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Book Excerpt: Introduction to Reconciling SAP CO-PA to the General Ledger by Paul Ovigele, Founder & CEO of ERPfixers
Account-based CO-PA is the form of CO-PA that groups costs and revenues into cost elements. This grouping requires all profit and loss accounts (or at least all the accounts that you want to be displayed in CO-PA) to be created as cost elements.
Initially this may seem intuitive in the SAP context, because we have always been told that all profit and loss accounts should be set up as cost elements. However, for the more astute user, you will know that some accounts (such as the production variance account, the work-in-process account and the cost of sales account should not be set up as cost elements. When using account-based CO-PA these accounts should also be set up as cost elements if you plan to use them in CO-PA reports. A typical example is with the cost of sales account (this is the account that is debited when a Post Goods Issue is performed on a sales order delivery). If you are using account-based CO-PA you will need to create this account as a cost element and assign it in transaction OBYC to transaction key GBB and account modification VAY. You can group the cost elements in CO-PA reports using cost element groups such as revenues, discounts, cost of sales, etc. which are created using transaction KAH1.
Account-based CO-PA was introduced after costing-based CO-PA to help facilitate the reconciliation of CO-PA to the general ledger.
The advantages of account-based CO-PA are the following:
The disadvantages of account-based CO-PA are basically the advantages of costing-based accounting, such as the inability to classify costs into components like raw material, labor, fixed and variable overhead; and the inability to break out production variances into their various categories. Account-based CO-PA is therefore not a replacement for costing-based CO-PA, but a complement to costing-based CO-PA and helps accountants to understand the account significance of their profitability analysis reporting.
Stay tuned for a blog post next week on costing-based CO-PA.
Keep reading in Reconciling SAP CO-PA to the General Ledger by Paul Ovigele.
Paul Ovigele is the Founder & CEO of ERPfixers. He has worked as an SAP consultant since 1997. He has delivered numerous training sessions, spoken at major SAP conferences around the world and written 2 bestselling SAP books. Having identified an imbalance in SAP consulting over the past decades, Paul founded ERPfixers to help clients access quality, skilled and immediate solutions for their most pressing SAP issues. Learn more about http://www.erpfixers.com/.