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Realignments finally available in Account Based CO-PA with S/4HANA 1610

Realignments finally available in Account Based CO-PA with S/4HANA 1610

Since the introduction of Simple Finance (now S/4HANA Finance) Account Based CO-PA is the preferred Profitability Analysis method. Costing Based Profitability Analysis is still available and both types can be used in parallel. However all new features will be introduced in Account Based Profitability Analysis and this is the only type which provides complete integration with the General Ledger.

So to make use of all the benefits of S/4HANA and the Universal Journal (ACDOCA), Account Based Profitability Analysis is the way to go. At least, if you don’t have reasons which are keeping you away from this type of Profitability Analysis. In my first Blog “Finance in S/4HANA 1610: The What, Why and How” I had already mentioned some gaps and limitations in Account Based Profitability Analysis. One of these limitations is finally solved in S/4HANA 1610, well at least partially solved because there are still some minor limitations.

One of the things I liked most of Costing Based Profitability Analysis was the possibility of cancelling and reposting CO-PA documents independent from the General Ledger posting. This is at the same time one of the downsides of this type of Profitability Analysis, since there is now alignment with Financial Accounting or the General Ledger. However it gives you a lot of flexibility to add or change characteristics, even to historical data.

Introduction of Realignments in Account Based CO-PA

Account Based Profitability Analysis in S/4HANA gives us the advantage of full integration with the General Ledger. However there was no possibility to change or add characteristics after a posting was completed. The Profitability Characteristics were tightly integrated in the General Ledger posting in the Universal Journal (ACDOCA).

As of S/4HANA 1610, the Realignment functionality comes to Account Based CO-PA. Some of you will already be familiar with Realignment in CO-PA (KEND), since this is an already existing functionality in SAP. I barely used it because I mostly preferred to cancel and repost the CO-PA document to reflect changes instead of Realigning. With Account Based CO-PA, Realignment is your only option to make changes to Characteristics.

Why is the availability of this functionality that important and what are the business requirements? The most important are the following:

  • Reflect organizational changes in your product, sales or customer structure in already posted documents.
  • Make corrections to inconsistencies or incorrectly assigned characteristics at the time of the original postings.
  • Enrich profitability data by information not yet available at the time of posting.

General Facts and limitations

Since there is no separation of Financial Accounting and Management Accounting data anymore in the Universal Journal there are some limitations in changing document.

  • Changes to journal entries have to always follow the guidelines of standard accounting principles
  • Realignment of Universal Journal can only be processed for non-GL relevant information
  • Changeable CO-PA Characteristics are pre-defined by SAP and selection cannot be changed by users

Available Characteristics for realignment

As mentioned, the list of Characteristics is pre-defined by SAP. Some characteristics can be changed only when they are initial at the time of realignment. The complete list of Characteristics is provided below.

Type Characteristics Rule
By SAP defined and by customer activated CO-PA characteristics Material

Vol. Rebate Grp

Industry

Sales District

Sales Office

Sales Group

Country

Customer Group

Material Group

ABC Indicator

Form of manufacturer

‘* other Customer defined characteristics’

Characteristics are always changeable without restrictions.
Fixed Characteristics that are not GL Relevant Billing Type

Sales Org.

Distribution Channel

Division

Plant

Customer

Characteristics are only changeable if field is initial at time of realignment.
Fixed Characteristics that are not GL Relevant Sales Order

Sales Order Item

WBS Element

Cost Object

Internal Order

Cost Center

Can only be changed if not true account assignment and initial

 

Characteristics that cannot be changed

The table below contains all Characteristics of the Operating Concern that cannot be changed:

Characteristics
Company Code

Controlling Area

Functional Area

Business Area

Profit Center

Partner Profit Center

Segment

 

Executing the Realignment

As mentioned, the realignment functionality is not new, it was already available before. The transaction code is not changed and is still KEND. If Costing Based CO-PA is activated, Realignment is processed for both Profitability Analysis methods (Account and Costing Based). This is in order to keep the information in sync.

The realignment characteristics are updated in the Universal Journal (ACDOCA) and in case of Costing Based also in the Segment Tables (CE4xxxx). So there are no new line items generated through the realignment run.

