic actual cost, the fixed and the variable standard cost plus variance may
be added to analyze contribution margins. Some companies prefer to analyze their
contribution margin based on the periodic actual cost, which can be recorded in the material
ledger.
Animation: Profitability Management Methods
For more information on Profitability Management Methods, please view the
SAP Learning Hub.
Accounting Methods
Lesson: Outlining Profitability Management Options

Figure 6: Methods of Profitability Management
Methods of Generating Profitability Statements
The accounting methods used for generating profitability statements are as follows:
● Cost-of-sales accounting:
This method aims to match the revenues for goods or services provided, or both. This
includes the value that a company gains as a result of sales against the related expenses
for the items that lose value when products are transferred out of the company. As a
result, this accounting method displays the profit and loss information in a way that is ideal
for conducting margin analyses. This method is best suited to the areas of sales,
marketing, and product management.
● Period accounting:
This method aims to summarize the activity and situational change over a period of time
for a given organizational unit. As a result, it presents the revenues and primary expenses
incurred during a given period of time, as well as the changes in stock value levels, work-in-
process, and capitalized activities. This method is best suited to the areas of production
and profit centers.
Animation: Methods of Profitability Management
For more information on Methods of Profitability Management, please view the
SAP Learning Hub.
In theory, applying either method to a particular set of business transactions under a certain
set of laws provides the same bottom-line result or profit.

Companies must use one of these methods to generate their legal financial statements. The
choice is often determined by the country-specific legal requirements.
Views of Profitability Management
Figure 8: CO-PA View vs. Profit Center View
Sales Reporting
Profitability Analysis (CO-PA) allows you to analyze the profitability of specific market
segments, such as products, customers and their summarizations, and organizational units
(company codes or business areas). The aim is to provide your sales, marketing, product
management, and business planning departments with market-oriented controlling
information to support the decision-making process.
Responsibility Reporting
You can use Profit Center Accounting (EC-PCA) in the New General Ledger to analyze internal
profit and loss for profit centers, as well as the balance sheet. Using the online document,
online reconciliation, and parallel ledgers within the New General Ledger, you can analyze
profit and profitability that satisfies the requirement of fast closing.
Animation: CO-PA View vs. Profit Center View
For more information on CO-PA View vs. Profit Center View, please view the
SAP Learning Hub.
PCA in New General Ledger
With PCA in the New General Ledger, you can perform the following tasks:
● Evaluate the different areas or units within your company.
Lesson: Outlining Profitability Management Options

● Structure the profit centers of your company according to regions (branch offices and
plants), functions (production and sales), or products (product ranges and divisions).
PCA is part of the New General Ledger in SAP S/4HANA Enterprise Management.
LESSON SUMMARY
You should now be able to:

Unit 1
Lesson 2
Comparing Profitability Analysis and Profit
Center Accounting
LESSON OVERVIEW
This lesson explains integration within accounting. It also describes the flow of actual values in
Profitability Analysis (CO-PA) and Profit Center Accounting.
Business Example
Your company has legal entities in Germany, Italy, and the United States. Sales and
profitability must be reported in a corporate currency, and in the local currencies of each legal
entity. Different types of reports are required by the following company employees:
● The company sales managers require a report summarizing sales performance figures
such as revenue, discounts, and surcharges. They also require reports on the sales and
marketing expenses, which encompass sales structure, product lines, and customers of
the company.
● The company president wants all the month-end costs, such as freight and General and
Administrative (G and A) expenses, that are accrued in Controlling (CO), but not in
Financial Accounting (FI). The intent is to estimate bottom-line profitability of the company
at any time. At month end, the company president wants the actual costs in CO
allocated realistically across the sales channels and responsibility areas.
● The company accountant requires profitability reports at the month end along the areas of
responsibility of the company, such as plants or departments. In addition, the accountant
wants to track the capital investments, such as assets, and to report on certain financial
key performance indicators.
As a result, the company requires the following reports:
● Cross-company and company-specific reports in multiple currencies
● Multi-dimensional profit and loss reports across elements of the sales force, product lines,
customers, and other organizational units
● Sales information, cost-of-sales information, contribution margins, production variances,
and period cost information reports
● Allocation of the actual period costs (Selling, General and Administrative (S, G and A))
across organizational entities in the month-end reports for capital investments and for
profit and loss
For this reason, you require the following knowledge:
● An understanding of the purpose of CO-PA and PCA
● How to execute reports related to CO-PA and PCA

LESSON OBJECTIVES
Profitability Analysis (CO-PA)
Figure 10: Typical Questions in Profitability Analysis
The best way to show the purpose of profitability management in the SAP system is to think
about some of the typical questions that can be answered using Profitability Analysis (CO-
PA).
Animation: Typical Questions in Profitability Analysis
For more information on Typical Questions in Profitability Analysis, please view
the animation in the lesson Comparing Profitability Analysis and Profit Center
Accounting, online in the SAP Learning Hub.

Profitability Analysis by Market Segments
Figure 12: Profitability Analysis by Market Segments
The business purpose of CO-PA is to provide the company with profitability-oriented
information on the performance of its market segments or sales channels. This information is
used to support corporate planning and decision-making, especially in the areas of sales and
marketing.
CO-PA allows you to define market segments and performance figures, with maximum
flexibility in market evaluation. The definition of a market is configured in the system by
selecting the characteristics that are the subjects of analyses. Performance figures may be
either profit and loss account balances or freely-defined value fields.
Market segments are combinations of information related to the selling organization and its
customers and products. Performance figures are measurements of the selling organization’s
quantities, revenues, discounts, surcharges, product costs, margins, and period costs.
The results of CO-PA can be analyzed with a multi-dimensional reporting tool. This allows for
the dynamic sorting and rearranging of data to provide multiple perspectives within a single
report.
Within SAP S/4HANA Enterprise Management, you can analyze the contribution margin in
CO-PA costing based as well as CO-PA account based.
Animation: Profitability Analysis by Market Segments
For more information on Profitability Analysis by Market Segments, please view
the animation in the lesson Comparing Profitability Analysis and Profit Center
Accounting, online in the SAP Learning Hub.
Lesson: Comparing Profitability Analysis and Profit Center Accounting

Profit Center Accounting in New GL (PCA)
Figure 14: Typical Questions in Profit Center Accounting
The best way to show the purpose of profitability management in the SAP system is to think
about some of the typical questions that can be answered using PCA.
Animation: Typical Questions in Profit Center Accounting
For more information on Typical Questions in Profit Center Accounting, please
view the animation in the lesson Comparing Profitability Analysis and Profit
Center Accounting, online in the SAP Learning Hub.

Responsibility Reporting
Figure 16: Reporting for Results-Responsible Organizational Units
Profit Center Accounting (PCA) in the New General Ledger allows you to calculate the internal
operating results for profit centers of the company. A profit center represents an
organizational sub-unit that operates independently in the market and is responsible for its
own costs and revenues.
Structure your company into profit centers by assigning the master data of each profit-
relevant object to a profit center. Profit-relevant objects include materials, cost centers,
orders, projects, sales orders, assets, cost objects, and profitability segments.
All cost-relevant and profit-relevant business transactions in the SAP system are updated in
the hierarchy structure of the company. These transactions are simultaneously processed in
the original component and organized according to cost and revenue elements. This method
of maintaining cost and revenue information transforms all the flow of goods and services
within the company into exchanges of goods and services between profit centers. This profit
center structure applies to the actual posting and the profit center plan data.
You can also regard a profit center as an investment center. In addition to the flow of goods
and services, you can transfer the selected balance-sheet line items to profit centers on a
periodic basis. Balance-sheet line items include fixed assets, payables and receivables,
material stocks, and work-in-process items. This transfer allows you to calculate key figures,
such as profit on sales, return on investment, and cash flow.

