Production variance settlement to CO-PA (instead of Cost center)

[JavierIbanez]

In S4HC Public by standard the production variance settlement (PRD) is posted against a profitability segment (CO-PA), whose profit center corresponds to the one maintained in the material master of the product manufactured. 

In S4HANA on-premise, we could configure the settlement so that a cost center (we called it "technical prices") was the receiver of the production variances (PRD), and when CKMLCP is executed, the PRY postings are made against that cost center, and together with the rest of PRD posting and other ML operations (transaction keys), the balance was 0 at period-end closing. If there was any balance in any material due to non-assigned/distributed price differences, we could easily assess them to CO-PA using allocation cycles. 

However, in S4HC Public, since the production variance (PRD) is posted against a PSG, the remaining amount in the "technical prices" cost center corresponds to that production variances + if there are any non-allocated/distributed balances, so that no automatic CO-PA allocation can be done, forcing the client to do manual posting to CO-PA (substracting manually the production variances amount) and besides we fail to the premise that all cost centers must be cleared out at period-end closing so that FI and CO result is the same.

How are you dealing with this matter in other clients? Can I do some kind of substitution to change PSG to cost center? Could SAP release the custo point to change the settlement as in on-premise? 

Thanks. Regards,

[Chris1973 · Accepted solution]

Good day @JavierIbanez 

Thank you for your question.

Have a look at these references, they provide more detailed guidance.

Event-Based Reporting, Settlement Rules of Manufacturing Orders (Event-Based Posting Rules)

SAP Central Finance & Margin Analysis (new COPA), Cost Elements

Universal Allocation in SAP S/4HANA 2022, Universal Allocation

Answer to question 1: No, in public cloud Substitutions/settlement redirections for production variances to a cost center (like on-prem) are not supported. PRD --> CO-PA is what the system permits.

Answer to question 2: You can keep the technical prices cost center at zero without manual CO-PA JE by using Universal Allocation. The sender must equal the cost center, whilst excluding PRD G/Ls. Receiver must equal Profitability Segment. You have to schedule monthly. This yields automatic clearing and avoids double-counting PRD.

Answer to question 3: Today, this is not supported in public cloud due to its clean-core approach. If it is critical, i suggest you submit a request via the Customer Influence channel.

Here is a step by step guide.

Search Margin Analysis-Line Items -->

Filter by G/L Account (PRD accounts & Posting Period) --> Confirm entries show Profitability Segment (PSG)

To confirm which G/Ls are PRD vs. non-PRD on your technical prices cost center, go to Display Line Items in General Ledger --> Filter Cost center= technical prices, Period, and G/L range involved. Identify which G/Ls are PRD and which are other ML/price-diff balances you need to allocate. Exclude PRD G/Ls from the allocation sender selection.

Ensure you have a secondary cost element for allocation. Open Manage G/L Account Master Data --> create or check a G/L type to be used by Universal Allocation.

Thereafter, Open Manage Allocation to defined Universal Allocation --> Create Cycle à Category= Overhead Allocation or Assessment. Segment-Sender: Sender Object= Cost Center. Sender Filter on G/L Account= include non PRD G/Ls only. Segment-Receiver: Receiver Object= Profitability Segment (Use your CO-PA characteristics). Tracing Factor: choose an appropriate basis. Allocation Cost Element: choose the secondary cost element from previous step. The purpose is to automate clearing of non-PRD balances from the CC to CO-PA, leaving the CC at zero without touching the PRD again.

Test Run the cycle for the period, if correct then execute productive run. Review the Allocation Results link. This confirms postings clear the cost center and flow to CO-PA automatically

Next is to validate the technical prices. Open Cost Center-Actuals and filter the CC and period after the run.

Finally, you need to schedule each period. Open Manage Allocation, schedule your cycle monthly. This avoids manual postings by keeping FI and CO reconciled period-end.

Let me know if you have further questions.

Best regards

Chris

[JavierIbanez · Accepted solution]

Hi Chris,

[JavierIbanez · Accepted solution]

Thanks Chris for your detailed answer