Organizations have different requirements now as they face a more competitive and innovative market. As a result, there is a high demand for real-time information analysis and flexibility in profitability reporting, and that demand only continues to increase.
Profitability analysis is a subcomponent of controlling with SAP S/4HANA and is used to support managers during their decision-making process. The data used in profitability analysis is enriched with characteristics derived from the value flow of predecessor documents, and therefore can be displayed and analyzed from various angles.
Profitability Analysis: SAP S/4HANA vs. SAP ERP
In SAP ERP, there are two types of profitability analysis (shortened to CO-PA): account-based and costing-based. In SAP S/4HANA, you’ll find costing-based profitability analysis and “margin analysis,” the new name for account-based CO-PA.
Costing-based CO-PA is used the most in the SAP ERP environment. No changes have been made to the data model, setup, and usage of costing-based profitability analysis in SAP S/4HANA. SAP will no longer invest in further development, but it’s still supported for usage and implementation in on-premise SAP S/4HANA. (You cannot use it in SAP S/4HANA Cloud.)
Account-based CO-PA wasn’t used that much in SAP ERP, as it lacked a lot of functionality compared to its costing-based sibling. Profitability analysis in SAP S/4HANA has been revolutionized with margin analysis so that it gives users a snapshot of their management reporting not only in the past and present, but also in the future, in addition to improved analytical capabilities.
Margin analysis is fully integrated in the Universal Journal. Therefore, it’s reconciled by design. The internal and external views in accounting are harmonized and allow comprehensive reporting with drilldown functionality in P&L statements and balance sheets. The objective for the future is to completely separate margin analysis and costing-based profitability analysis and to deliver a margin analysis without operating concern based on the field catalogue of the Universal Journal.
We published Profitability Analysis with SAP S/4HANA to help you better understand and use the new functions to improve your analytics capabilities and make faster and better-informed business decisions.
Inside the Profitability Analysis with SAP S/4HANA Book
Begin with an overview of SAP S/4HANA and profitability analysis. Learn more about the latest changes and develop an understanding about your different options. Walk through a detailed description of the organizational structure settings and master data necessary for setting up costing-based CO-PA and margin analysis.
Explore the value flow and configuration settings of margin analysis. You’ll learn about end-to-end processes and how they are transferred to CO-PA, along with necessary configuration to display them correctly. Then focus on the end-to-end processes and how they are transferred to costing-based analysis. Configuration settings and an example of how to test settings are explained.
Finish the book with planning and reporting features. Understand SAP’s planning strategy within SAP S/4HANA and the traditional planning methods for costing-based CO-PA. Then turn to the reporting functionalities to gain insight into traditional reports for costing-based CO-PA and new reporting options with SAP S/4HANA for margin analysis.
Who Is This Book For?
This title can also be useful for those working with the SAP S/4HANA FP&A module and know how to set up the configuration for account based and/or costing-based profitability analysis.
About the Author
Kathrin Schmalzing is a director at one of the “big four” consulting firms. Before she transitioned to consulting, Kathrin first worked in the automotive industry in the controlling department, giving her a clear view of the challenges faced by end users and the daily tasks in controlling. Kathrin has been working with SAP solutions since 2002 and has been involved in multiple end-to-end implementations of SAP S/4HANA solutions at an international level. Her current focus is on process simplification and modernization with analytics in SAP S/4HANA financials and FP&A, as well as on their integration with logistics.
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Need some more background? Learn more about profitability analysis with SAP S/4HANA Finance here.