Profitability Analysis and Profit Center Accounting Reporting
Figure 17: Reporting in Comparison
The method of determining period operating results in CO-PA is based on the assumption
that the success of a company can be measured primarily based on its transactions with
other companies. The objective of CO-PA is to provide information to the sales, marketing,
product management, controlling, and corporate planning teams of the company. This
information supports these teams in their decision-making.
The sales-oriented approach in CO-PA means that until a sales transaction has been
completed, no contribution to the success of the company is realized. As a result, the
products sold are transferred to CO-PA in accordance with the cost-of-sales accounting
method and the information about the sales revenue and sales deductions is provided. This
net revenue is then compared with the cost of sales of the sold products. The costs consist of
the cost of goods manufactured or the services rendered, in addition to any known production
variances.
To complete your profitability data, assign the overhead costs to profitability segments in the
course of your period-end closing activities.
Using SAP S/4HANA Enterprise Management, the profit and loss statement for profit centers
in the New General Ledger allows you to analyze contribution margin. This supports a sales-
oriented view in the Profit Center Accounting.

Animation: Reporting in Comparison
For more information on Reporting in Comparison , please view the animation in
the lesson Comparing Profitability Analysis and Profit Center Accounting, online
in the SAP Learning Hub.

Unit 1
Exercise 1
Execute Reports for CO-PA
Simulation: Execute Reports for CO-PA
For more information on Execute Reports for CO-PA , please view the simulation
in the lesson Comparing Profitability Analysis and Profit Center Accounting
online in the SAP Learning Hub.
Business Example
Your company has legal entities in Germany, Italy, and the United States. It can report sales
and profitability across the company in a group currency and in each of the legal entity’s local
currencies.
The sales managers require a report summarizing the sales performance figures, such as
revenue, discounts, and surcharges. These sales figures encompass the company’s sales
structure, product lines, and customers. The sales managers also need to view sales and
marketing costs along these lines.
Describe the options available for the organizational structures for CO-PA.
Execute a report to analyze the sales orders in CO-PA using SAP Fiori.
Run the S4F20LI profitability report (Cross Margin Report based on line items) in the costing-
based CO-PA. Select the reporting date for the current year. Use the SAP Fiori App Run
Profitability Report in the tile group Controlling Reporting.
1. Obtain an overview of the sales order situation with regard to the division 00 using the
following selection data:
Field Value
Period from 001/YYYY (where YYYY is the Current
Year)
Period to 012/YYYY (where YYYY is the Current
Year)
Plan/Actual Indicator 0
Version Blank (no entry)
Record Type F
Output Type Graphical report output
Choose the Run Profitability Report - Profitability Analysis app.

Note:
Set the Operating Concern field to A000, and select the Costing-based radio
button.
2. Execute the SAP Fiori App Analyze Market Segments - Actuals. You find this App in the Tile
Group Controlling Reporting. This report select the data from the table ACDOCA. It doesn’t
matter whether COPA - costing based or COPA - account based has been set. In the
Market Segments - Actuals report, use drag & drop to deselect all characteristics. Verify,
that the measures belong to:
● Actual Amount in Transaction Currency
● Actual Amount in Company Code Currency
● Actual Amount in Global Currency
(Group Currency).
3. Select the characteristic G/L Account to select actual data. Set a filter to select only the
revenue account which are 40000000 - 41999999. Select the characteristic Sales
Organization to the rows. In the Settings, select the function Swap Axes to compare the
revenue between sales organization 1010 (DE) and 1710 USA.

Unit 1
Solution 1
Execute Reports for CO-PA
Simulation: Execute Reports for CO-PA
For more information on Execute Reports for CO-PA , please view the simulation
in the lesson Comparing Profitability Analysis and Profit Center Accounting
Business Example
Your company has legal entities in Germany, Italy, and the United States. It can report sales
and profitability across the company in a group currency and in each of the legal entity’s local
currencies.
The sales managers require a report summarizing the sales performance figures, such as
revenue, discounts, and surcharges. These sales figures encompass the company’s sales
structure, product lines, and customers. The sales managers also need to view sales and
marketing costs along these lines.
Describe the options available for the organizational structures for CO-PA.
Execute a report to analyze the sales orders in CO-PA using SAP Fiori.
Run the S4F20LI profitability report (Cross Margin Report based on line items) in the costing-
based CO-PA. Select the reporting date for the current year. Use the SAP Fiori App Run
Profitability Report in the tile group Controlling Reporting.
1. Obtain an overview of the sales order situation with regard to the division 00 using the
following selection data:
Field Value
Period from 001/YYYY (where YYYY is the Current
Year)
Period to 012/YYYY (where YYYY is the Current
Year)
Plan/Actual Indicator 0
Version Blank (no entry)
Record Type F
Output Type Graphical report output
Choose the Run Profitability Report - Profitability Analysis app.

Note:
Set the Operating Concern field to A000, and select the Costing-based radio
button.
a) On the SAP Fiori launchpad, select the tile group Controlling Reporting.
b) On the SAP Fiori launchpad, choose the Run Profitability Report - Profitability Analysis
app.
c) In the Set Operating Concern dialog box, in the Operating concern field, enter A000.
d) Select the Costing-based radio button.
e) Choose the Continue button.
f) On Run Profitability Report: Initial screen, select the report S4F20LI and choose
Execute.
g) On the Selection: Line Item Based incl. Posting Date screen, enter the data from the
table given in the exercise.
h) Choose the Execute button.
The report contains the data on Billed sales orders.
i) In the Navigation area, double-click on the characteristic Division.
The report is now shown by the selected Division.
j) Again, double-click on the first division in the Drill-down area. You now see the data in
the drill down are by Sales Organization. Double-click in the drill-down area on the sales
organization value 1010.
k) In the navigation area, double-click the characteristic Sales Order. Now, the sales
orders are listed belonging to the sales organization 1010 (DE).
l) Go back to the SAP Fiori launchpad using the Home button.
2. Execute the SAP Fiori App Analyze Market Segments - Actuals. You find this App in the Tile
Group Controlling Reporting. This report select the data from the table ACDOCA. It doesn’t
matter whether COPA - costing based or COPA - account based has been set. In the
Market Segments - Actuals report, use drag & drop to deselect all characteristics. Verify,
that the measures belong to:
● Actual Amount in Transaction Currency
● Actual Amount in Company Code Currency
● Actual Amount in Global Currency
(Group Currency).
a) In the SAP Fiori Launchpad, select the tile group Controlling Reporting.
b) Select the App Analyze Market Segments - Actuals .
c) Drag all characteristics to the left to deselect them.
d) Check the measures for the currency type.

3. Select the characteristic G/L Account to select actual data. Set a filter to select only the
revenue account which are 40000000 - 41999999. Select the characteristic Sales
Organization to the rows. In the Settings, select the function Swap Axes to compare the
revenue between sales organization 1010 (DE) and 1710 USA.
a) In the Market Segments - Actuals app, select the icon Filters.
b) In the pop-up window Filters scroll to G/L Account.
c) Select Entry help and Define conditions.
d) Select Include with Key between and enter from 41000000 to 41999999.
e) Choose OK and Go.
f) Select Settings and select Swap Axes.
g) Return to Home.

Integration Within Accounting
Figure 20: The Concept of Integration within Accounting
Management Accounting contains all the required accounting functions needed for effective
controlling. If a company divides accounting into internal and external viewpoints,
Management Accounting represents internal accounting because it provides information to
managers who are charged with directing and controlling its operations.
Management Accounting includes cost and revenue accounting. Together with the PCA in the
New General Ledger, it offers all the controlling opportunities without being limited to the
company code used in FI. This is because a profit center can be created from each company
code, which are assigned to the controlling area of the Profit Center Accounting.
Management Accounting is made up of multiple application components that are effective at
processing different approaches to managerial accounting.
Animation: The Concept of Integration within Accounting
For more information on The Concept of Integration within Accounting, please
view the animation in the lesson Comparing Profitability Analysis and Profit
Center Accounting, online in the SAP Learning Hub.
Management Accounting answers the following typical questions with the appropriate
component:
● What costs are incurred within our company? (CO-OM)
● How much does producing a product or providing a service cost our company? (CO-PC)
● In which market segments are we successful? (CO-PA)

● How profitable are our individual organizational areas (profit centers)? (EC-PCA)
Flow of Actual Values to Profitability Analysis
Figure 22: Flow of Actual Values to Profitability Analysis
The figure, Flow of Actual Values to Profitability Analysis, displays the value flows and their
corresponding postings in account-based CO-PA.
Value Flows and Postings in Account-Based CO-PA
Table 1: Value Flow
The value flow from various processes to CO-PA occurs as follows:
Figure
Reference
Process Posting CO-PA
1a) Billing Revenues
1b) Goods issue Cost of Goods Sold using “cost splitting
profile” defined in FI
2) Production variances from produc-
tion orders
Accumulated as a price difference and
variance categories when using “Price
Differences Splitting Profile” defined in FI
3) Costs from cost centers Assessments, activity allocation
3a) Surplus or shortage on cost centers
according to functional areas
Cost center overheads
4) Sales costs through segment levels Direct account assignment in CO-PA
5) Revenue and cost from cost objects Settlement to CO-PA

