Profitability Analysis (COPA) Controlling Module SAP is implemented in business but business users are not able to analyze the profitability & cost data from SAP for MIS reporting & contribution margin analysis. For all the day to day reporting and decision making entire data is being prepared by the MIS and costing team manually in excel files.
This type of working leads to following business threats:
- Entire responsibility of MIS reporting and preparation of costing data is concentrated only with one or two individuals.
- Knowledge transfer would not be smooth and systematic in case of temporary or permanent leave of person handling the MIS & Costing area.
- The entire working is based on the manual excel formulae in different excel files which may leads to several types of errors.
- Different types of simulation of information would not be possible in a timely manner to take quick management decision for a business deal.
AS-IS process analysis and expected reasons:
- SAP CO processes not configured appropriately as per the existing business requirements.
- Lack of training & understanding of business users on SAP costing process.
- Incorrect entry of data by users in the areas of finance, stores & production, i.e. selection of inappropriate cost centres and GL accounts for transaction postings.
- SAP Period end closing process not executed properly/regularly in system.
For further details and an in-depth guide, please download the PDF given below.
SAP system is in place for business requirement with respect to logistic and finance processes, however for costing and MIS purpose there is no information available in system. Business users need to collect required data from multiple sources in excel files for cost and profitability reporting purpose.
Consideration for solution designing:
- Processes & requirements of MIS, Budget & Costing section of business.
- Production process of business i.e. make to stock (MTS) or make to order (MTO)
- Production facility wise costing requirement.
- Market segment wise profitability analysis requirement.
- Designing of organization structure for SAP CO module.
- To meet the reporting levels of existing business.
- Cost centre accounting and Cost element accounting.
- Department wise cost centres would be created.
- All revenue GL accounts would be created as cost elements for reconciliation of finance & costing Profit/Loss accounts.
- Actual Product costing.
- Standard cost estimate based on the budgeted cost data.
- Collection of actual cost against actual production / services.
- Variance analysis between budget vs. Actual.
- Periodic Actual cost calculation.
- Annual/Half year/Quarter weighted average actual cost calculation for finished and semi finished materials.
- Profitability Analysis.
- Market segments wise profitability analysis segments created in system.
- Budgeted revenue & cost data will be uploaded in system- Actual revenue & cost data will flow based on actual sales.
- Reporting based on the budget vs actual.
- Preliminary study of the existing business process in terms of functional and technical aspects is required for preparation of “Preliminary Study Report”(PSR)
- Depending on the PSR following factors would be derived and documented as a part of “Final Study Report” (FSR).
- Feasibility of solution.
- Key performance indicators.
- Effort estimations & timelines.
- Broad solution approach document
- Depending on the broad solution approach document the agreed solution will be implemented by following the regular process of implementation ( i.e. blueprinting of requirement, realization & testing of solution in test system, final preparation for production system and GO Live in production system)
- Measurement of performance w.r.t. agreed KPIs as a part of “Business Value Realization Report” (BVRR)
For further details and correspondence, please send an inquiry to Infocost.