Configuring COGS Split in SAP S/4HANA

Overview

• Purpose: To split the Cost of Goods Sold (COGS) account into multiple line items based on cost components during a goods issue.
• Importance: Enhances visibility in Account-Based Profitability Analysis (KUPA).
• Applicable to: Variances of production and actual costing in material ledger.

Demonstration Item

• Material Master Data: Transaction code MM03
• Material Code: Display costing tool view (cost estimate).
• Cost Components include:
  • Raw Materials
  • Production Material Overhead
  • Production Overhead

Process Steps

Standard Case (Before Configuration)

1. Create Sales Order:
   • Transaction code VA01
   • Insert customer details and material (Material 506, quantity 5).
2. Post Outbound Delivery & Goods Issue:
   • Transaction code VL01N
   • Storage Location: AG 11
   • Post goods issue.
3. Display Financial Entry:
   • View Document Information in FI documents.
   • Standard Entry:
     • Debit: Inventory
     • Debit: COGS account
     • Credit: Inventory account
   • Result: Only one accounting document.

Configuration Steps

1. Access Configuration:
   • Path: SPRO > Financial Accounting > General Ledger > Periodic Processing > Integration with Material Management
2. Define Accounts for COGS Splitting:
   • Create splitting profile (e.g., AG01) for controlling area.
   • Assign source account (COGS account).
3. Define Strategy Sequence:
   • Define strategy for splitting based on cost estimate.
4. Define Target Accounts:
   • Assign accounts for each cost component (raw material, production, etc.).
5. Default Value:
   • Assign default for any unassigned cost components.
6. Define Offsetting Accounts:
   • Specify account to clear the COGS account.
7. Company Code Settings:
   • Activate splitting for the company code (e.g., AG).
   • Assign cost splitting profile (e.g., AG00) and save changes.

New Process Steps (After Configuration)

1. Create Another Sales Order:
   • Use same customer and material details.
2. Post Outbound Delivery & Goods Issue:
   • Transaction code VL01N
   • Post goods issue for quantity 3.
3. Display Financial Entry:
   • This time, two accounting documents will be generated:
     • First Document:
       • Standard entry (similar to previous).
     • Second Document:
       • Credit to the offsetting account.
       • Debit to different COGS split accounts (based on cost components).

Conclusion

• The configuration allows SAP to provide a detailed view of COGS split during goods issue.
• Helpful for enhanced financial reporting and analysis.