The actual postings are the most important data source in account-based CO-PA. Both sales
orders and billing documents can be transferred from Sales and Distribution (SD). In addition,
an interface program transfers external data to the SAP system. You can also transfer the
costs from cost centers, orders, and projects, as well as the costs and revenues from direct
posting, General Ledger (G/L) account posting in FI, and the orders received in operations.
You can settle the costs from Controlling (CO) to profitability segments.
An Overview of Value Flows in Costing-Based Profitability Analysis
Figure 23: An Overview of Value Flows in Costing-Based Profitability Analysis
PCA is a statistical accounting component that presents the transaction data posted in other
components from a profit-center point of view. The postings in PCA are statistical postings
because the allocation of costs and revenues from one profit center is only possible to
another profit center, but not to another controlling object.
Integration of the SAP system makes it possible to automatically post profit-relevant data to
PCA when a transaction is posted. The system either transfers the relevant items from the
original postings or creates additional postings.
In costing-based CO-PA, you can perform the following tasks:
● Valuate the incoming sales orders or billing documents to automatically determine the
anticipated sales deductions or costs.
● Re-evaluate your data periodically to adjust the initial, real-time valuation, or add the
actual costs of goods manufactured.
When the system transfers the standard costs of sales, the fixed and the variable cost
elements are transferred to different value fields. This transfer enables the necessary
contribution margin accounting for profitability and sales accounting. To settle between the
costing-based CO-PA and FI profit and loss, all other periodical costs can be transferred to
the costing-based CO-PA as well as the account-based CO-PA. With the settlement of
periodic cost to CO-PA, the reconciliation of the Total Cost Procedure with the cost of Sales
Procedure is supported.

Animation: An Overview of Value Flows in Costing-Based Profitability Analysis
For more information on An Overview of Value Flows in Costing-Based
Profitability Analysis, please view the animation in the lesson Comparing
Profitability Analysis and Profit Center Accounting, online in the SAP Learning
Hub.

LESSON SUMMARY

Unit 1
Lesson 3
Analyzing Profitability Management Objects
LESSON OVERVIEW
This lesson describes the various objects and aspects important to profitability management.
Business Example
Your company has legal entities in Germany, Italy, and the United States. It reports sales and
profitability across the company in a corporate currency and also within each of the legal
entities in their local currencies. Different types of reports are required by the following
company employees:
● The company sales managers require a report that summarizes sales performance
figures, such as revenue, discounts, and surcharges. These sales figures encompass the
sales structure, product lines, and customers of the company. They also require sales and
marketing expenses along these lines.
● The company president wants all the month-end costs accrued in Controlling (CO) but not
in Financial Accounting (FI). These costs include freight and General and Administrative (G
and A) expenses. The goal is to enable estimation of bottom-line profitability at any time.
At month end, the company president wants the actual costs in CO allocated realistically
across the sales channels and responsibility areas.
● The company accountant requires profitability reports at the month end, along the areas
of responsibility of the company, such as plants or departments. In addition, the
accountant wants to track capital investments, such as assets, and report on certain key
financial performance indicators.
As a result, the company requires the following reports:
● Cross-company and company-specific reporting in multiple currencies
● Multidimensional profit-and-loss reporting across elements of the sales force, product
lines, customers, and other organizational units
● Sales information, cost-of-sales information, contribution margins, production variances,
and period cost information reports
● Allocation of the actual period costs (Selling, General and Administrative (S, G and A))
across organizational entities in the month-end reports for capital investments and profit
and loss
For this reason, you require the following knowledge:
● An understanding of the master data within profitability management
● An understanding of the parallel currencies of postings and different views in profitability
management
● An understanding of the different types of profitability management

LESSON OBJECTIVES
Master Data Within Profitability Management
Figure 25: Objects in Profitability Management
Profitability segments are the market segments or strategic business units that you can
analyze in Profitability Analysis (CO-PA). These segments represent combinations of product,
customer, and sales structure information. They contain information on company codes,
business units, and profit centers.
The primary purpose of CO-PA is to enable reporting on margins and other profitability
figures along marketing lines as defined by profitability segments. CO-PA is designed to
produce profit and loss statements under the cost-of-sales accounting format and
philosophy.
Profit centers are the areas of responsibility within a company. Profit centers are responsible
for revenues and expenses, and include the positioning of investment centers as well as
certain assets and capital. All profit centers are arranged into a standard hierarchy that
represents the entire company.
The primary purpose of classic Profit Center Accounting (EC-PCA) is to enable reporting on
performance information along organizational lines, as defined by the profit center hierarchy.
EC-PCA in the New General Ledger is designed to produce profit and loss statements under
the period-accounting format and philosophy. Note that the cost-of-sales accounting in EC-
PCA can also be undertaken with the help of functional areas.
Animation: Objects in Profitability Management
For more information on Objects in Profitability Management, please view the
animation in the lesson Analyzing Profitability Management Objects, online in the
SAP Learning Hub.

Organizational Units
Figure 27: Organizational Units
The operating concern is the key organizational unit in CO-PA. It defines the extent of the
combination of marketing and sales information reported in CO-PA. When organizational
structures are defined, several controlling areas are assigned to one operating concern. For
the sake of simplicity and convenience, if all controlling areas and company codes share the
same fiscal calendar, then companies have a single operating concern.
The controlling area is an organizational unit that defines the independent cost accounting
operations of the company, such as cost center accounting, profit center accounting, and
order accounting. When organizational structures are defined, company codes are assigned
to controlling areas.
Note that you can assign several company codes to a controlling area to enable cross-
company cost allocations. This does not take into account value added tax.
The company code is an independent accounting unit within a client. At the company code
level, the legal requirements of a balance sheet or a profit and loss statement are fulfilled.
Plants are assigned to company codes when you define organizational structures.
The plant represents a production center. It is the primary organizational unit in operations
and manufacturing.
Animation: Organizational Units
For more information on Organizational Units , please view the animation in the
lesson Analyzing Profitability Management Objects, online in the SAP Learning
Hub.
Lesson: Analyzing Profitability Management Objects

Parallel Currencies of Postings in Profitability Management
Figure 29: Parallel Currencies
In costing-based CO-PA, all amounts are stored in an operating concern currency. This is
specified in the operating concern attributes.
Configure the attributes to store values in the local currency as well. This option has the effect
of doubling the stored transaction data.
Account-based CO-PA stores all transactions in the following currencies:
● Transaction currency
● Local currency
● Controlling area currency
EC-PCA stores transactions in the transaction currency, local currency, and a special EC-PCA
currency. It is recommended to use EC-PCA in the New General Ledger. Financial Accounting
data are stored in transaction currency, company code currency, and, if required, parallel
company currencies like an index-based currency.
Animation: Parallel Currencies
For more information on Parallel Currencies , please view the animation in the
lesson Analyzing Profitability Management Objects, online in the SAP Learning
Hub.

Customizing Monitor
Figure 31: Customizing Monitor – Organizational Structures
Get an overview of the organizational assignment for your operating concern using the
Customizing Monitor.
The Customizing Monitor shows an overview of the organizational structure and its
assignments, which are as follows:
● The controlling areas and the company codes that are assigned to plants and sales
organizations
● The basic settings for the operating concern
By using the Customizing Monitor, you can analyze the organizational assignments of the
operating concern.
Animation: Customizing Monitor – Organizational Structures
For more information on Customizing Monitor – Organizational Structures,
please view the animation in the lesson Analyzing Profitability Management
Objects, online in the SAP Learning Hub.
Note:
If parallel evaluation in profit center valuation is active, to post transactions in
parallel in profit center valuation, set the material ledger as active.

