SAP is introducing a new form of Profitability Analysis (CO-PA), combined CO-PA. Combined CO-PA reveals a lot of new functionalities. It uses value fields and has much more functionality than costing-based CO-PA. In fact I wouldn’t be surprised if it eventually replaces costing-based CO-PA. The special feature of combined CO-PA is that it allows you to reconcile to the general ledger (G/L) accounts as it stores accounting information. Therefore, the biggest challenge of costing-based CO-PA—reconciliation with the SAP General Ledger—is solved. Combined CO-PA allows reporting across value fields and G/L accounts. The next section includes a definition of the CO-PA and a short summary of its existing forms of CO-PA. I then explain the functionalities of combined CO-PA. CO-PA is a module within the Controlling (CO) module that is used as a sales controlling instrument to display contribution margin calculations or to display a profit-and-loss (P&L) statement according to cost-of-sales accounting. Organizations use CO-PA to analyze their sales and margins by different characteristics. Costs and revenues are assigned to a multidimensional, user-defined profitability segment as shown in Figure 1. Previously there were two forms of CO-PA:

• Account-based CO-PA: The profitability segment is built out of G/L accounts and characteristics. Account-based CO-PA gained much more importance as well as functionality with SAP S/4HANA Finance. Before, account-based CO-PA was often used to facilitate the reconciliation with the SAP General Ledger. With the integration of account-based CO-PA in the Universal Journal to build one single source of truth, SAP recommends that you activate account-based CO-PA with the implementation or upgrade to SAP S/4HANA Finance.
• Costing-based CO-PA: The profitability segment is built out of value fields and characteristics. Before SAP S/4HANA Finance and the Universal Journal, a lot of organizations were using costing-based CO-PA because of the functionalities it offered, such as the cost of goods sold (COGS) split or the price-difference split. Costing-based CO-PA did not gain any new functionalities with SAP S/4HANA Finance. The storage of data still takes place in separate tables and the reconciliation of costing-based CO-PA with the G/L is still a tough challenge. Nevertheless, there are still reasons to implement costing-based CO-PA as it still has functionalities such as the valuation with different cost estimates that are not available in account-based CO-PA as well as the value-field approach.

The new form of CO-PA, combined CO-PA, solves reconciliation issues of costing-based CO-PA and is enhanced by new functionalities. It does not replace account-based CO-PA. When combined CO-PA is compared with account-based CO-PA, the major differences are:

• Account-based CO-PA is based on G/L accounts, whereas combined CO-PA is based on value fields.
• Account-based CO-PA allows the use of attributed profitability segments, whereas combined CO-PA does not support the use of attributed profitability segments.

In the next section, I describe the data structure of combined CO-PA and explain the functionality of reconciliation.

What Does the Data Structure of Combined CO-PA Look Like?

The profitability segments of account-based CO-PA are integrated in the Universal Journal and therefore easily reconcile to the SAP General Ledger. The profitability segments of costing-based CO-PA, however, are saved in separate data structures. There is no connection between value fields and G/L accounts, making reconciliation really hard. Combined CO-PA also uses separate data tables. The documents are not integrated in the Universal Journal, but the structure of the documents is fundamentally different from the document structure of costing-based CO-PA. The documents consist of a document header and three further segments (Figure 2). What data or which characteristics are stored in the different segments?

• Document header: The document header stores the data that is also stored in a financial document header (table: BKPF – Accounting Document Header) such as document number, posting date, or company code. In addition, the document header in combined CO-PA stores all the characteristics that are derived in this document—both those that are assigned as fixed characteristics in the SAP standard system and those that are custom-specific characteristics.
• Accounting segment: The accounting segment refers to the accounting document that was created in the FI module and also contains the source document number that is elementary to allowing a reconciliation of the combined CO-PA with the SAP General Ledger. The different currency views are also stored in the accounting segment. Combined CO-PA has a new currency concept that differs from the traditional CO-PA. I describe this new currency concept in detail in “How to Configure Currency Settings in CO-PA.”
• Value field segment: The value field segment contains the value field view and the different currency views based on the currency types that are assigned to the operating concern in combined CO-PA.
• Quantity segment: The quantity segment contains the different quantities that are assigned to the operating concern in combined CO-PA. The quantity concept in combined CO-PA is also different from the traditional CO-PA as you will learn when I explain the configuration of combined CO-PA.

