Everything you need to know about CO-PA and its Applications

In this article, we shall understand CO-PA and its important features in SAP Business Warehouse.

A drill down report which allows slice and dice multidimensional sales profitability analysis is called as Costing and Profitability Analysis (CO-PA).

This helps in analysing different characteristics or segments such as product, market, customer, product hierarchy, market and profit center. Customer master or material master is the standard SAP functionalities which fills most of the characteristics.

In SAP BW 7.0, enables you to evaluate market segments which are classified into various strategic business units such as sales organization, products and customers.

The main aim of the CO-PA is to support internal accounting and decision-marketing by providing sales, marketing, product management and corporate planning as well.

We have two forms of Profitability Analysis are supported namely:

• Costing-based Profitability Analysis classifies costs and revenues according to value fields and valuation approaches. It provides an access to complete, short-term profitability report at all time.
• Account-based profitability Analysis organizes accounts and uses accounting-based valuation approach.
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  The main characteristic is it uses cost and revenue elements. In this approach, the report is permanently acquiescent to financial accounting.

Before we learn applications of CO-PA, let’s understand the features of CO-PA.

Features of CO-PA

The following are the important features of CO-PA:

• Master Data

You can define the basic structures in the form of master data in profitability analysis. Using this, you can evaluate characteristics and the categories for values. The value-fields are used to store data for analysis in costing-based CO-PA whereas; the values are structured by account in account-based CO-PA.

Either using SAP master data or CO-PA derivation rules, additional characteristics can be derived based on the manual primary transactions. Multidimensional profitability segment is formed by combination of characteristics and used in analysing profitability by comparing costs and revenues.

• Actual Postings

These postings are the most important source of information. In real-time, you can transfer both sales orders and billing documents from the sales and distribution application component. In addition to this, you can also transfer external data from R3 systems and also transfer costs from cost centers, orders and projects.

In costing-based CO-PA, you can evaluate sales orders to automatically detect sales deductions or costs.

• Information system

It lets you analyse existing data interactively from a profitability standpoint using the features of CO-PA tool. Using drilldown or switching functionalities, you can navigate through datacubes. Depending on the active type of profitability Analysis, the system displays data in value fields or accounts and also shows to which report structure it is assigned.

Applications

Profitability Analysis and Profit-Center Accounting are the two important applications which offer effective tools for analysing organization’s profitability. Let us see each application in brief:

• Profitability Analysis allows you to evaluate profitability in market segments and organizational units such as business areas and company codes. The important goal is to offer decision support from Market-oriented viewpoint.

This application is used in any branches such as wholesale, retail, chemical, mechanical and service industries with any form of production of an organization.

The data can be evaluated periodically based on the order or project.

• Profit-Center Accounting evaluates internal profit and loss of profit centers. This also allows analysing and evaluating different units within the company. The structuring of profit centers can be done according to function, region and product. It is one of the components in Module Enterprise Controlling.

This application is used in any branches such as wholesale, retail, chemical, mechanical and service industries with any form of production of an organization. In this application, profit-relevant data is displayed periodically.

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