The original information (as posted view) from the Universal Journal is stored in a dedicated table.

You can execute transaction KEND in SAP GUI or do it in Fiori:

Realignment App in Fiori

The following selection does not make sense, since Realignment will be updated in both types of CO-PA:

Realignment Selection

I created the following Realignment run:

Realignment Run

I would like to change the material group of a specific material. So in the Selection Condition of the run I have selected the material number:

Realignment Selection Conditions

The Material Group in one material in the selected billing document has changed. I just want to update the Material Group. So this is my selection in the Conversion Rules:

Realignment Conversion Rules

This indicator can be set if you want to re-derive Attributed Profitability Segments:

Realignment Attributed Segments

If you are new to Attributed Profitability Segments you can read my blog on this newly released functionality.

The old Material Group was 01 in the initial document. This can be checked in ACDOCA:

ACDOCA Original Posting

Material Group in material changed to 02:

Fiori Material Master

Execute the Realignment run:

Execute the Realignment run

The Realignment run is finished successfully:

Realignment Run successfull

In ACDOCA you can see that the Material Group in the original Journal entry is changed:

ACDOCA changed posting

Original “As Posted” values

As you have noticed, after Realignment the Characteristics in the original Journal posting are changed. However the initial Characteristics values are still available for the “as posted view’’ of the document. In case of Account Based CO-PA these values are stored in the dedicated table ACDOCA_KENC.  For Costing Based CO-PA these values are stored in table CE4****_KENC.

The original “as posted” values are taken from ACDOCA_KENC:

ACDOCA_KENC

When a Realignment Run is restored the values in ACDOCA_KENC for that Realignment run are deleted. So there are no additional line items created for the Restore of the Realignment.

Restoring the original values

Since the original values are kept in a dedicated table. It is always possible to restore the Realignment.

Realignment Restore

Realignment Restore Job

After executing the Restore you will see that the status of the Realignment run is changed:

Realignment Restore status

The posting in the Universal Journal (ACDOCA) will be restored to the default Material Group 01:

ACDOCA after Realignment Restore

Availability for S/4HANA Finance

The Realignment functionality for Account Based CO-PA is available in 1610. However you can also activate the functionality if you are on S/4HANA Finance 1605 (SAP_FIN 730). The functionality comes with support package 05 (SAP_FIN 730: SP 0005) or you can enable it by implementing a bunch of OSS notes. The main OSS notes are the following, and these will guide you to all the other relevant notes:

  • 2350123 – S/4 HANA Finance: Realignment for account-based profitability data I
  • 2344759 – S/4 HANA Finance: Realignment for account-based profitability data II

Final Words

To conclude, I’m very pleased to see the availability of Realignment for Account Based CO-PA. This was one of the major gaps between Account and Costing Based CO-PA preventing customers to completely switch over to Account Based. In daily practice you can’t avoid organizational changes or the fact that attributes are wrongly assigned. Without completely cancelling and reposting Documents it was not possible to reflect these changes in Account Based CO-PA before. This was the major argument for customers to not work with Account Based CO-PA in S/4HANA.

With the release of Realignment for Account Based CO-PA I think we are a step closer to a complete integration of General Ledger and CO-PA. There is just one major gap left in Account Based CO-PA: The support of statistical SD condition not posting to GL.

Attributed Profitability Segments in S/4HANA 1610

Attributed Profitability Segments in S/4HANA 1610

In S/4HANA 1610 a new functionality called ‘Attributed Profitability Segments’ is introduced. It is now possible to derive a (statistical) profitability segment when there is another real CO object with a settlement rule to COPA.

I was hoping that this would fix some occurring issues with Account Based COPA in S/4HANA. Below, I will explain the scenario I have been dealing with in my example with a revenue bearing time & material service order which is billed with a debit memo. The debit memo request has an account assignment to the service order. The service order has an settlement rule to COPA. In this example I use an S/4HANA Finance 1503 environment.

In my second example I will show you how the Attributed Profitability Segment in S/4HANA 1610 works. See the difference yourself and decide if you can benefit from this new enhancement.