Different Views of a Company
Figure 33: Different Views of a Company
Decision-makers in a company need different types of information.
For the individual company codes, profitability data must be shown from the perspective of
each company code and must match the income statement.
For the group head office, the most important view is the group as a whole. As a way to
eliminate intercompany profits, the basis for decision-making requires that the group be
represented as a business unit.
For profit centers, profit center managers require equivalent information. In such cases, sales
between profit centers within a company are also part of the profit analysis.
Animation: Different Views of a Company
For more information on Different Views of a Company, please view the
animation in the lesson Analyzing Profitability Management Objects, online in the
SAP Learning Hub.

Different Views in CO-PA
Figure 35: Different Views in COPA
CO-PA must provide the appropriate information to your company to form the correct basis
for decision-making.
The individuals responsible for a group must obtain the group result through the company
results of the legally-independent units. These company results should also allow profit center
managers to arrive at a profit center result. This means that they should be able to perform
CO-PA using transfer prices.
Animation: Different Views in COPA
For more information on Different Views in COPA, please view the animation in
the lesson Analyzing Profitability Management Objects, online in the SAP
Learning Hub.

Parallel Evaluation in CO-PA
Figure 37: Parallel Evaluation - Example
Sales revenues can be transferred between profit centers in CO-PA as internal revenues.
When you customize CO-PA, decide if you want to post additionally with profit center
valuation in CO-PA.
You can also transfer the result of the actual costing material ledger to CO-PA. To do so, map
the cost component structure of the material ledger elements to the value fields that you have
created for that view in your operating concern.
Animation: Parallel Evaluation - Example
For more information on Parallel Evaluation - Example, please view the animation
in the lesson Analyzing Profitability Management Objects, online in the SAP
Learning Hub.

Different Types of Profitability Management
Figure 39: Summary Profitability Management I
The figure, Summary: Profitability Management Types, shows the different aspects of
profitability management from the management point of view.
Profitability Management for Operations
Figure 40: Summary Profitability Management II
The figure, Summary: Profitability Management for Operations, shows the different aspects
of profitability management from the operations point of view.

Since SAP S/4HANA release 1809, predictive accounting is available in Financial Accounting.
The usage of a prediction ledger and the impact to CO-PA account-based will be discussed in
unit 4.
Margin Analysis
Finance is always focusing on running the business, executing operational tasks. But
nowadays this is not what is expected from the business anymore. Business expects finance
to deliver the necessary insights for decision making. In order to free up time, operational
tasks cannot just be abandoned of course. They need to be executed. But the purpose is to
automate (through ML, the use of networks, decide which key tasks to perform by starting by
looking at relevant KPI’s and go from there,...). It’s not about reducing the headcounts but
getting rid of the boring jobs while shaping them into new innovative and valuable roles.
Figure 41: MA SAP vision
In organizations which have moved (partially) towards the automation of operational tasks
and increased focus on insights, we usually see insights that focus on the past. In other words,
we report on actuals. While this is interesting, it doesn't shed light on the future. We cannot
change the past, so forward-looking insights may be more useful.
In order to focus more on forward-looking insights, and make them actionable, classic
reporting activities will become more efficient (like operational processes). This is where
advanced analytics comes in (including predictive analytic capabilities, smart alerting,
increased flexibility in reporting using embedded reporting capabilities within SAP S/4HANA,
and so on).
SAP S/4HANA Margin Analysis as Strategic Offering for Profitability Analysis
In SAP S/4HANA, development efforts for profitability analysis only target Margin Analysis.
There are no efforts to enhance costing-based CO-PA. Margin Analysis is perfectly integrated
into the overall concept of the Universal Journal and fully conforms with our Financial
Accounting development strategy. Margin Analysis has been extended broadly over the past
releases and we continue to conduct new developments in this area only, resulting in a
superior solution designed to handle the needs of modern businesses. We see new customer
installations choosing Margin Analysis only, and an increasing number of replacements of
costing-based CO-PA with Margin Analysis.

Benefits of SAP S/4HANA Margin Analysis:
● Holistic and consistent financial information without reconciliation: The Universal Journal
combines financial and managerial accounting and directly records all dimensions
including custom fields. Margin Analysis provides consistent financial information without
any reconciliation needs along with a financial audit trail. All innovations developed for the
Universal Journal are immediately available within Margin Analysis. A consistent approach
ensures common usage of ledgers, currencies, valuations, predictions, and simulations, as
well as their availability in planning and reporting.
● Real-time visibility into margins: All revenue and cost of goods sold postings are
automatically assigned to the relevant dimensions at the time of posting. Also in further
scenarios, such as project sales, the new approach assigns profitability dimensions
immediately. Together with real-time processing of former period-end procedures, this
approach provides real-time visibility into margins during the period.
● Embedded analytics: Through SAP S/4HANA embedded analytics dedicated operational
reports for multi-dimensional Margin Analysis but also regular G/L reports, such as P&L by
market segments, make use of all profitability dimensions and allow for a drill-down to line
item details without data manipulation or data transfer to analytical applications.
Figure 42: MA Benefit
Animation: MA Benefit
For more information on MA Benefit, please view the animation in the lesson
Analyzing Profitability Management Objects, online in the SAP Learning Hub.
The logical start point is the financial steering model which is the central part of the SAP S/
4HANA solution: the so-called Universal Journal. This contains all individual transactions
which take place, and for each transaction keeps track of all relevant business dimensions
including not only financial dimensions like profit center and cost center, but customer,
product or service, industry, region and so on.
Based on this, any type of aggregation can easily be done to deliver the correct profitability
insights. Until the 1709 release, there were specific situations for which full-blown profitability
analysis could not be done straight on this universal journal.

Specific use cases were causing the need to move into the direction of a stand-alone
profitability analysis setup, based on the costing-based COPA architecture which we know
from the ECC world. Surely, all information could already be delivered in this way, but with two
major drawbacks:
● Again, we are faced with the need to reconcile the margin reporting with the overall
financial information.
● Reporting could not be completed in real-time.
Margin Analysis Reporting
Margin analysis is fully integrated in the Universal Journal. Therefore, it’s reconciled by
design. The internal and external views in accounting are harmonized and allow
comprehensive reporting with DRILLDOWN functionality in P&L statements and balance
sheets. The objective for the future is to completely separate margin analysis and costing-
based profitability analysis and to deliver a margin analysis without operating concern based
on the field catalog of the Universal Journal.
The following figure gives an example of the standard report in Margin Analysis. It is possible
to report in all ledger following a contribution margin scheme.
Figure 44: MA Report Example
Product Profitability
Analyze contribution margins for individual products.
With this app, you can analyze contribution margins for individual products along related
product information and available profitability characteristics. It allows you to drill down on
fixed and variable costs based on your standard cost component split. Furthermore, you can
report the billed quantity as well as the margin per unit.
Line items will only be included in the calculation if the journal entry is assigned to a
profitability segment and the Product Sold field is filled. Values will be displayed in the global
currency. Alternatively, you also have the option of displaying values in the company code
currency for the selected measures.

Figure 45: Margin Analysis Product Profitability
Figure 46: MA Overview Availability
Currently, Account-based COPA is available On-Premise. Margin Analysis On-Premise is
under construction.
The following figure gives an overview of the planned next steps in the development of margin
analysis. The goal is to enhance Margin Analysis with all functions, that are available in CO-PA
costing based and more. The time frame for Short-term is about 1 year, for mid-term 2 years
and for long-term about 2-3 years beginning in year 2021.

Figure 47: Margin Analysis Next Steps
Animation: Margin Analysis Next Steps
For more information on Margin Analysis Next Steps, please view the animation
in the lesson Analyzing Profitability Management Objects, online in the SAP
Learning Hub.
Figure 49: Margin Analysis - Additional Info
At the time the course material was created, the new features of Margin Analysis for SAP S /
4HANA 2020 have not yet been released. we therefore recommend that you take a look at
help.sap.com. Keyword: What's new.

