All About Sales Orders – Excerpt from Value Flows into SAP ERP FI, CO, and CO-PA

Excerpt from Value Flows into SAP ERP FI, CO, and CO-PA by Christoph Theis and Stefan Eifler.

The sales order
Let’s assume that our competitive product is known on the market and is enjoying a certain level of demand. Where does the business sequence begin in a logistical sales and production process? Correct: based on an inquiry, an offer, and potentially sales negotiations, the customer places a sales order which we want to enter and process in our SAP ERP system.
What happens in this process in an integrated system? The sales order is initially processed in the SAP module Sales and Distribution (SD). The main objective here is to create a sales order in the SAP system, to print it out where applicable, and to send an order confirmation to the customer. Other interesting things also take place which are relevant for accounting: on the one hand there is a price calculation for the product to be sold, and when we save the sales order, line items are written to Profitability Analysis (CO-PA) and we can use these line items for sales order controlling. However, the sales order does not yet trigger any postings in the balance sheet or profit and loss statement! Nevertheless, it does set the course for the subsequent posting of the invoice in Finance (FI) and Controlling (CO).

Therefore, in this chapter, we want to address the following important points:
– How does the SAP system find the prices and conditions relevant for the sales order and how does it use these to calculate the price?
– In terms of time, how far apart are the sales order and the subsequent invoicing? The answer to this question influences whether we transfer sales order data to CO-PA now or when we issue the invoice.
– Do we want to collect revenues and costs on our sales orders to then settle them to CO-PA later, for example, or do we transfer the revenues, discounts, and rebates as well as the costing based material and production costs to CO-PA directly?

The interface of the SD module is the most important for transferring data to
CO-PA. This is not surprising because CO-PA was designed as a sales controlling tool for transferring sales order data and then later the corresponding invoice data to CO-PA.

However, not every company transfers sales order data to CO-PA; many transfer only invoice data from SD to CO-PA. For companies where there is a long period of time between receipt of the sales order and invoicing, the recommendation is to also transfer the sales order data. There are two arguments in favor of this: on the one hand, the incoming order already shows how the business situation of your company will develop. On the other hand, you can use the sales order data to build up orders on hand reporting in COPA. When you have subsequently also transferred the invoice data, by subtracting
the sales order data and invoice data, you can report the orders on hand in reporting for CO-PA — and for all characteristics that you also transfer to CO-PA with the sales order or the invoice.

If you configure the Customizing for your sales orders such that the orders are not collectors for revenues and costs, you can even subsequently transfer your invoice data to CO-PA in real time. If this were not the case, the invoice would first return the data to the sales order and you would then have to settle this order to CO-PA. Depending on how often you undertake such settlement, this can potentially delay important findings in sales controlling because the required information is provided too late.

Keep reading in Value Flows into SAP ERP FI, CO, and CO-PA by Christoph Theis and Stefan Eifler.

Many companies struggle with reconciliation between SAP FI and SAP CO-PA in order to generate reliable and actionable reporting results. This book explores value flows into SAP Profitability Analysis (CO-PA) in depth, along with integration with the SAP ERP system.

Authors Stefan Eifler and Christoph Theis are leading SAP CO-PA subject matter experts. They walk readers step by step through a SAP value flow—from the customer order to production, goods issue to the billing document, and how to display the values in FI/CO. Obtain perspective on business and technical functionality and considerations.
The book also makes the case for using SAP CO-PA as a sales control tool in order to allow for a wider range of business analysis. Explore an overview of SAP S/4HANA Finance and its impact on CO-PA:

– Value flows based on the sales and production processes
– Reconciliation between FI and CO-PA
– Overhead costs and closing tasks
– Overview of SAP S/4 HANA Finance