S/4 HANA Real time COPA / Margin Analysis. Goodbye Periodic Jobs…

Why this solution was introduced ?

Today, organizations are investing in advanced reporting solutions which can provide data real time. Real data is needed for fasted decision making. Should they be waiting for periodic jobs like settlement or assessment for the profitability reports?

The USP for HANA has been real time profitability. When SAP launched their first HANA product i.e HANA COPA accelerator way back in 2011, it was advertised as a solution which can provide the real time profitability.

However, the real time data in COPA only works for an organization who just have revenue by sales for product. But today’s business are more complex and most of the multinationals earns significate revenue by services, repair, revenue projects, make to order engineering etc. in addition to traditional sales of goods.

Moreover, all these business processes other then traditional sales and delivery of goods relied on settlement of cost object( internal order, service order, WBS elements) to COPA for profitability report. Therefore, we were getting on an architecture where although we have very advanced in-memory reporting solution( either S/4 Hana or HANA as sidecar) but the data to feed those table still rely on settlements which is month end process.

Additionally, for new margin analysis, some organizations rely on assessment/ distribution cycle for overhead costs from cost center to COPA. Which being a periodic jobs delays the generation of report.

Both settlement and assessment cycles are typically month end jobs which organization runs before close of monthly books.

Additional info on margin analysis

Account based COPA has been rebranded as Margin Analysis by SAP. It’s goes beyond the existing capabilities of account based COPA and gives few balance sheet items like accrued revenue, deferred revenue. As it’s different tropic in itself, I won’t discuss about in this blog.  More details can found in this link https://help.sap.com/viewer/5e23dc8fe9be4fd496f8ab556667ea05/1909.001/en-US/87b9bd54c3378e21e10000000a44176d.html .

What’s new with S/4 Hana ?

With S/4 Hana, SAP have tried to take care of this problem and COPA characters can be populated without settlement or COPA assessment cycles. This works on the best guess method where the SAP tries to get the COPA characters from either settlement rule or COPA derivation in case of cost center. Initial COPA characters populated during posting can be still rectified by settlement, if they are changes.

It’s called derivation of items without profitability segment. Configuration as follows

Let’s get in detail by following examples of Internal order and cost center.

Internal order

Once we activate this configuration, FI posting to the internal order as posted as standard as below.

Additionally, settlement rules are maintained as follows.

Finally, ACDOCA table is populated with profitability characters for the FI posting which will be used for reporting without waiting for settlement to be executed.

Please note it only appears on report based on ACDOCA table and Fiori Margin Analysis reports. It won’t appear in KE24 line item report unless settlement is complete.

Cost Center real time COPA report without assessment

Cost center are used to capture overhead and some organization allocated them COPA for the net margin report.

The following configuration is required for real time COPA report without waiting for allocation.

and KEDR COPA derivation rule setting for COPA postings

     Finance posting in COPA is posted as usual.

And it leads to posting in ACDOCA table

Conclusion

This feature provided by SAP is very powerful and will help the organization is getting profitability report without waiting for settlement job. Today, with big data, in-memory computing and greater emphasis on data, this is a quite a significate feature and in my opinion, it’s a great feature which comes with S/4 Hana.