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Split of COGS accounts in S/4 HANA

Former Member
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Hi HANA experts,

When splitting COGS accounts for account based CO-PA, do the accounts have to be primary GL accounts, or can they be secondary GL accounts? My client wants do COS analysis as per traditional costing based CO-PA, and we are trying to understand how this might work in account based CO-PA without having a cumbersome Chart of Accounts. e.g. they do not want to duplicate labour salary GL accounts in both COS and Overheads sections of the P&L (for different types of labour).

I'm thinking secondary GL accounts can be used to help reflect actual salary costs in the right section of their P&L, depending on the focus of their management reporting. e.g. some people just manage the budget of a cost centre, and others want to understand the performance of the business activities. In other words, COS is only relevant to some parts of the business, but for other people a salary cost is a cost regardless of it being direct or indirect, and so multiple GL accounts for the same thing should be avoided.

any advice welcome.

Thanks

Accepted Solutions (1)

Accepted Solutions (1)

ajaycwa1981
Active Contributor

Hi Samir

It will have to be a Primary GL, Ofcourse

Instead of COGS (GBBVAX) you can map the New COGS accounts in your FSV or map both of them at the same place

That should not duplicate anythinig in any way. The purpose of these accounts is to provide you a split

Ajay M

Former Member
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Thanks Ajay. so i understand it has to be primary GL's that is fine and that the COGS a/c can be any account you choose in the GL.

to follow a scenario though (on AB CO-PA):

  1. COS labour posted at std cost on COS a/c through the SD processes $100
  2. actual labour posted via payroll to employee home cost centre e.g. to basic pay, tax, pension etc GL a/c's total $110
  3. reconcile actuals to std to provide variance and split direct from indirect labour

In one set of reporting, the business only needs to understand labour at the employee home cost centre level, (and this is posted via the payroll jnl) there is no desire to understand COS, admin costs etc. In other reporting, the business wants to understand how much labour has been used for direct purposes and the variance to stds (Stds captured via CO-PA, and then reconciled to the actual payroll)

how can you do this reconciliation in AB CO-PA without repeating pension, tax accounts etc in two sections of the P&L. i was hoping secondary GL's could be use to reflect such adjustments between actual costs and std costs, and then the different FSV's can select accounts accordingly for specific reporting requirements.

thanks

ajaycwa1981
Active Contributor
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Hi Samir

Just like COGS Split, you can also use separate GL accounts for Variance Split

What you are talking about are two separate analyses

COGS Split helps you do margin analyses in a better way.

You would always have a variance on every cost component like Raw Material, Labor, etc

SFIN allows you to specify a Different GL account per variance category as well

Ajay M

Former Member
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Thanks Ajay. I don't think i am explaining my query very well. i know why we have COGS. I'm just trying to follow how postings are made between actual costs and std costs and then the alignment of the two.

In my clients scenario, CB CO-PA would logically allow a simple GL and CO-PA for everything else. I'm trying to quantify the impact on the CoA if we use AB CO-PA which is the logical recommendation now. For my client the biggest impact would be having to build COS section into CoA. I want to understand the requirements to and to consider the correct level of CoA requirements to meet all the reporting needs, and where to use primary or secondary GLs.

but i know now that primary GL's are required for the COGS accounts, so that is a start.

Thanks

ajaycwa1981
Active Contributor
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Hi Samir

In terms of GL accounts impact on CoA

1. You need new GLs for COGS Split

2. For Variance Split

3. All your Secondary CEs will start reflecting in your FSV

Your COPA VFs will be replaced by Secondary cost elements in the analyses. But the procedure of analysis (The framework) should remain same

Ajay M

Former Member
0 Kudos

thanks Ajay

Answers (1)

Answers (1)

sanilbhandari
Product and Topic Expert
Product and Topic Expert

Hi Samir

There is no concept of secondary cost element in S/4 HANA Finance. You need to create such cost elements as P&L Accounts. The accounting entry which will happen at the time of PGI will be as under:

COGS A/c Dr

COGS GL 1 Dr

COGS GL 2 Dr

         To Stock

         To COGS A/c

All the functionality of COGS split active in Costing Based COPA also works the same way in S/4 HANA Finance, so you can decide if you want to use CB COPA or AB COPA. Use of AB COPA is optional in S/4 HANA Finance

regards


Sanil Bhandari