LESSON SUMMARY

Unit 1
Learning Assessment
1. Which of the following methods is an accounting method?
Choose the correct answer.
X A Cost-of-sales accounting
X B Marginal accounting
X C Inventory accounting
X D Stock list accounting
2. Profit Center Accounting (PCA) is a component of logistics.
Determine whether this statement is true or false.
X True
X False
3. Which of the following values can be analyzed in Profit Center Accounting (EC-PCA) but
not in Profitability Analysis (CO-PA)?
X A Fixed Cost
X B Gross Sales
X C Cash Flow
X D Net Sales
4. A profit center is an organizational subunit that represents internal responsibility.
Determine whether this statement is true or false.
X True
X False

5. Which of the following master data is not a part of Overhead Cost Controlling (CO-OM)?
X A Business processes
X B House Bank master data
X C Cost centers
X D Internal orders
6. Which one of these items can only be analyzed in costing-based Profitability Analysis (CO-
PA)?
X A Revenues
X B Cost of sales
X C Miscellaneous accrued costs
X D Sales deductions
7. Account-based Profitability Analysis (CO-PA) stores all transactions in the following
currencies: transaction currency, local currency, and ____________________.
X A Profit Center Accounting (EC-PCA) Currency
X B Group Currency
X C Base Currency
X D Operating Concern Currency
8. A Controlling area is ____________________________.
X A an organizational unit used to report internally
X B the key organizational unit in Profitability Analysis (CO-PA)
X C an independent accounting unit within a client
X D a production facility in operations and manufacturing
Unit 1: Learning Assessment

UNIT 2 Structures
Lesson 1
Introducing the Concept of an Operating Concern 46
Exercise 2: Evaluate the Basic Configuration of an Operating Concern 57
Lesson 2
Defining Data Structures 61
Exercise 3: Display Data Structures, Characteristics, and Value Fields 71
Exercise 4: Evaluate the Attributes of an Operating Concern 77
UNIT OBJECTIVES
● Define organizational structures
● Define data structures

Unit 2
Lesson 1
Introducing the Concept of an Operating
Concern
LESSON OVERVIEW
This lesson describes the various organizational units that are the basis of management
accounting. In addition, the lesson explains the concepts, characteristics, and value fields of
an operating concern.
Business Example
The management of your company wants to implement a profitability accounting application
in your SAP system. As a member of the project team, you must recommend whether to
implement Profitability Analysis (CO-PA) or Profit Center Accounting (PCA). Then you will be
responsible for implementing the chosen applications.
Your company requires the following information:
● Cross-company and company-specific reporting of contribution margins in multiple
currencies
● Multidimensional analysis of sales information, cost-of-sales information, production
variances, and period cost information for the various market segments
● Estimated costs for the actual costs posted only at month-end
● Actual period costs (Selling, General and Administrative; or S, G and A) for the various
organizational entities at month-end
● Analytics by category of value fields and by income statement account
For this purpose, you need to configure the operating concern that represents a sales and
marketing reporting unit for a corporation. You also need to understand the concept of
characteristics and value fields of an operating concern. For this reason, you require the
following knowledge:
● An understanding of the various organizational units that affect CO-PA
● An understanding of the configuration of an operating concern and its attributes
LESSON OBJECTIVES

Organizational Units That Affect Profitability Analysis
Figure 50: Organizational Units to in Relation to Operating concern
The operating concern is the key organizational unit in Profitability Analysis (CO-PA). The
operating concern defines the extent of the marketing and sales information that can be
reported in combination by CO-PA. When organizational structures are defined, one or more
controlling areas are assigned to an operating concern. For the sake of simplicity and
convenience, if all controlling areas and company codes share the same fiscal calendar,
companies have a single operating concern.
The controlling area is an organizational unit that defines the independent cost accounting
operations of the company, such as cost center accounting, profit center accounting, and
order accounting. When organizational structures are defined, company codes are assigned
to controlling areas.
The company code is an independent accounting unit within a client. At the company code
level, the legal requirements of a balance sheet or a profit-and-loss statement are fulfilled.
When you define organizational structures, plants are assigned to company codes.
The plant represents a production center. It is the primary organizational unit in operations
and manufacturing.
Animation: Organizational Units to in Relation to Operating concern
For more information on Organizational Units to in Relation to Operating
concern , please view the animation in the lesson Introducing the Concept of an
Operating Concern, online in the SAP Learning Hub.
Basic Concepts of CO-PA
Lesson: Introducing the Concept of an Operating Concern

Figure 52: Basic Concepts of CO-PA
The basic concepts of CO-PA include the following:
● Characteristics:
Characteristics are those entities that you want to report on. These include divisions,
regions, products, and customers.
● Characteristic Values:
Characteristic values are the values that the characteristics in your report should display.
For example, region is a characteristic with south as its value, and company code is a
characteristic with 1000 as its value.
● Profitability Segments:
Profitability segments are the technical definitions of combinations of several
characteristics and their values. For example, a combination of North region, T-F100
product, and Sales Rep. Miller.
● Value Fields:
Value fields are the amount and quantity fields with which performance can be measured
and analyzed. Examples include gross sales, surcharges, discounts, and cost of sales.
Animation: Basic Concepts of CO-PA
For more information on Basic Concepts of CO-PA, please view the animation in
the lesson Introducing the Concept of an Operating Concern, online in the SAP
Learning Hub.
Unit 2: Structures

Categories of Characteristics
Figure 54: Categories of Characteristics
Characteristics are the analytic dimensions of CO-PA. Characteristics define items or objects
that the user can evaluate. Several characteristics, such as customer and product, are
predefined automatically for every operating concern. Also, the organizational
characteristics, such as company code, controlling area, and plant, are automatically
predefined. These characteristics are known as fixed characteristics. They play a central role
for integration in the system and the master records. For technical reasons, the
characteristics are needed to enable the posting of value type, version, period, and fiscal year.
These fixed characteristics are automatically predefined in an operating concern and cannot
be removed.
In addition to the fixed characteristics, up to 50 non-fixed characteristics can be added to an
operating concern.
Before you can use the non-fixed characteristics to define an operating concern, they must be
added to the field catalog. You can access the characteristics in the field catalog in any client.
Animation: Categories of Characteristics
For more information on Categories of Characteristics, please view the
animation in the lesson Introducing the Concept of an Operating Concern, online
in the SAP Learning Hub.
The field catalog contains some suggested characteristics for use in a new operating concern
definition.
The following are ways to add other characteristics to the field catalog:
● Choose an existing field from certain SAP tables, with a maximum length of five
characters.
● Create a characteristic independently. Make sure that the characteristic begins with WW
and contains four to five characters in total.

Behind every characteristic, there is a check table with valid characteristic values for CO-PA.
In this way, the data that flows into CO-PA is checked. When you manually create a new
characteristic in the field catalog, you can decide if the system should generate a check table
for this characteristic.
Note:
Using a characteristic without a check table is an exception because any value
could be entered for that characteristic without validation.
Categories of Characteristics: Examples
Table 2: Description of Characteristics
The categories of characteristics are described as follows:
Characteristic Description Value Definition Example
Referenced to
SAP tables
Reference to a table
field, such as to materi-
al group in material
master (MM)
In other applications,
such as MM
Material group
(MATKL)
Custom created CO-PA specific fields
without reference to
existing tables
In CO-PA Strategic business unit
(WWSBU)
Predefined Sample characteristics
Example characteris-
tics
In other applications or
in CO-PA
Customer group
Fixed Mandatory characteris-
tics required by the
system
In other applications,
such as organizational
structures
Company code
You can divide the characteristics into the following categories according to how and when
they are defined:
● Referenced to SAP tables:
You can use characteristics that already exist in other applications when you define your
operating concerns. For example, you can copy fields from tables for customer master
records, material master records, and sales documents. You can also copy partner roles
defined in the structure PAPARTNER in the Sales and Distribution (SD) application as
characteristics in CO-PA.
● Custom-created characteristics:
You can create characteristics that are only required in CO-PA, and define your own
derivation strategy to derive values for these characteristics.
● Predefined characteristics:
In addition to fixed characteristics, a number of other predefined characteristics, such as
customer group, customer district, and country characteristics, are available in the field
catalog. You can add these characteristics to your operating concern.
Unit 2: Structures

● Fixed characteristics:
A number of fundamental characteristics, such as product number, company code, billing
type, business area, and sales order characteristics, are automatically predefined in every
operating concern.
Categories of Value Fields
Figure 56: Categories of Value Fields
In costing-based CO-PA, value fields store the base quantities and amounts for reporting.
Value fields can be highly summarized, for example, representing a summary of cost element
balances. Alternatively, they can be highly detailed, for example, representing just one part of
a single cost element balance.
The sales-related key figures, such as revenue types, discounts, and surcharges, are
presented in a detailed way. In comparison, the items based on periodic costs, such as period
cost types, are aggregated.
Unlike characteristics, there are no fixed value fields for a new operating concern.
Value fields can be maintained in the field catalog as follows:
● All the value fields must exist in the field catalog before they can be used to define a new
operating concern. The field catalog is valid in all clients. The field catalog contains some
suggested value fields, which you can use in a new operating concern. You can define value
fields independently, which should begin with VV and should be four to five characters in
total.
● It is not necessary to create the value fields, such as net sales and contribution margin.
These items are calculated from the base values stored in the value fields when the report
is executed. However, when using an ad-hoc report, those key figures can be defined using
a Key Figure Scheme in costing-based CO-PA. If you do not create value fields for
calculated items, the data storage requirements are minimized.
● In account-based CO-PA, all values are updated to cost and revenue elements. Each
amount is stored in up to three different currencies under fixed basic key figures, which are
accessed in reporting.

