SAP Margin Analysis (previously known as Account Based CO-PA) allows organizations to gain insights into their margins, revenues, and costs of specific market segments such as products, customers, material groups and other dimensions. The goal is to provide management with contribution margin information to aid in the decision-making process. With S/4HANA, you can perform Profitability Analysis using both the Costing-based CO-PA and Margin Analysis methods. SAP recommends Margin Analysis as the default solution even though both Costing-based and Margin Analysis can co-exist. This is because, only the Margin Analysis solution updates the universal journal (ACDOCA), and all future innovations will only be made for Margin Analysis.
How to Distribute Costs During Periods of Irregular Production Activity
WALK AWAY FROM THIS SESSION WITH AN UNDERSTANDING OF DISTRIBUTING COSTS DURING PERIODS OF IRREGULAR PRODUCTION ACTIVITY
There are certain scenarios where the activities of a business are not aligned with the period when the costs for those activities are incurred. This occurrence is typical with companies with seasonal production cycles, such as those in the Agribusiness industry, whose investments in land or other resources, do not always coincide with when the utilization of those resources occurs. In those cases, a cost model is set up so that the original cost is spread through the periods of the production cycle, when the actual cultivation of the land takes place.
In these times, where disruption due to COVID 19 has impacted many industries and hence production activities, the model described above could also be useful. During periods of Production Downturn which leads to minimal or no activity, how do you reflect that in a cost structure that had assumed that production will take place? Hear from Rogerio Faleiros, SAP Controlling Expert and Author, who will take you through the following:
- Using Assessments between Cost Centers and Internal
- Orders for Operational Expenses
- Using Internal Order Settlement to transfer Costs to AUCs
- Setting up Depreciation Rules to reflect periods of Uneven
Production
- Using the Allocation Structure to Distinguish Between
- Different Types of Costs
Measuring and Managing Customer Profitability
You may have interest in this article I authored titled “Measuring and Managing Customer Profitability” for the Strategic Finance magazine published by the Institute of Management Accountants. Its message is that customers are the source of financial value to increase shareholder and owners’ value. But today customers view suppliers’ products and service-lines as commodities. Therefore suppliers must provide differentiated services to different customer segments. The sales volume of high demanding customers is not proportional to their profit level because they cause extra expenses from their suppliers. (I wrote the article related to my part time role as the IMA Executive in Residence now in my 4th year term. The www.imanet.org has 85,000 members in 140 countries.) Here is the link to directly download the article as a pdf file:
“Measuring and Managing Customer Profitability”; IMA Strategic Finance; February 2015.
I have also recorded two courses on this topic with Michael Management Corporation:
My first course is MMC – IC0541: Analytics Based Enterprise Performance Management
Second course MMC – IC0593: Measuring and Managing Customer Profitability
Third course MMC – IC0599: Driver-based Planning, Budgeting and Forecasting