Configuring CO-PA in S/4FIN

[Former Member]

I am working with a client, which is service business, and they are implementing S/4HANA as a greenfield implementation. The recommendation in S/4HANA is to use account based CO-PA, rather than costing based CO-PA as all the information can now be available on the universal jnl. I understand the logic behind this, and in terms of reporting, all the analysis available from costing based CO-PA is now available on the GL, and so CO-PA and FI does not need to be reconciled. However I am struggling with how this should actually be configured. One of the main reasons costing based CO-PA was generally preferred was because it applied COS postings at the point of, and in direct relation to billing. Account based CO-PA followed FI rules and the costs were only posted at the point of goods issue or actual posting of the cost, and a subsequent allocation to CO-PA was then performed. In a scenario where labour costs, for example, are incurred to complete a sales order, how would this be shown in account based CO-PA (and in real time), when actual labour costs are posted via payroll to a cost centre, once a month? Allocating to profitability segments would likely be a complex and/ or manual assessment which would, at best, only be run at month end. Can the methods applied in costing based CO-PA, such as valuations, (either through product costing or condition types) now be set up in account based CO-PA? I’m struggling to find any clear guidance on how to set up CO-PA in S/4HANA, that clearly shows how the traditional benefits of costing CO-PA can be achieved through account based CO-PA which is now the recommended approach. Any advice is welcome. thanks

[sanilbhandari · Accepted solution]

Hi

Account based COPA has greatly been enhanced in S/4 HANA. However, the complete functionality of costing based COPA still very much exists in S/4 HANA. You can still continue to use S/4 HANA without using Account Based COPA. The decision of what form of COPA you want to use essentially depends on the business use case that you need from COPA. For eg, you mentioned using Sales Order to capture costs and than you might probably settle at month end. If you are into services, say for Automotive servicing, where the usage of cost objects like Sales Order or project is highly likely I would still go for costing based COPA rather than Account based COPA since the reporting granuility for this kind of business is still not available with Account based COPA. Ultimately, it is your business use case for COPA which should drive your decision. You can also refer to one of my documents which talks about new functionalities in Account based COPA in S/4 HANA Finance.

Regards

Sanil Bhandari

[Former Member]

Hi Samir,

I am in a similar situation and I would chose ABCOPA but I would also expect to have the same granularity of reporting.

Could you clarify your scenario
:

"Where labor costs are incurred to complete a SO"

Are you talking about BD work or FTE from OTC to process the SO?

the BD work can be collected at WBS level with a Resource Related Billing linked to SO. The second case would be an overhead rolled up into product cost. Reporting would be different between those 2.

"Where actual labor are posted via payroll once a month to a cost center"

Could you provide an example of reporting required? Are you looking at the profitability by contract?

In my case I would be interested to know the decision you took specifically around the  characteristics settling from the Project WBS into COPA? Please let me know if you have more details.

Thanks,

J

[Former Member]

Thanks both for your responses. So I guess my query is mainly around labour in COS (i'm intentionally not using "COGS", as no goods are being manufactured). Labour won't be posted at PGI, even if it is direct. Will it? However labour is the primary part of the std cost of the services being sold (at my client), so it is important to capture at another level beyond what is posted via payroll. I'm developing the opinion that it is only possible analyse labour like this (at std rates) in cost based CO-PA? is this true? Thanks Samir

[ajaycwa1981]

Yes. That's right

[Former Member]

thanks for coming back Ajay.

[ajaycwa1981]

Hi Samir

How did CBCOPA used to post COGS? It posted at the time of Invoice

What did it used to post? - The Split of COGS based on Std Cost into Value Fields

What will ABCOPA do? - It will post COGS at PGI (Instead of Invoice) and will post the same Split of COGS based on Std cost into GL Accounts

Dont confuse it with actual cost. Actual cost is something you get only when you do ML

Ajay M