I now describe an example for a combined CO-PA document of a billing invoice. You see that the document has four different tabs. The Characteristics tab contains information about the characteristics that are derived in this document (Figure 3). The Values tab contains the information about both the value fields that are posted to and the source FI document with the corresponding G/L accounts. This link makes the reconciliation of combined CO-PA with FI easier. In Figure 4 you see that the total value on G/L account 410000 for sales revenue is 1.00 USD. When you have a look at the combined CO-PA document, you can see that the value for the sales is 1.00 USD and is reconciled with the FI value. You can also see a Direct Material Costs value field with a value of 0.50 USD. This value matches the COGS that have been posted with the goods issue in the delivery related to the billing invoice. In the Quantities tab you can see the transaction quantity and any additional quantity that you maintained in the configuration of combined CO-PA. In Figure 5 there is a Reporting Quantity defined, but no value derived. In the last tab, Reference/Administration, some general data is stored, such as the Record type, the Period, and Fiscal Year in which the document has been posted to as well as the user and time the document has been posted and much more. Combined CO-PA also works with record types in the same way as costing-based CO-PA. The record types are similar to the document types in FI and classify the origin of the posting as, for example, billing document or order settlement. In combined CO-PA, a new record type is being introduced: record type L—goods issue. In costing-based CO-PA the goods issue was transferred to CO-PA with the billing document. At the time of creation of the accounting document, no costing-based CO-PA document was created. Therefore, the COGS amount /COGS G/L accounts were the biggest challenge in reconciling costing-based CO-PA with FI. Combined CO-PA creates a document when the goods issue is posted. This document is saved with record type L— goods issue. You now may wonder how you can generate a P&L in a COGS view. The document with record type L has a Billed check box in the Reference Data tab of the combined CO-PA document. This check box is updated once the billing invoice is posted. The documents for the goods issue and the billing invoice refer to each other by sales order number and line.

What Are the Technical Prerequisites for Activating Combined CO-PA?

To be able to activate combined CO-PA some technical requirements have to be fulfilled. One of the following requirements has to be fulfilled to be able to activate combined CO-PA in your system:

• The system has to be on S4CORE level SP1, which is available since December 2016.
• Implement SAP Note 2370683—Various enhancements in the profitability analysis. To be able to implement this SAP Note, you have to be on SAP S/4HANA Finance 1610 or higher.

Once you have implemented one of these two requirements, you are able to activate combined CO-PA. To create or change an existing operating concern, follow menu path Controlling > Profitability Analysis > Structures > Define Operating Concern > Maintain Operating Concern or execute transaction code KEA0. This action opens the Maintain Operating Concern screen (Figure 6) in which you change the existing operating concern (Z001). In the Data Structures tab, you can see a check box named kombiniert (German for combined) in the Type of Profitability Analysis area. Select this check box to activate it. In the Data Structure section, click the Change button to assign value fields to the operating concern. I assume that you activated the account-based CO-PA before and already assigned characteristics to the operating concern. The configuration of combined CO-PA is almost identical to the configuration of costing-based CO-PA. There are a few different configuration steps, however. To configure combined CO-PA, execute transaction code KEPSL. This action opens the screen in Figure 7. I describe the most important configuration steps. Additional configuration steps for new or additional functionality are still in development and will be added to the configuration menu of combined CO-PA once they are available.

