Presented by Ashish Sampat
Learn about the history of how SAP software has evolved over the last five decades. Topics will include CO FI Real Time Integration example in ECC; Changes brought in by HANA, cloud and various acquisitions; Important design and configuration changes for Controlling in S/4HANA; Cost Elements are now part of G/L Account; Material Ledger is mandatory in S/4HANA; Cost components and variances break down can now flow to Financial Accounting; Move towards Margin Analysis and Other Features and Innovations.
Watch this session with S/4HANA Expert, Ashish Sampat, to gain insight into the following:
- Look at the history of how SAP software has evolved, particularly in Controlling
- Look at few examples of how customers have improved their productivity by optimizing the use of SAP software for Controlling
- Learn about changes brought in by HANA, cloud and various acquisitions
- Learn about important design and configuration changes for Controlling in S/4HANA
- Cost Elements are now part of G/L Account
- Material Ledger is mandatory
- Cost components and variances break-down can now flow to Financial Accounting
- Move towards Margin Analysis (based on Account-based CO-PA)
Q&A
Q: Can we have more details on COPA Account based vs Margin Analysis?
A:
Margin Analysis in the new name for Profitability Analysis in S/4HANA. One can loosely consider Margin Analysis same as Account-based CO-PA in S/4HANA.
In ECC, Costing-based CO-PA has several advantages over Account-based CO-PA. Costing-based has been a preferred choice for majority of the clients
With additional features (like COGS Split, Production Variance Split, Realignment), Account-based CO-PA has significantly improved in S/4HANA.
Account-based CO-PA helps remove duplication of two separate sources of information for FI-GL and Profitability
Clients migrating to S/4HANA, will automatically switch to Account-based CO-PA, but will also face a decision point on whether to continue using Costing-based CO-PA
Costing-based CO-PA is also optionally available in S/4HANA, but there are not many additional advantages of using costing-based as compared to ECC.
Q: In my current implementation, the scope has no production planning and no sales and distribution, but I want to activate COPA. What is the suitable choice in S/4HANA 2020? Can I use customized characteristics to have profitability according to these characteristics?
A: Even though you do not have sales and distribution in SAP, I assume you are planning to bring in sales data from legacy sales system into SAP through interface. If so, it makes sense to use CO-PA / Margin Analysis to report on the profitability. Given that Account-based CO-PA is the preferred choice for S/4HANA, I would recommend you evaluate whether Account-based is the correct choice (most likely it is). Yes, one can use customized characteristics for your Operating Concern.
Q: Is Periodic valuation (KE27) available in S4 Margin Analysis "account-based" COPA?
A: One can bring the actual cost breakdown into S/4HANA Margin Analysis, just like KE27 in costing-based CO-PA in ECC.
Q: What are the new features in product costing S/4HANA?
A:
In ECC, the steps involved in costing runs are: Selection, Structure Explosion, Costing, Analysis, Marking and Release. With S/4HANA, the structure explosion step has been removed
Another change in the costing run steps in S/4HANA is that the parameters of the Selection step now include a new checkbox: Explode Multilevel Structure. Selecting this checkbox means that the semi-finished products and raw materials are costed along with the materials selected for costing
S/4HANA now offers a repeat costing run feature, which enables a costing run to be executed on a monthly, quarterly, or yearly basis, without having to manually create the run each time
Q: We are using costing-based CO-PA on ECC right now. We have not activated account-based CO-PA. When we move to S/4HANA and opt for account-based CO-PA, will we get historical data for account-based CO-PA for prior years?
A: There is no standard way to convert historical data from costing-based CO-PA to account-based CO-PA. Either one needs to activate account-based CO-PA ahead of time or use custom tools to build history for prior periods. Information about one such tool (Winshuttle) can be found in this whitepaper https://www.erpfixers.com/whitepaper-what-to-expect-when-migrating-finance-from-sap-ecc-to-sap-s/4hana and this webcast https://www.erpfixers.com/blog/planning-your-finance-migration-to-sap-s4hana
Q: When we say material ledger is mandatory with S/4HANA, what if I do not want to use actual costing functionality – do I still need to use it? (To give some background, we are not using actual costing functionality in ECC as of now)
A: If you are not using actual costing (price determination 3- single/multi-level) currently, then you do not need to use it in S/4HANA. Transaction-based (price determination 2) is automatically available in S/4HANA
Q: You mentioned that cost elements are now part of GL account in S/4HANA. What happens to cost element groups? Are these also gone made part of GL Accounts?
A: Cost element groups are still available and maintained via the same transactions KAH1, KAH2 and KAH3
Q: Now that cost elements are now part of GL account in S/4HANA, can one post an FB50 journal entry to secondary cost elements?
A: No, one cannot to post a direct journal entry to secondary cost element. One must go through controlling transactions meant for specific business transaction (e.g. KB21N/CORK/COR6N for activity posting, KSU5 for assessment)
Q: For those who are not using Material Ledger and migrating to S4, do we need to do any additional configuration and master data changes? Do they need to be considered other than just activating the Material Ledger?
A: If you are not planning to use actual costing (price determination “3” – single/multi-level), then no additional configuration is necessary. System automatically sets material masters to price determination “2” – transaction-based during the conversion process