Current issues in Account Based Profitability Analysis

Here I will show you a time & material service order scenario and the reporting issues in Account Based COPA without having attributed profitability segments.

T&M Service Order

As you can see in the settlement rule, the order will be settled to COPA:

Service Order Settlement Rule

The Debit Memo request is created with DP90:

In the account assignment in the sales order line items you can see the assignment to the service order and no assignment to a Profitability Segment.

Debit Memo Request Account Assignment

This means that you cannot report on the Revenu in Profitablity Analsyis untill the Service Order is settled. Even then, you will see the revenue on the settlement cost elements, not on the original revenue cost element.

Reporting

Let’s have a look on the data of this Invoice and service order in the ACDOCA table.

The top rows in the blue rectangular are the actual postings on the service order (e.g. Revenue Accounts). The others are postings resulting from the settlement of service order (settlement cost elements). In this example I have my COPA characteristic Ship to Party and Ship to Country. As you can see these fields are not derived during the daily postings. They are only derived when the service order is settled to COPA.

ACDOCA

The result is that I don’t have my COPA characteristics on my revenue GL accounts. Reporting in COPA with the use of standard ACDOCA reports and KPI Fiori tiles will result in incomplete figures in these cases.

Have a look at the Actual Revenue KPI tiles in Fiori which come with SAP Smart Business as part of Embedded Analytics. The Revenue KPI app is based on Account Based COPA, thus Cost Elements and corresponding profitability characteristics. In this current scenario the profitability characteristics are not assigned to the revenue accounts. What you will see is this:

Revenue KPI tile

The same issues applies on the new ACDOCA report ‘Market Segment Actuals’:

Market Segment Actuals

The only way to overcome this is building your own reports in HANA Live and making reports in one of the SAP Business Object tools available (Lumira, Webi or Analysis for Office). Similar to what I have done for my T&M service order profitability in Analysis for Office:

Service Order Analysis for Office Report

 

Using the attributed Profitability Segments in S/4HANA 1610 

As mentioned at the beginning of this post, the new functionality called ‘Attributed Profitability Segments’ has been introduced. If there is a real account assignment to one of the objects below, the system can derive “statistical” (or attributed) COPA segments for reporting purpose:

  • Cost Center
  • Internal Order
  • Project
  • Sales Order
  • Production Order

Unfortunately the service order is not included in this list as object. Thus a direct solution for my scenario explained above has not been provided yet by SAP. I hope the service order will be supported soon as receiving CO object.

However let’s see how this new functionality works with a supported object, the internal order. Technically it’s the same issue we are solving, but instead of the service order we use an internal order as account assignment. In the configuration I have activated the Attributed Profitability Segment for internal Orders only for postings on P&L accounts. As mentioned at the beginning of my post, I will use a S/4HANA 1610 environment in this example.

The below internal order has an settlement rule to COPA.

Fiori Internal Order

Fiori Internal Order Settlement Rule

I create a sales order with assignment to the above internal order in the line item. As you can see there is no assignment to COPA.

Fiori Internal Order Sales Order

Final posting of the invoice:

Final Posting Sales for Internal Order

After posting the invoice you will see the attributed segment in the revenue line item in the ACDOCA table.

The real CO account assignment can be found in field Object Type (ACCTASY) which is the Internal Order in this case. As you can see the COPA characteristics like the Material, Customer, Material Group, Customer Group and Ship to Party are derived as well!

ACDOCA with Attributed Profitability Segments

I see huge benefits in this new functionality for reporting purposes since profitability characteristics are derived directly at the moment of posting even if there is another CO assignment. For me it was a long awaited functionality, however I’m very disappointed that it isn’t working yet in scenarios were the service orders is the receiving cost object. I have addressed this to SAP and waiting for a reply.

I hope you have enjoyed reading this and I wonder if you have experienced similar issues with CO objects as well? If you have other thoughts or questions related to this subject, please don’t hesitate to leave a comment. If there are any other S/4HANA related cases you would like to see, just let me know and perhaps I can write a future post on the topic.