Difference Between Cost-Based COPA and Account-Based COPA

COPA is an acronym for Controlling – Profitability Analysis. COPA is the most commonly used functionality in SAP ERP to report profitability-related tasks and it sits as one of the main building blocks of the core business processes under Controlling in SAP.

SAP COPA takes into account all the costs that affect a company and classifies them by their popular categories.

Apart from the term ‘cost’ which directly refers to the financial aspect of it, SAP COPA also considers setting up business measurements and collection of relevant data in this process, making it one of the most important internals in SAP.

SAP cost-based (or costing-based) COPA and account-based COPA are the two approaches to the analysis of profitability and controlling the potential of a value chain. In this blog, we’ll cover the essential differences between both.

What is SAP account-based COPA?

SAP account-based COPA is the simplest and most widely used type of COPA. It is not integrated with Product Cost Controlling and does not require any allocation structures.

Account-based COPA is a more efficient way to assign data using the standard cost estimate rather than value fields. In account-based COPA, you use accounts to represent a business transaction.

It simplifies the creation of primary and secondary cost components. You don’t have to create separate value fields for different valuation approaches or for different ways that you analyze your business processes. Instead, you can group related accounts together as secondary cost components and then assign them to other accounts as primary cost components.

Account-based COPA eliminates the need for complex costing formulas in Product Cost Controlling (CO-PC). You no longer need extensive formulas to split costs between primary and secondary cost components because account-based COPA automatically creates these splits based on assignments and allocations.

What is SAP cost-based COPA?

Cost-based COPA is a relatively new COPA type introduced in SAP S/4HANA. The cost-based approach uses cost estimates/actual costs calculated by SAP ERP as the basis for profitability analysis. These costs are assigned to specific products using a cost estimate. When using this method, COPA relies on the information from Financial Accounting (FI), Materials Management (MM), Sales & Distribution (SD), and Controlling (CO).

With cost-based COPA in SAP ERP Financials, you can use actual or plan costs to conduct profitability analyses based on real-time or period end costs. You can also perform product cost planning using COPA as part of your monthly or annual financial planning or budgeting process.

The first important thing to know about costing-based COPA is that it creates two versions of profitability: one based on general ledger accounting and one based on cost accounting. The latter is what makes this option unique. For example, if you want to measure profit at the customer level, you can do so with both general ledger accounting and cost accounting. The same goes for product profitability and any other type of profitability you might be interested in.

What’s the difference?

Both these approaches have their own benefits and limitations. If you are planning to use account-based COPA, you do not need to create value fields in CE1* tables manually as they come by default. On the contrary, in cost-based COPA you need to create value fields manually.

Similarly, in cost-based COPA, you need to map value fields in CE1* tables to respective GL accounts manually by using the account assignment model. Whereas for account-based COPA, you need not do any manual mapping as these accounts are already assigned to Cost elements and there is no need for additional configuration.

Want to learn more?

Sign up for SAP S/4HANA Margin Analysis (CO-PA) program at Tekskilled. It is one of the most comprehensive SAP S4Hana Margin Analysis training courses, covering an array of topics. Learn about the difference between cost-based COPA and account-based COPA. Also, get an in-depth picture of COGS split in COPA, Fiori reports, predictive accounting using extension ledger, and more. Find out more about this SAP S4HANA Margin Analysis course here.

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