Systematic Guidelines for

Reconciling CO-PA to the

General Ledger
Paul Ovigele
Ovigele Consulting

2012 ERP Corp. All rights reserved.

Introduction

Learn the difference between Costing and Account-based COPA

Discover what to look out for when reconciling CO-PA to the
General Ledger
Learn how to match the Cost-of Sales G/L account with its
corresponding CO-PA value field
Find out how to repost documents in CO-PA only

Topics

Overview of costing and accounting-based CO-PA

How costing-based CO-PA ties to the General Ledger
Matching the cost-of-sales G/L account to CO-PA
Additional CO-PA reconciliation issues
Reposting documents in CO-PA only
Summary
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

Overview of Controlling Profitability Analysis

Collects Revenues and Costs from various modules in order to

analyze profitability
Inherits the characteristics that are associated with those
revenues and costs
Examples of Characteristics are Customer, Product, Region,
Salesperson, etc.
Excellent tool for analysis but not easily reconcilable with the
General Ledger

Costing Based CO-PA

Groups costs and revenues into Value Fields

Value fields are mapped to Conditions, G/L Accounts, Cost
Components and Variance Categories
This was the original model of CO-PA
When people say CO-PA they are normally referring to CostingBased CO-PA

Advantages and Disadvantages

Advantages
Splits the cost of sales value
into its different cost
components
Can classify production
variances into their different
categories
Better visibility of contribution
margin as fixed and variable
costs can be broken out

Disadvantages
Does not show G/L Accounts
hence not as easily
reconcilable
More complicated to set up as
it requires mapping of value
fields to various objects

Account-Based CO-PA

Uses Accounts as a basis for reporting

All P&L Accounts would need to be created as cost or revenue
elements
Categories of cost and revenue elements are classified
according to cost element groups

This type of CO-PA was introduced because accountants

complained about not being able to reconcile costing-based
CO-PA to the general ledger

Advantages and Disadvantages

Advantages
Disadvantages
Displayed according to G/L
You cannot break out cost of
Accounts so it is easier to
sales into their fixed and
reconcile to the General Ledger variable costs
As you can still report by
You cannot analyze variances
characteristics, it can also be
into their respective categories
compared with Costing based You cannot analyze cost of
CO-PA reports
sales according to cost
components

Data Flows into CO-PA

10

Data Flows into CO-PA (cont.)

Flow of Actuals in Profitability Analysis

Flow from the Sales and Distribution (SD) Module

Flow from the FI/MM direct postings

Settlement of Production Variances to PA

Flow from Project Systems

11

Transfer of Cost Components to PA

Flow from Cost Object Controlling

General Ledger Posting

MM Postings

Flow from the Product Costing

Flow from Billing Document

Settlement of Results Analysis to PA

Topics

Overview of costing and accounting-based CO-PA

How costing-based CO-PA ties to the General Ledger
Matching the cost-of-sales G/L account to CO-PA
Additional CO-PA reconciliation issues
Reposting documents in CO-PA only
Summary
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

12

Billing Document Postings

Sales Condition is Mapped to a Value Field

Sales Condition is also mapped to an account key

and subsequently a G/L Account

If a value field is not mapped to a sales condition,

the billing document is not passed to FI

13

Finance Postings

Finance transactions are assigned to a PA transfer structure

This PA transfer structure includes source and target objects
Source objects are cost elements (or groups)
Target objects are value fields
When posting a Finance document, click on the Prof.Seg. Arrow
and enter the characteristics

Click on Prof.Seg arrow to

enter the characteristics

14

Inventory Postings

15

G/L Accounts are assigned to relevant inventory transactions in

OBYC
These G/L Accounts are mapped to value fields in PA transfer
structure
Include G/L Accounts in automatic account assignment
transaction OKB9
Check the Profitability Segment box

Production Settlement

16

Settlement Structure for Production is assigned to a PA transfer

structure
PA transfer structure contains various assignments
These assignments have source and target objects
Source objects are the variance categories
The target objects are specific value fields

Project Systems Settlement

17

Results analysis line IDs are assigned to cost elements

Settlement Structure for Projects is assigned to a PA transfer
structure
PA transfer structure contains different assignments
These assignments have source and target objects
Source objects are the project systems cost elements
The target objects are specific value fields

Cost Center Assessments

18

Cost Centers (or groups) are entered as senders in

Assessments
CO-PA Characteristics are designated as receivers
Value fields to be posted to are assigned in these assessments
Normally used for expenses that are not part of cost of sales