How to Configure Number Ranges in Combined CO-PA

After activating the combined CO-PA, you define a number range for actual postings. Follow menu path Combined Profitability Analysis > Define Number Ranges for Actual Postings or execute transaction code KEN3. In the Range Maintenance: cPA: Line Items Act screen (not shown), you enter the operating concern for which you want to maintain a number range. Click the Define Groups button. This action opens the screen shown in Figure 8. Z001 in the screen description will be replaced by the technical name of your operating concern. You see an overview of record types as known from costing-based CO-PA. Those record types have to be assigned to a number range. In Figure 8 they are all assigned to number range 01. The number ranges for planning data are created by following menu path Combined Profitability Analysis > Define Number Ranges for Planning Data or execute transaction code KEN4. The planning for combined CO-PA is supposed to take place in SAP Integrated Business Planning and not directly in transaction code KEPM–Planning Framework as is the case with costing-based CO-PA.

How to Configure Currency Settings in CO-PA

The currency concept in combined CO-PA is new and differs from the other types of CO-PA. It is much more flexible and has only one mandatory currency type, which is the company code currency. This currency type is assigned to combined CO-PA by default. In addition, you are able to assign any currency type from FI or the operating concern currency to combined CO-PA. It is no longer mandatory to assign the operating concern currency to combined CO-PA. Therefore, if all your company codes have the same company code currency, there is no need to assign an operating concern currency. To assign currency types to combined CO-PA, follow menu path Combined Profitability Analysis > Currency Types and Translation or execute transaction code KEPLC04. This action opens the screen shown in Figure 9 in which you see an overview of all currency types that are assigned to your operating concern. In the Currency Types section of Figure 9, select Company code currency, and in the dialog structure on the left side of the screen, navigate to the Currency Translation folder. This action opens the screen shown in Figure 10. You see all record types that are assigned to the currency type. The translation logic is assigned to each record type individually to allow maximum flexibility in the currency translation. You can also assign a user exit for the currency translation. Therefore, you must first program the user exit and then select the check box in the Exit Active column. Selecting the check box in the Issue Err. (issue error) column enables an error to be displayed when the translation is not successful and the transaction does not allow a posting. To check the translation settings for a record type within a currency type, select a record type and click the details icon (the magnifying glass). This action opens the screen shown in Figure 11 in which you can maintain a sequence for the currency translation as well as maintain an exchange rate type that is used for the translation. In the 2. Complete values section, you can define a sequence of currency types from which the value shall be copied in the new currency type (Step 1: Copy values with same Currency). In Step 2: Translate values from Currency Type, you can define that a value is translated with a specific exchange rate type at a specific date. In the currency translation, the system fills the value with the first value it finds (for example, if there is no value in Company code currency, it moves on to Document currency before it moves to step 2). In the Options area, you can determine that the value is determined by a customized rule that has been coded in a Business Add-In (BAdI). If you check the Issue error if no value found check box, the transaction is not posted and no document is created if the system does not find a value. You can create an additional currency type (for example, if you want to display all your actual values with the exchange rate type that you used for planning). Therefore, you follow these steps:

1. Create a new currency type (see the instructions before Figure 9).
2. Assign record types to the currency type for which you want to execute the translation.
3. Create an entry in step 2 (see Figure 11) with the following parameters: Currency type = company code currency, exchange rate type equal to exchange rate type used in planning, and translation date = posting date.