Value Fields with New Time Aggregation Rules
Figure 57: Value Fields with New Time Aggregation Rules
You can use value fields with the aggregation rules sum (SUM), average (AVG), and last (LAS)
in CO-PA drill-down reports.
Value fields are defined when you create them in the field catalog, and then pulled into the
data structures when you create your operating concern.
Animation: Value Fields with New Time Aggregation Rules
For more information on Value Fields with New Time Aggregation Rules, please
view the animation in the lesson Introducing the Concept of an Operating
Concern, online in the SAP Learning Hub.
Unit 2: Structures

Operating Concern Attributes
Figure 59: Steps in Defining an Operating Concern
Define the structure of your operating concern when you create it. To do this, select the
characteristics that you want to use in the data structures of the operating concern.
In costing-based CO-PA, select the value fields that you want to use.
The structure of an operating concern is valid in all clients.
Animation: Steps for Defining an Operating Concern
For more information on Steps for Defining an Operating Concern, please view
the animation in the lesson Introducing the Concept of an Operating Concern,

Defining Operating Concern and Attributes
Figure 61: Operating Concern - Attributes
Attributes are client-specific parameters of an operating concern. They have different effects,
depending on the type of CO-PA you are working in.
The attributes of an operating concern are as follows:
● Currency types for costing-based CO-PA
- Operating concern currency:
In costing-based CO-PA, the actual data is posted in the operating concern currency.
You can change the operating concern currency if no data has been posted in the
operating concern.
- Company code currency:
You have the option of storing all data in the currency of the corresponding company
code. This option is relevant if your company operates internationally and is concerned
with daily fluctuations in exchange rates. This attribute allows you to avoid differences
due to fluctuations in exchange rates, and helps you to reconcile your CO-PA data
directly with Financial Management.
- Profit center valuation:
In addition to storing data in the operating concern currency and company code
currency using the legal company code and valuation view, you can also store data in
the currencies that are valuated from the viewpoint of transfer prices between profit
centers.
● Fiscal year variant:
Unit 2: Structures

The fiscal year variant determines the number of posting periods for each fiscal year. The
fiscal year variant must be identical between the assigned company codes, controlling
areas, and the concerning area.

Unit 2: Structures

Unit 2
Exercise 2
Evaluate the Basic Configuration of an
Operating Concern
Simulation: Evaluate the Basic Configuration of an Operating Concern
For more information on Evaluate the Basic Configuration of an Operating
Concern, please view the simulation in the lesson Introducing the Concept of an
Operating Concern online in the SAP Learning Hub.
Business Example
Your company has legal entities in different countries. The controlling department must
report sales and profitability both across the company in a group currency and in the local
currency of each legal entity. The sales managers require the following data:
● Summarized sales performance figures, such as revenue, discounts, and surcharges, both
along and across the lines of the sales structure, product lines, and customers
● Sales and marketing costs along these lines
Evaluate the options available for the organizational structures for CO-PA.
Evaluate the configuration of an operating concern.
1. Check the basic settings and organizational assignments for the A000 operating concern
using the App: Customizing Monitor (KECM) and answer the following questions:
● Is the controlling area A000 assigned to the A000 operating concern?
● Does the A000 operating concern have the same fiscal year variants as the controlling
area A000?
● Does the assigned company code 1010 also have the same fiscal year variant?
● What chart of accounts do the controlling area and the company code have?
● Is the sales organization 1010 assigned to the company code 1010?
You can find the App Customizing Monitor (KECM) in the tile group COPA Basic
Configuration.

Unit 2
Solution 2
Evaluate the Basic Configuration of an
Operating Concern
Simulation: Evaluate the Basic Configuration of an Operating Concern
For more information on Evaluate the Basic Configuration of an Operating
Concern, please view the simulation in the lesson Introducing the Concept of an
Operating Concern online in the SAP Learning Hub.
Business Example
Your company has legal entities in different countries. The controlling department must
report sales and profitability both across the company in a group currency and in the local
currency of each legal entity. The sales managers require the following data:
● Summarized sales performance figures, such as revenue, discounts, and surcharges, both
along and across the lines of the sales structure, product lines, and customers
● Sales and marketing costs along these lines
Evaluate the options available for the organizational structures for CO-PA.
Evaluate the configuration of an operating concern.
1. Check the basic settings and organizational assignments for the A000 operating concern
using the App: Customizing Monitor (KECM) and answer the following questions:
● Is the controlling area A000 assigned to the A000 operating concern?
● Does the A000 operating concern have the same fiscal year variants as the controlling
area A000?
● Does the assigned company code 1010 also have the same fiscal year variant?
● What chart of accounts do the controlling area and the company code have?
● Is the sales organization 1010 assigned to the company code 1010?
You can find the App Customizing Monitor (KECM) in the tile group COPA Basic
Configuration.
a) In the SAP Fiori launchpad, go to the tile group COPA Basic Configuration and choose
the App Customizing Monitor - KECM. If the Set Operating Concern window appears,
enter operating concern A000 and select the Costing-based radio button. Choose
Continue.
b) Expand the hierarchy with operating concern A000 and controlling area A000.

c) On Customizing Monitor - Organizational Structures: Initial screen, choose Operating
concern: A000 → CO Area: A000 → Company Code: 1010 → Sales Org.: 1010
Verify, that the controlling area A000 is assigned to the concerning area A000.
d) In the Customizing Monitor - Organizational Structures: Initial screen, double-click on
operating concern A000 and check the fiscal year variant. Do the same for the
controlling area A000 and the company code 1010. The fiscal year variant is identical:
K4.
Note that controlling area and company code use the same Chart of Accts value, YCOA.
e) In the Customizing Monitor - Organizational Structures: Overview screen, expand the
node with company code 1010. You can verify that the sales organization 1010 has
been assigned.

LESSON SUMMARY
Unit 2: Structures

Unit 2
Lesson 2
Defining Data Structures
LESSON OVERVIEW
This lesson defines data structures and identifies the transaction data structures. In addition,
this lesson explains the Profitability Analysis (CO-PA) database structures and the operating
concern templates.
Business Example
The management of your company wants to implement a profitability accounting application
in your SAP system. As a member of the project team, you must recommend whether to
implement CO-PA and/or using the Profit Center Accounting (PCA) in the New GL. Then, you
will be responsible for implementing the selected applications.
Your company requires the following information:
● Both cross-company and company-specific reporting of contribution margins in multiple
currencies
● Multidimensional analysis of sales information, cost-of-sales information, production
variances, and period cost information for the various market segments
● Estimated costs for the actual costs posted only at month-end
● Actual period costs (Selling, General and Administrative; or S, G and A) for the various
organizational entities at month-end
● Analytic by value category and by income statement account
For this purpose, you need to configure the operating concern, which represents a sales and
marketing reporting unit for a corporation. You also need to understand the concept of
characteristics and value fields. For this reason, you require the following knowledge:
● How to define data structures
● How to identify transaction data structures
● How to describe the CO-PA database structures and the operating concern templates
LESSON OBJECTIVES
● Define data structures
Data Structures
Name an operating concern and then define its attributes. After the attributes are defined,
define the data structures for the operating concern by selecting the required value fields and
characteristics for the profitability segment. Then save, activate, and generate the data
structures.