Cost Components

19

Cost Components are set up to break out the standard cost into
its respective elements
Cost elements are assigned to these cost components
These cost components are assigned to value fields

Topics

Overview of costing and accounting-based CO-PA

How costing-based CO-PA ties to the General Ledger
Matching the cost-of-sales G/L account to CO-PA
Additional CO-PA reconciliation issues
Reposting documents in CO-PA only
Summary
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

20

Timing difference of Goods Issue

Transaction
Sales Order
Goods Issue
Billing Document

21

General Ledger
Not Updated*
Updated (COS)
Updated (Revenue)

CO-PA
Not Updated
Not Updated
Updated (COS &
Revenue)

* Note: CO-PA can be updated from sales orders if you activate

Transfer of Incoming Sales Orders

Copying Condition VPRS to ZPRS

22

You can copy condition VPRS to ZPRS in transaction V/06

Assign this condition to your pricing procedures (V/08)

Assigning Condition ZPRS to CO-PA Value field

Go to transaction KE4I
Assign Condition ZPRS to the Cost of Sales value field

23

You can overwrite the mapping of the current cost of sales

condition (which is normally VPRS but could be something
else) with condition ZPRS

Assigning Condition to an account Key

Create an account key ZPR using the menu path: Sales and
Distribution -> Basic Functions -> Account Assignment/Costing
-> Revenue Account Determination -> Define and Assign
Account Key
Assign this account key to the ZPRS condition in the pricing
procedure (transaction V/08)

Account key ZPR

assigned to condition
ZPRS
24

Configuring Shipped not Billed Account

25

Create Shipped Not Billed account in transaction FS00;

Make this account an Open Item managed Account with the
Only Bal. in Local Currency flag checked

Configuring Shipped not Billed Account (cont.)

Go to transaction OBYC, enter this account under transaction
Key GBB and Account Modification VAX

26

The cost of sales account would have previously been

configured in this setting. You need to overwrite that account
with the Shipped not Billed Account
This way, the Shipped not Billed account will be debited
during a Goods Issue transaction

Making Cost of Sales Account a Cost Element

27

Go to transaction KA01 and enter the cost of sales cost

element;
Enter a Cost Element Category of 12 Sales Deduction

Assign Account Key to G/L Accounts

Go to transaction VK0A and assign the account key ZPR to the

G/L Accounts Shipped not Billed and Cost of Goods Sold
This way, when you bill a customer, the Shipped not Billed
account will be credited and the Cost of Goods Sold will be
debited

Shipped not Billed

Account
28

Cost of Sales
Account

Topics

Overview of costing and accounting-based CO-PA

How costing-based CO-PA ties to the General Ledger
Matching the cost-of-sales G/L account to CO-PA
Additional CO-PA reconciliation issues
Reposting documents in CO-PA only
Summary
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

29

Stock Transport Order Variance Issue

30

A Stock Transport Order Variance which is posted using

transaction VL02N does not get posted to CO-PA
This is because this transaction is posted as a goods issue.
Goods Issues do not pass to CO-PA because they are expected
to be billed;
However, STOs are not billed, so there is a discrepancy
You need to apply SAPNote 1167439

Credit/Debit Memos with no Inventory Adjustments

31

Some credit/debit memos relate to price adjustments alone;

However, if you enter an inventory material number in them the
system will determine their standard cost
This means that a cost will be transferred to CO-PA even though
there has been no inventory movement
You may need to disable the VPRS condition for these type of
Credit/Debit Memos;
Alternatively, you can use a text material (which does not have
any standard cost)

Cost Element category for Sales Order Condition

32

Sales conditions that are mapped to value fields should be

assigned to the appropriate G/L Accounts
These G/L accounts are mapped to sales conditions through the
use of account keys
The G/L Accounts should be set up as cost elements with Cost
Element category 11 or 12

Making Production Variance Account a Cost Element

33

Variances are posted to CO-PA through the mapping of variance

categories to value fields
A variance G/L account is also posted to at the same time
(configured in transaction OBYC Transaction Key: PRD-PRF)
This G/L account should not be a cost element as this could
lead to a double-posting in CO-PA

Negative Discount Conditions

34

A negative sales condition (i.e. deduction from Revenue) shows

up in CO-PA as a negative number
However, Revenue shows up in CO-PA as a positive number
This means that if your CO-PA reports contain a formula that
deducts discounts from Sales, this will be a double negative
(hence an addition to sales);
If you therefore add these (negative) discounts to revenue, be
careful about FI generated discounts as they appear in COPA as
positive amounts;
The recommendation is to use different value fields for Sales
Condition Discounts which are negative and FI Generated
discounts which are positive

