COPA Top-Down Distribution using the new Fiori app "Manage Allocations"

 A few months ago, I started working on a client business requirement to do Allocations in Margin Analysis (formerly known as COPA or Profitability Analysis) to allocate certain overhead costs using the COPA Top-Down Distribution functionality. I worked with it several times in the past with the old KE28 and lately with the new "Universal Allocation" functionality using the new Fiori App "Manage Allocations".

The business requirement that I had was a bit unique that I did not know if it was even possible to achieve it. Finally I was able to make it work, so I decided to make a post out of it since, as usual, I like to post things that I did not find on the Internet so the community can benefit from it.

We will start from the beginning with a bit of details about it ...

As a previous step for this Top-Down Distribution Allocation (TDD), we did a Margin Analysis - Overhead Allocation from Cost Centers into a high level Profitability Segment like Company Code and Profit Center using an Assessment Allocation Cost Elements (In our case, an account starting with 942xxx). Once we had executed this Overhead Allocation, that will leave us the postings in a high level Profitability Segment that will then be picked up by the TDD.

The TDD will spread (re-post) the values on a proportional basis based on Ex. Sales Qty (KG in our case). This reposting is done within the same Allocation Cost Element / GL Account (Ex.  94200200 – Distribution Costs). At the end resulting in a reclass within the same account. So, each Sale transaction record will be used to have its proportional / fair share of those Overhead costs being allocated.

We had 2 different type of business requirement that we can summarize like this.

 2 different types of TDD,

• Simple (Cost from Cost Center are Allocated / Spread based on the Sales of the same Company / Legal Entity)

• Complex (Cost from Cost Center reside on Legal Entity A but are Allocated / Spread based on the Sales of the Legal Entity B)

Note: the term Simple and Complex are not SAP terms.

The Complex TDD was the one that was quite unique and the 1st time I faced such a requirement, so I was not even sure it was possible nor I was able to find anything online that would indicate that. Thus, the reason for my Blog today.

Simple TDD

This is how we will build a TDD Allocation cycle for a "simple TDD".

Will create the Cycle with code, description and a Valid to date.

A TDD Cycle can only have 1 Segment, different to the other types of Allocations that allow for multiple segments.

Based on “posted amounts” (actuals) and variable proportions.

Senders we leave it as-is, no changes required.

Here we need just a few dimensions, not all the ones available for Sender Basis. So, we will need to remove a few of them and leave the ones above.

Account number: We will use the specific group called TTD_CE created for this that contains all our Allocation Cost Elements type 42, since we used more than one Assessment account starting with 942xxx. By doing a group, we can re-use it for other cycles easily and we don't need to enter all accounts manually.

Our Company Code is 1000.

Remember ... prior to this, we had our postings already done at a high Level Company Code and Profit Center.

Receiver we leave it as-is.

This is where we will match the “Sender” data with the “Reference data” (our Sales).

Variable Portion Type: QUANT1 – Quantity 1, so based on our Sales Qty.

Profit Center: ALL VALUES , to take into account all Profit Centers

Same for Functional Area and Segment.

Account Number: will put our Sales Account. In our example 41000009

Now at the far right, each Selection Criteria characteristic has an icon that we need to click to expand our input for the "Reference Base" (Our Sales data matching).

Profit Center Mapping, we need to do a 1:1 for all Profit Centers involved on the Sender and Reference side.

 

For Accounts, we will map every account that is part of the TDD_CE against our Revenue account (like above)

If we have more than 1 Revenue Account, then we can create an Account group that will include the several revenue Accounts. This will be used in the “Selection Criteria” and in the “Reference Base Mapping”.

Company Code 1:1 

Functional Area, Segment, etc. ALL to ALL.

Complex TDD

In the “complex TDD” scenario, we want to Allocate (spread) the Expenses / Costs of one CoCode, but based on the Sales of another CoCode. Ex. Allocate Compay Code A Expenses, but based on Company Code B Sales.

 

The creation of the Cycle is the same as before for simple TDD scenario, with minor tweaks.

Sender Basis in this case is for the Expenses of Company code 2000.

Receivers stay the same.

Receiver Basis stay the same as in the Simple TDD scenario, being the Company Code 1000 (the one with the Sales).

With this Reference Base Mapping setup 2000 Sender and 1000 Reference Data, we are telling the Allocation to use the Costs of Company Code 2000 and reference it with the Sales of 1000. Just this little tweak in the Reference Base Mapping is key for this cross Company Code Reference Data to work.

Note: the Allocation postings will still remain in the same Legal Entity / Company Code, in our case 2000 and will not be generating any Cross Company Code postings. It is just for the reference calculation the Cross Company Code specification.

All the other Reference Base mapping still apply the same as in the Simple TDD scenario. The only one that is different is the Company Code one (like above).

Note: Margin Analysis Top-Down Distribution Cycles CANNOT be downloaded and/or uploaded using an XLS Template like the other Allocation Cycles. Instead, they will have to be created manually in each environment (Ex. QA and PROD). But, once 1 Cycle is created, a COPY function is available and then you can modify the parameters for that cycle accelerating the creation.

If your Company and/or Project needs to implement this, or any of the functionalities described in my Blog, or need advise about them, do not hesitate to reach out to me and I will be happy to provide you my services.

www.dnabusinessconsulting.com