During the generation process, the system creates the tables CE1XXXX through CE8XXXX,
and check tables. The tables CE1 through CE4 are of particular significance for the market
segments. Note that the data in costing-based Profitability Analysis (CO-PA) is stored in
separate tables. The actual data for account-based CO-PA is stored in the universal journal
ACDOCA, the plan data in table COSP (totals) and COEJ (plan line item).
Table 3: Data Tables COPA
Tables Structure
CE0xxxx Logical line item structure
CE1xxxx Actual line item table
CE2xxxx Plan line item table
CE3xxxx Segment level
CE4xxxx Segment table
CE4xxxx_KENC Realignments
CE4xxxx_ACCT Account assignments
CE4xxxx_FLAG Posted characteristics
CE5xxxx Logical segment level
CE7xxxx Internal help structure for assessments
CE8xxxx Internal help structure for assessments
Hint:
CE4 contains the profitability segments and its characteristic values. Each
profitability segment is defined by its segment number. The segment number is
used to select the totals and line items. The direct selection of the line items is
also possible by one or more characteristics. CE3 contains the totals for COPA
costing based It contains the profit segment number, the characteristics for
fiscal year and posting period and the values. The table for actual line items in
COPA costing based contains all characteristics and value fields, as well as
technical characteristics.
Unit 2: Structures

Figure 63: Operating Concern Data Structures
The following steps describe the process for defining data structures:
1. Check whether all required characteristics and value fields are available. If not, create
them using transaction KEA5 (characteristics) and KEA6 (value fields).
2. Define attributes:
Define attributes of the operating concern and save the operating concern.
3. Define data structures:
Copy the required characteristics and value fields (applicable for costing-based CO-PA) to
the operating concern, save them, and activate the data structures. Following activation of
the data structures, all the necessary tables are created. When assigning characteristics
and value fields, activation is required. Otherwise, the assignment is lost.
Reactivate the environment after you change the data structures of an operating concern. For
example, reactivate the environment after you add a new characteristic or a value field.
Note:
The regeneration process does not affect any existing transaction data. The
regeneration process does not automatically back populate any new fields for
existing transaction data either. However, this step may sometimes be performed
using the CO-PA realignment or periodic valuation functions.
The regeneration process does not affect any characteristic values that have
already been entered in check tables for user-defined characteristics.
Lesson: Defining Data Structures

CO-PA Transaction Data Structures
Figure 64: COPA Transaction Data Structures
Costing-based CO-PA stores its transaction data in its own data tables. The system creates
these tables when it activates and generates the operating concern. Because costing-based
CO-PA stores its transaction data in its own data tables, it does not affect the speed at which
reports are executed in other CO applications.
Account-based CO-PA stores its transaction data with SAP S/4HANA Enterprise
Management in the following tables:
● Line item actual data in the universal journal ACDOCA
● Plan data in the classic tables COSP (totals) and COEJ (line items).
Note:
All line items with an account assignment to a controlling object like COPA are
updated in table ACDOCA and in table COEP. One reason is PRIMA NOTA
which means, that a posting caused by a controlling object must be updated by
a cost accounting line item. Another reason is the fact. that ACDOAC is not
available for all value types. Although, the actual data in reporting COPA
account based are selected from COEP, such data are synchronized with
ACDOCA.
The table for summarized actual data COSS is just a view. This table does not contain any
data. The table COSP and COEJ are still used for plan data in account-based CO-PA.
Unit 2: Structures

Animation: COPA Transaction Data Structures
For more information on COPA Transaction Data Structures, please view the
animation in the lesson Defining Data Structures, online in the SAP Learning Hub.
The system stores the definitions of profitability segments for both CO-PA sub-modules in the
same table, CE4XXXX (where XXXX is the operating concern). The system always accesses
this segment definition table when posting the transaction data for costing-based or account-
based CO-PA.
Profitability segments represent the account assignment objects for CO-PA. These segments
are a unique combinations of characteristic values that are created by the system. The
characteristic values are numbered automatically by the system from the information in the
originating transactions.
CO-PA Costing Based Transactions and Tables
Figure 66: COPA Transaction Data Structures - Example
The tables CE3XXXX and CE4XXXX work effectively together to store the summarized
transaction information, both actual and plan, for costing-based CO-PA.
The CO-PA drill-down reporting tool accesses the data in the tables CE3XXXX and CE4XXXX.
You can access the line item data and the information from the tables CE1XXXX and
CE2XXXX through line item display features.
Animation: COPA Transaction Data Structures - Example
For more information on COPA Transaction Data Structures - Example, please
view the animation in the lesson Defining Data Structures, online in the SAP
Learning Hub.

CO-PA Costing Based Database Structures
Figure 68: COPA Database Structures
The data of CO-PA is divided into characteristics and value fields. The system stores the
characteristics in the data division of the table CE4XXXX. The key of the table CE4XXXX
consists of the profitability segment number that is used as a join field for the table CE3XXXX.
The key of the table CE3XXXX consists of the profitability segment number, the posting
period, and some other technical fields that are not listed. The value fields are also specified.
The table CE4XXXX represents the profitability segments that are created based on business
considerations. The table CE4XXXX is created when an operating concern is created. The
table CE3XXXX contains the values posted to the profitability segments, broken down into the
posting period.
The typical record lengths are as follows:
● CE4XXXX = 250 bytes
● CE3XXXX = 2000 bytes
Animation: COPA Database Structures
For more information on COPA Database Structures , please view the animation
in the lesson Defining Data Structures, online in the SAP Learning Hub.
Profitability Segment in the Universal Journal
In the SAP ERP architecture, SAP Accounting has to solve the following challenges:
● The usage of different actual tables in the specific modules of Financial Accounting (FI)
and Management Accounting (CO) requires the reconciliation of the results of FI and CO.
Unit 2: Structures

● The modules contains only its own data, in comparison with other modes probably at
different data levels.
● The modules are structured in a different way, and data fields and entities are different.
● There are different economic principles in the different modules, like Multi-GAAP,
customer fields, currencies, and so on.
● To report the whole truth in Business Intelligence, several BI - Extractors are necessary.
The complete profit-and-loss statement requires all the modules in financial and management
accounting. The following restrictions apply:
1. The Material Ledger does not store the general ledger account and has no profit center.
2. Asset Accounting does not store the totals and sub-totals in profit center and general
ledger accounts.
3. Different detail levels in FI and CO. The ratio of FI to CO documents is 1:n. The ratio of
positions is n:m.
4. General ledger and CO-PA are posted to a different point in time and are actualized with
different entities.
Figure 70: Universal Journal in SAP Accounting and Controlling
In the SAP S/4HANA architecture, the general ledger uses the universal journal. The universal
journal takes the “Best of all Modules”, such as ledger, profitability segment, coding block,
and so on. The general ledger table ACDOCA is for actual data and ACDOCP is for plan data. It
contains all details for all applications and gives the possibility for table extension.
Animation: Universal Journal in SAP Accounting and Controlling
For more information on Universal Journal in SAP Accounting and Controlling,
please view the animation in the lesson Defining Data Structures, online in the
SAP Learning Hub.

