Costing COPA and cost element category '1' for Revenue and COGS

[Former Member]

Hi,

In my SAP environment historically Revenue GL accounts were created as cost element with category '1' (costs) and are being posted against cost centres. I know it is not SAP best practice, but it has been working like that in here for years. We have not activated and used COPA so far.

I am currently analysing options of implementing costing based COPA. I wonder if the fact that Revenue and COGS accounts are created as cost element with category '1' should cause any issues with COPA.

I know that in a perfect world it should be '11' for revenues and '12' or no cost element for COGS, I just hope we can leave CE category '1'.

Thank you,

Karol

[ajaycwa1981 · Accepted solution]

Hi Karol

No you can not.. When billing is posted from SD, cost ele with Catg 1 will not get posted into COPA... you need to have Category 11 or 12 cost elements

If you are implementing COPA from next year - Then change your Cost ele category from next year onwards.... You cant change it in between the year

If you are implementing COPA during this year - Then you need to have Cost Ele catg 11 or revenues... COGS should not be created as Cost Elements...

BR,Ajay M

[Former Member · Accepted solution]

Hi Ajay,

Thank you for explanation. I feared it would cause issues. However, I checked with one company code that has active COPA.

It has two Revenue accounts: one set as '11' , which is used for most automatic SD postings and other one with '1' category which is 'Other revenues' - sometimes used for automatic postings (configured in VKOA for services) and often used for manual revenue postings.

What I noticed is that documents posted for this 'Other Revenues' were posted against cost centre but also profitability segment was populated. However, it was only populated with sales quantity, no Revenue value field was updated. It must have been configured so it does not show error in COPA but update is not complete in PA table. No COGS split value fields are updated as these postings refer to services.

What I also obseved is that all COGS accounts are set as '1' and are linked to cost centre. But this seems to not affect COPA and it creates COPA document with correct COGS split into cost component category value fields.

So I assume this is only issue for Revenue accounts with '1'. COGS can be left with '1' for time being.

Do you know which config for Revenue account with '1' might have stopped COPA from giving error while posting invoices in SD?

Thank you,

Karol

[ajaycwa1981 · Accepted solution]

Hi

1. COGS account with Cost Ele catg 1 wont impact COPA in anyway because Costing based COPA is not updated at the time of PGI.. You might have mapped it to a Cost center in OKB9, but thats not the best practice

Cost Comp Split is updated to COPA during billing.. You are unnecessarily increasing the line items in the system and also causing double accounting of COGS in CO

2. If Cost Ele catg is 1 for revenue account, billing from SD (VF01) would fail.. This is beyond doubt... System would give an error "Cost Ele catg 1 is not recommended for costing based COPA"

You can make manual FI postings into this GL, but SD billing wont be able to post revenues in it

BR,Ajay M

[Former Member · Accepted solution]

Hi Ajay,

There must be something weird about my settings, but they somehow allow VF04 processing billing documents for this revenue account with category '1'. There are PA document, CO docuemnt and FI document posted original document is VA02 billing doc. In config the link between SD and PA is the pricing condicion PR00 to value field VV010.

When I go to profitability document - there is only Sales quantity updated in value fields. Revenue value field is blank...

Maybe it would change something - but we have both costing and accounting COPA active in that Operating concern.

I have no idea why our system allows that. Still, it is not acceptable to miss some revenues in PA, so I will have to work with Finance to create new Revenue accounts and change SD account assignment accordingly.

Thanks,

Karol

[ajaycwa1981 · Accepted solution]

Hi

Yes, I would suggest to open new accounts for revenue and COGS.. make revenue as category 11, discounts as category 12 and dont make COGS as cost element

BR,Ajay M

[Former Member]

hi..

Revenue account with cost ele cat "1" is used for cost reducing element and posted to Cost Centre and not flow to COPA.

Suppose you have Expen account for Rent and also some Revenue account for Rent, You want to set off the two account and differencial you want to charge. Then you use Rent Rev account as cat "1".

I think this will help you

kkumar