How to Configure Quantity Settings in Combined CO-PA

Combined CO-PA also has a new concept for the assignment of quantities. In the document of combined CO-PA there is a Quantity segment that allows a flexible reporting of quantities. For example, you can create a reporting quantity. If you are selling products in different units of measure, you can calculate all sales quantities in a specific unit of measure to be able to compare their results. Before assigning a quantity to combined CO-PA, you need to create a quantity view. The creation of the quantity view creates a quantity field for the quantity view in the combined CO-PA document in the background. A prerequisite to generating a quantity view is that a quantity value field has been assigned to the operating concern. To create a quantity view to combined CO-PA, follow menu path Combined Profitability Analysis > Quantity Views or execute transaction code KEPLC03. This action opens the screen shown in Figure 12. After you click the New Entries button, you can create a new quantity view by populating the fields under the Quant.View and Quantity View Name columns in Figure 12. After the creation of a quantity view, you have to regenerate your operating concern. To regenerate the operating concern, follow menu path Controlling > Profitability Analysis > Structures > Define Operating Concern > Maintain Operating Concern or execute transaction code KEA0. In the screen that opens (not shown), go to the Environment tab and click the activate icon for both the Cross-client part and Client-specific part to regenerate the operating concern. After the creation of the quantity view you need to maintain a rule for how the Quantity field is filled with values. To maintain a quantity field rule follow menu path Combined Profitability Analysis > Rules for Quantity Fields or execute transaction code KEPLC06. This action opens the screen shown in Figure 13. In this screen click the New Entries button and then create a new step for the quantity view that you created in Figure 12. In Figure 13 Step 100 is created. Step 100 refers to Quantity Value Field VVQTY—Altern. Quantity— and that is assigned to the quantity view reporting quantity. In the Reaction on Failed Step column, you can choose if you want to display an error, warning, or information message if the quantity calculation has been unsuccessful. For my example, in Figure 13 choose Information. Select the step that you just created and click the details icon to determine the details of the rule. There are different possibilities for the determination of the quantity view:

• The quantity can be calculated by accessing the Material Master (e.g., convert sales quantity in standard quantity).
• The quantity can be calculated to an alternative quantity unit.
• The quantity can be copied from the source document (material document).
• The quantity can be calculated via a development.

In Figure 14 the quantity will be converted to a fixed unit as indicated in the Quantity Field Rules area. The objective is to have all documents converted in one unit of measure to be able to compare the sales and gross margin better. After the definition of the quantity field rule, the parameters have to be maintained in the Parameter area. In Figure 14 the Source Quantity is defined as the quantity that is transferred into the quantity value field ABSMG—sales quantity. You can choose here from any quantity value field that is assigned to the operating concern. The transaction quantities are assigned by default to combined CO-PA. The transaction quantity is, for example, the sales quantity. In addition, you need to indicate to which unit of measure the quantities have to be converted. In Figure 14 the quantities will be converted to Unit CAR—Carton. Selecting the convert via Material Master check box instructs the system to look for a conversion rule for alternate units of measure in the Material Master.

Reporting in Combined CO-PA

A pivot browser and three different virtual InfoProviders are available for combined CO-PA to analyze data. The pivot browser can be accessed via transaction code KE24N. The pivot browser allows you to analyze plan and actual data in one transaction. Both aggregated and line items can be analyzed with the pivot browser. The transaction code KE31—create Report Painter Report cannot be used to create reports for combined CO-PA. If you have various forms of CO-PA activated in your system make sure you execute transaction code KEBC and select combined CO-PA before you execute the pivot browser. The pivot browser follows the concept of a query. After each change in the selection criteria or in the layout, the system queries the database. The selection criteria of the pivot browser in the Display CO-PA Data transaction (transaction code KE24N) are highly flexible. You can adjust the selection criteria to your needs and requirements. The selection criteria shown in Figure 15 can be adjusted to add any characteristic or value field that is assigned to the operating concern to the selection criteria. You also can save different variants of selection criteria. In the pivot browser you can add characteristics and value fields. You cannot adjust the selection that you made in the selection screen, but you can filter for organizational units, customer-specific characteristics, product-specific characteristics, and key figures. Once you execute the pivot browser you can see the combined CO-PA documents in the left side of the screen (Figure 16). On the right side of the screen you see different tabs. The first tab allows you to add additional columns to your layout and to filter on specific characteristics or organizational units. You can save all those layouts. The pivot browser therefore allows you to easily and flexibly analyze your data according to your needs. The tool also allows you to reconcile your data with FI as you can insert a column with the G/L account and the finance document number.