SAP CO-PA Valuation using Material Cost Estimate – Part I
SAP CO-PA Valuation using Material Cost Estimate – Part I
CO-PA is used for viewing the profitability of any organisation. The profitability report majorly contains following components:
Revenue
Sales Deductions
Cost of Sales
Gross Margin
Admin Expenses
Accounts & Finance Expenses
Sales and Marketing Expenses
Net Margin
Out of the above components, Cost of Sales plays critical part in the Profitability. In case of Retail Industry (Trading Business) the business is more interested in total Cost of Sales. Whereas wen we speak about the Manufacturing Industry the total Cost of Sales is to be substantiated with complete break-up of the cost.
This break-up of cost is available in the form of “Cost of Goods Manufacture” which stores the details of the break-up or Cost Component Split under the “Cost Component Structure”.
The Cost Component Structure typically contains the particulars of fixed and variable cost like Material Cost, Labour, Power, Depreciation, Overheads, External Processing etc.
SAP has two options to capture Cost of Sales
Only total of Cost of Sales
Cost of Sales with Cost Component Split as stored under Cost Component Structure
In this series of posts we will try to look into the configurations required for Cost of Sales with Cost Component Split.
Implementation Consideration
Valuation Strategy
The configuration starts with creation of a Valuation Strategy. Lets look further into the same:
IMG Path: Controlling > Profitability Analysis > Master Data > Valuation > Valuation Strategies > Define and Assign Valuation Strategy
System will navigate us to the following screen where we have to click on New Entries and the system allows us to maintain Valuation Strategy as per our requirement:
Create Valuation Strategy
Maintain Sequence and Quantity Field
After entering the Valuation Strategy, the next step is to maintain “Quantity Field” and sequence for the Valuation Strategy. For this, select the line of Valuation Strategy created (Z01) and double click on “Details” folder appearing on the left side and the system will navigate us to the following screen where we maintain various relevant information by clicking on New Entries button:
This screen contains following fields for entry, lets see through each field for deeper understanding:
Sequence: Enter the Sequence in which the strategy should be used.
Application: This ID determines which application the costing sheet being used comes from, available options are “KE” – Profitability Analysis and “V” – Sales and Distribution. (Required only under Valuation using Conditions)
Costing Sheet: Select Costing Sheet which is to be used for valuation. (Required only under Valuation using Conditions)
Mat. Cstg.: This is a button where we have to select if this valuation will be based on Material Cost Estimate.
Qty Field: Enter the Quantity Field here. We can use the same Quantity Field used in SD-COPA Mapping.
Exit No.: It is possible to write an exit for valuation strategy. If any such exit is developed, write the code here.
Variant for TP: This field is relevant in case of planning.
Value Field: This field is relevant in case of planning.
Once all the above information is maintained, click on save button to save the configuration.
Assignment of Valuation Strategy
Next step is to assign the valuation strategy, for this double click on the “Assignment of Valuation Strategy” folder on left had side and the system will navigate us to the following screen:
In the above screen we need to maintain following information:
Point of Valuation
This is the specific point at which we wish the Valuation Strategy to be assigned. Given below is the list of available options:
01 – Realtime valuation of actual data 02 – Periodic revaluation of actual data 03 – Manual planning 04 – Automatic planning
Record Type
Here we have to select the type of record for which this valuation strategy will be applied. Given below is the list of available options:
A – Incoming sales order B – Dir.posting from FI C – Order/proj.settlemnt E – Single trans costing F – Billing data I – Order-rel. project
Plan Version
This field is applicable in case of planning, so we are skipping this field as of now.
Valuation Strategy
Enter the relevant Valuation Strategy Code. In our case we have selected “Z1” created by us.
Now click on save and the data will be saved and we are though with creation and assignment of Valuation Strategy.
Each step in a CO-PA valuation strategy is determined by one of the following: – Entering a costing sheet/pricing procedure (and application key) – Selecting the material cost estimate indicator – Entering a user exit – Entering a transfer price variant and corresponding CO-PA value field
What Next?
We will continue our discussion on Valuation using Material Cost Estimate in the next posts to have complete information on the Cost of Sales information in CO-PA. Next post will contain information on creation of Costing Keys.
References
#COPA #SAPValuation #SAPCO #ValuationStrategy #SAPCOPA #SAPCostOfSales #SAPControlling #SAP