This blog post explains Top-Down distribution in Margin analysis. Top-down distribution is a periodic function helps to distribute aggregated data to more granular level based on reference information such as revenue, customer group etc.
In margin analysis, KPI’s such as Revenue, Direct costs are generally captured at more granular level – Customer and Product level. However, business transactions such as advertisement costs are captured at higher level customer group and later distributed to more granular level with the help of Top-down distribution.
The original cost postings captured at higher level should have profitability segment such as customer group which is used to link sender data to corresponding reference data. In case the original postings do not have profitability segment (only at cost center), then need to perform overhead allocation (COPA assessment) to distribute the cost from cost center to profitability dimension at higher level such as customer group level. Refer my blog post on Universal Allocation – COPA Assessment for details. The second step is to perform top-down distribution to distribute at more granular level based on reference dimension such as customer group.
Defining Top-Down Distribution Templates:
The templates control how each characteristic is used and processed in top-down distribution. They determine which margin analysis fields are shown on the different tabs of the allocation segment definition. They also influence the processing logic during top-down distribution.
New template can be created by providing template name, description and allocation context is defaulted to ‘Margin Analysis’. Tolerance maintenance is optional.
Processing instructions maintenance is the key step in defining top-down template. By default, few characteristics are defaulted such as company code, profit center which cannot be deleted. We can also add or remove characteristics from the available directory as below:
There are four categories:
- Distributed Value
This field is only used for reference data selection. In the distribution result, the value of this field is filled from the corresponding reference data.
- Summarized Value
After sender data and reference data are selected, the value in this field is cleaned up. So, the corresponding sender data and reference data will be summarized. In the distribution result, the value of this field will be empty. However, for fields where derivation logic is predefined by SAP, the value will be filled through derivation.
- Retained and Relevant to Reference
During distribution, this field is used to link sender data to corresponding reference data. In the distribution result, the value of this field is retained as it is in sender.
- Retained but Irrelevant to Reference
During distribution, this field is not used to link sender data to the corresponding reference data. After distribution, the value in this field is retained in the distribution result as it is in the sender.
If you do not want characteristics which are set as “Retained and Relevant to Reference” or “Retained but Irrelevant to Reference” or ‘Summarized’ to be shown on the UI as selection criteria, you can mark the flag ‘Hidden on UI’. In this case, the fields will not be shown in the segment. However, the controls of the characteristics will remain.
Also, additional amount and quantity fields can be used for key figure reference.
Creation of Top-Down Distribution Cycle:
App Name: Manage Allocations
- Use the Cost Centers, Profit Centers, and Margin Analysis allocation contexts for allocation cycles
- Use the Distribution, Overhead Allocation/Intercompany Allocation, and Top-Down Distribution, allocation types for allocation cycles
- Edit, create, copy, or delete allocation cycles/Segments
- Conduct checks of allocation cycles and allocation segments
- Navigate directly to the Run Allocations app to initiate the allocation run for one or more allocation cycles or view the details of completed allocation runs
- Upload allocation cycle and segment definitions using a preformatted .xlsx file template.
App Name: Manage Allocations
Allocation cycle can be executed from the app Manage allocation or from the app Run allocations.
Line-item display report for original cost postings with profitability segment characteristics (Customer Group) at aggregate level:
Reporting after Allocation:
App Name: Display Line Items – Margin Analysis
App Name: Market Segments – Actuals
This blog post provides insights on Top Down Distribution in Margin analysis for distributing aggregated data to more granular level based on reference information. Share your feedback in the comment section.
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