- SAP Managed Tags:
Introduction
Many of my customers seek to understand the backend logic of cost of goods sold (COGS) in SAP S/4HANA Cloud, public edition. The COGS represents the total cost of producing goods and is an essential aspect of business accounting. However, various purposes require breaking down COGS into its constituent components for profit reporting. In this article, we will explore how to define settings for posting COGS details to different G/L accounts based on cost components from the referenced material cost estimate, standard cost estimate, or actual costing.
Utilizing SAP's Cost Splitting Profile
SAP offers a cost splitting profile (0YA000) that enables you to adapt it to your specific requirements. This profile provides configuration options to help you efficiently split COGS into different accounts based on various cost components in the underlying costing sheet.
Configuration Settings
You can adapt the profile through configuration activity, Define Accounts for Splitting the Cost of Goods Sold.
Configuration Activity - Define Accounts for Splitting the Cost of Goods Sold
The configuration process involves a series of activities:
1. Source Accounts: Identify the COGS accounts for which the cost component split should be performed. All postings to these accounts qualify for splitting costs.
2. Strategy Sequence: For each source account, establish a priority sequence of strategies to serve as the basis for the split. The system will attempt to split COGS based on the first priority in the sequence and move on to the next strategy if necessary.
The following strategy types are available:
1. Released Cost Estimates
2. Upcoming Released Cost Estimates
3. Current Standard Cost Estimate
4. Future Standard Cost Estimate
5. Cost Component Split from Actual Costing (ML)
If you use actual costing and have chosen strategy type 5, select "Split Revalued Consumption with Actual Cost Component Split" under Source Accounts.
3. Target Accounts: Define accounts for detailed postings of cost components in the relevant cost component structure and designate one as the default account. Amounts with no specified target account will be aggregated and posted to the default account.
Prerequisites: A suitable cost component structure is required for COGS splitting.
4. Company Code Settings: Assign cost splitting profiles to company codes or remove assignments if you don't want COGS split postings for specific company codes.
Example Scenario
Consider an example where you have defined account 54083000 as the COGS account (transaction key GBB). For a goods issue with an amount of 301.65 EUR, a journal entry is created using this account:
By applying cost component split settings, an additional journal entry can be created that credits the COGS account and debits target accounts proportionally based on material cost estimates:
Conclusion
By utilizing SAP's cost splitting profile and configuration settings, businesses can efficiently split the costs of goods sold into different accounts based on relevant cost components. This process provides detailed accounting information for reporting purposes, leading to better decision-making and financial management within a company.
More Information on SAP S/4HANA Cloud, Public Edition:
- SAP S/4HANA Cloud, public edition, release info here
- Product videos on our SAP S/4HANA Cloud, public edition and SAP S/4HANA YouTube playlist
- SAP S/4HANA PSCC Digital Enablement Wheel here
- Early Release Webinar Series here
- Inside SAP S/4HANA Podcast here
- openSAP Microlearnings for SAP S/4HANA here
- Best practices for SAP S/4HANA Cloud, public edition, here
- SAP S/4HANA Cloud, public edition, Community: here
- Feature Scope Description here
- What’s New here
- Help Portal Product Page here
- SAP S/4HANA Cloud ABAP Environment Community here
1 Comment