Work-in-process account

35

WIP account is posted to when an incomplete production order

s settled
In the G/L it is posted to a balance sheet and a P&L account
The P&L Account is not to be set up as a cost element
CO-PA is not updated with WIP postings, and hence there can
be an imbalance with the General Ledger

Cost Center Allocations not fully Absorbed

36

If you have created cost center assessments to CO-PA, these

need to be executed every month
This will ensure that all cost center costs eventually flow to COPA
You need to check all the cost centers at month end to ensure
that they are zeroed out

Posting in CO-PA without corresponding G/L entry

37

COPA-only postings can be made using transaction KE21N

However, if these postings are made without a corresponding FI
entry, then this can lead to an imbalance
These postings should only be used in emergency cases or
when a reconciliation issue needs to be fixed

Topics

Overview of costing and accounting-based CO-PA

How costing-based CO-PA ties to the General Ledger
Matching the cost-of-sales G/L account to CO-PA
Additional CO-PA reconciliation issues
Reposting documents in CO-PA only
Summary
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

38

Reasons for Making Manual CO-PA Postings

You can manually post documents to CO-PA only by using

transaction KE21N
This should only be used when it is too late to go back to the
source module to make the posting (e.g. when the period
closing for that module has been carried out)
Make sure that only certain users have access to this
transaction as it could lead to an imbalance with the general
ledger if not used correctly

Manual Posting to CO-PA

Enter a Record Type
and Posting Date in the
initial screen

Manual Posting to CO-PA (cont.)

Enter the relevant
characteristics and
value fields

Reasons CO-PA may not be Originally Updated

42

CO-PA was not set up when the finance posting was made
The cost element that was linked to the condition types
account key was not set up with Category 11 or 12
There was an incorrect mapping of an SD condition type to a
CO-PA Value field
A technical system error occurred which did not complete the
documents posting to CO-PA

Subsequent CO-PA Posting

Choose business
transaction and
document origin

43

You can restrict the selection by document number,

document, posting date or creation date

Subsequent CO-PA Posting (cont.)

You can also subsequently repost documents that originated from

the Sales and Distribution and Materials Management modules by
using transaction KE4S and KE4SMM respectively

Reasons for Reversing CO-PA Documents

You made the initial posting by using the CO-PA document

transaction KE21N
You made a CO-PA configuration change but it is too late to
reverse the source document, hence you need to cancel and
repost the CO-PA document alone
There is an external interface that was posted incorrectly into
CO-PA and needs to be corrected in SAP only

Displaying CO-PA Documents to be Deleted

You need to be specific about the data that you want to delete
otherwise you could delete a CO-PA document inadvertently
It is therefore advisable to display the CO-PA documents first
before carrying out the reversal
You can use transaction KE24 to display the CO-PA documents.

Using Transaction KE4S00

Minimum data that needs to be entered:

Operating Concern
Record Type
Company Code

Using Transaction KE4S00 (cont.)

When you execute the transaction you will get a log of the line
items read and cancelled:

Double-click on the relevant

line to see the document
numbers that have been
read or cancelled

Topics

Overview of costing and accounting-based CO-PA

How costing-based CO-PA ties to the General Ledger
Matching the cost-of-sales G/L account to CO-PA
Additional CO-PA reconciliation issues
Reposting documents in CO-PA only
Summary
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

49

Resources

50

Paul Ovigele, 100 Things You Should Know About Financial

Accounting with SAP (July 2011)
Provides little-known tips to optimize the Financial
Accounting module, including reconciling the general ledger
cost of sales account with CO-PA
http://help.sap.com/saphelp_erp60_sp/helpdata/en/7a/4c48c64a
0111d1894c0000e829fbbd/frameset.htmSAP
SAP Help website contains comprehensive information about
the CO-PA module including the various data flows from the
other modules such as the general ledger

Five Key Ideas

51

Costing-based CO-PA is more effective than Account-based COPA for cost of sales and variance analysis but is more difficult
to reconcile to the general ledger
Data flows into CO-PA from billing documents, general ledger
and inventory postings, production order and project systems
settlements, cost components and cost center assessments
Cost of sales are posted to the general ledger when the goods
are issued, but posted to CO-PA when a billing document is
created
A cost element that is linked to a sales condition which posts to
CO-PA should have a cost element category of 11 or 12
You can post documents to CO-PA only using transaction
KE21N

Questions

Now:
Ask questions now for immediate answers
Later:
Contact me at paul@ovigele.com

Q&A
52

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