Note:
In view of the fact that the actual data in the accounting COPA should always be
coordinated with the postings in the ACDOCA, a direct posting in COPA Account
Based is not possible using transaction KE21N.
The data are stored only once, so a reconciliation is no longer necessary. Redundancy is
removed and memory space is reduced.
A fast multi-dimension reporting is possible without the necessity to replicate the data to
Business Warehouse (BW). For the use of BI (Business Intelligence), only one extractor is
needed.
The reconciliation effort is obsolete because of using the Universal Journal. These efforts
include the following:
● G/L versus FI sub-ledgers and CO
● G/L versus CO-PA
● Reconciliation of multiple ledgers
● Reconciliation ledger
● Reconciliation of SAP ERP and data warehouse
● Reconciliation of totals versus line items
This enables you to fasten the periodic end closing and save costs.
In the further generation SAP ECC, it is recommended to keep the number of profitability
segments as low as possible. Therefore, the quantity of totals records required in the
profitability segment also remains low. This can be achieved by restricting the selection of
characteristics for the profitability segment using the transaction. This function is no longer
necessary in SAP S/4HANA and is therefore simplified.
Using account-based CO-PA , it is possible to use the derivation of characteristics as defined
in CO-PA within a posting in the New GL. Requirements:
● Account-based profitability analysis must be active.
● The corresponding G/L account must be one of the following account types:
- Primary Costs or Revenue
- Secondary Costs
Using this function, it is possible to report to projects and orders in CO-PA, although they
have not been settled to CO-PA. On the other hand, additional characteristic values might be
derived, when:
● A settlement rule has been defined in the order or project.
● Results analysis has been performed.
● The cost object has been completed in subsequent steps in the business process.
Example: If a revenue is posted with assignment to a sales order item as cost object and the
sales order item has a settlement rule to a profitability segment, the corresponding
profitability segment data is read and written to the income statement item. The attribution
for balance sheet accounts in only available for special cases which are event-based revenue
Unit 2: Structures

recognition and the settlement of a production order to Financial Accounting. Using event-
based revenue recognition means an automatic execution of result analysis, when posting to
the cost object. The classic reporting tools for drill-down reporting in CO-PA cannot report
such data, only the new reporting tools for ACDOCA.
The usage of Prediction Ledger will be discussed in unit 4.
Operating Concern Templates
Figure 72: Operating Concern - Templates
CO-PA provides operating concern templates, predefined sample operating concerns, and an
environment to display the Customizing settings for these operating concerns. You can
change the Customizing settings and copy them.
The following operating concern templates are delivered by SAP:
● S_AL: Template for airline profitability
● S_GO: Cross-industry template
● S_CP: Consumer goods industry template
Operating concern templates offer the following advantages:
● They enable you to demonstrate and gain an insight into CO-PA without performing
Customizing.
● They simplify Customizing in CO-PA. If necessary, you can adjust your Customizing
settings for an operating concern template as required, copy these settings, and then use
the copied and adjusted operating concern productively.
Animation: Operating Concern - Templates
For more information on Operating Concern - Templates, please view the
animation in the lesson Defining Data Structures, online in the SAP Learning Hub.

Quickstart
Figure 74: Quickstart
With an operating concern template, you can gain an initial overview of CO-PA without any
specialist knowledge and without carrying out any prerequisite settings. Preset operating
concerns are also available, allowing CO-PA to be integrated into your productive system
quickly. If required, you can customize these operating concern templates and reset the
templates to their original settings.
To use a template, start the transaction for operating concern templates and choose a
template.
The details view provides an overview of the delivered settings and the modifications that you
can make. By choosing Application Examples, you can view reports and planning layouts. The
system fills the application examples with example data to demonstrate clearly how the
application works. You can delete the example data later.
If you want to use an operating concern template for your CO-PA, first copy it. You can find
this function under Tools, from where you can also choose to reset an operating concern
template back to its initial state.
Animation: Quickstart
For more information on Quickstart, please view the animation in the lesson
Defining Data Structures, online in the SAP Learning Hub.
Unit 2: Structures

Unit 2
Exercise 3
Display Data Structures, Characteristics, and
Value Fields
Simulation: Display Data Structures, Characteristics, and Value Fields
For more information on Display Data Structures, Characteristics, and Value
Fields, please view the simulation in the lesson Defining Data Structures online in
the SAP Learning Hub.
Business Example
The following requirements apply for the value fields and characteristics that are needed for
profitability reporting in your company:
● Your sales manager requires summarized sales performance figures, such as gross
revenue, discounts, and surcharges. These are required both along and across the lines of
the sales structure, product lines, and customers of the company.
● The sales manager also wants to view sales and marketing costs along these lines.
Evaluate the different sources of characteristics and the settings available for value fields.
Task 1: Display Defined Characteristics
In the CO-PA settings menu, verify the defined characteristics of the operating concern A000.
1. Display the characteristics of the operating concern A000.
2. Determine the check table for the Sales district characteristic.
3. Determine the origin table for the Industry characteristic.
Task 2: Identify Characteristics and Value Fields
Based on the requirements of your project team, which are defined in the company scenario,
you determine that certain characteristics and value fields are required for reporting. In the
data structures of the operating concern, determine which of the following items are value
fields, non-fixed characteristics, fixed (delivered) characteristics, and technical fields:
Item
Controlling Area Fiscal Year Profit Center
Cost Element Material Group Revenue
Customer Number of Employees Sales District
Customer Discount Posting Date Sales Organization
Customer Group Price Reduction Variable Production Costs

Note:
The overview list contains all user-defined characteristics, default characteristics,
and characteristics selected from the reference tables. It does not include fixed
characteristics or technical fields.
1. Determine which characteristics are non-fixed characteristics.
2. Determine which characteristics are fixed characteristics.
3. Determine which fields are technical.
4. Display the characteristic for Strategic Business Unit. Determine which type of
characteristic the Strategic Business Unit is.
5. Determine which fields are value fields.
6. Determine the aggregation settings for the value field: Number of Employees.
Why would you decide to use this field?
Unit 2: Structures

Unit 2
Solution 3
Display Data Structures, Characteristics, and
Value Fields
Simulation: Display Data Structures, Characteristics, and Value Fields
For more information on Display Data Structures, Characteristics, and Value
Fields, please view the simulation in the lesson Defining Data Structures online in
the SAP Learning Hub.
Business Example
The following requirements apply for the value fields and characteristics that are needed for
profitability reporting in your company:
● Your sales manager requires summarized sales performance figures, such as gross
revenue, discounts, and surcharges. These are required both along and across the lines of
the sales structure, product lines, and customers of the company.
● The sales manager also wants to view sales and marketing costs along these lines.
Evaluate the different sources of characteristics and the settings available for value fields.
Task 1: Display Defined Characteristics
In the CO-PA settings menu, verify the defined characteristics of the operating concern A000.
1. Display the characteristics of the operating concern A000.
a) In Customizing, choose Controlling → Profitability Analysis → Structures → Define
Operating Concern → Maintain Characteristics.
b) On the Edit Characteristics: Start screen, select the Chars. from operating concern
radio button, and enter the operating concern A000.
c) Choose the Display button.
2. Determine the check table for the Sales district characteristic.
a) On the Display Characteristics: Overview screen, double-click the row for the Sales
district characteristic.
The Display Char. BZIRK screen displays all information about the Sales district
characteristic.
The check table is T171.
b) Double-click the field with name T171 and navigate to the table that has the values for
sales district.
c) Double-click the icon Contents, which is to the left of the icon Technical Settings.

d) Choose the Execute button and verify the entries for the characteristic Sales District.
e) Return to the Display Characteristics: Overview screen.
3. Determine the origin table for the Industry characteristic.
a) On the Display Characteristics: Overview screen, select the row that has the value
BRSCH in the Char. column.
b) Check that the Origin Table column has the value KNA1. Like in the previous step, with
double click on the field with the table number you can navigate to Dictionary: Display
Table and using the Contents icon and the Execute function, you can view the content
of the table which are the customer master data.
Note:
Remain in this screen for the next task.
Task 2: Identify Characteristics and Value Fields
Based on the requirements of your project team, which are defined in the company scenario,
you determine that certain characteristics and value fields are required for reporting. In the
data structures of the operating concern, determine which of the following items are value
fields, non-fixed characteristics, fixed (delivered) characteristics, and technical fields:
Item
Controlling Area Fiscal Year Profit Center
Cost Element Material Group Revenue
Customer Number of Employees Sales District
Customer Discount Posting Date Sales Organization
Customer Group Price Reduction Variable Production Costs
Note:
The overview list contains all user-defined characteristics, default characteristics,
and characteristics selected from the reference tables. It does not include fixed
characteristics or technical fields.
1. Determine which characteristics are non-fixed characteristics.
a) On the Display Characteristics: Overview screen, select the Description column, and
choose the (Sort Ascending) button.
Customer Group, Material Group, and Sales District are all non-fixed characteristics.
Otherwise, such characteristics would not appear in this list but in the list of fixed
fields.
2. Determine which characteristics are fixed characteristics.
a) On the Display Characteristics: Overview screen, choose Extras → Fixed fields.
b) In the Fixed fields dialog box, on the Charact. tab page, note that Customer, CO Area,
Profit Center, and Sales Org. are all fixed fields.
Unit 2: Structures

S4F29 Profit Analysis for sap beginer.pdf

S4F29 Profit Analysis for sap beginer.pdf

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