Use of Settlement Management and Combined CO-PA for

Gross-to-Net Revenue Analysis

V I J AY PA L , Senior Consultant, Clarkston Consulting
V I C S I S O N , Director, Clarkston Consulting
Session ID # 84230

May 7 – 9, 2019
About the Speakers
V I J AY PA L VIC SISON
• Senior Consultant, Clarkston • Director, Clarkston
Consulting Consulting
• Order-to-Cash Process Lead • Over 20 years SAP Finance
• First time ASUG Attendee and Controlling Experience
• Former NBA Draft Pick
 About Clarkston Consulting
Leading Partnership
management and Serving global model, organically
technology companies grown, and
consulting firm since 1991 privately held

Headquarters in Research Triangle Focused on the life sciences and Success measured by client and
Park, NC, with offices across the U.S. consumer products industries employee satisfaction

KE Y ME A SURE S OF
C L A R K S T ON ’S S U C C E S S :
70% repeat clients and referrals

18-year average client satisfaction rating of 97%*

* As measured by:
Key Outcomes/Objectives
Settlement Management is the key solution within S/4 HANA to
handle subsequent settlement of Customer and Vendor rebates.
Condition Contract Management provides a central, standardized
solution for administration of supplier and customer conditions.
Accruals can be calculated and posted as a statistical condition in
an Extension Ledger in FI.
Pricing conditions can be mapped to value fields in Combined CO-
PA to provide detailed Gross-to-Net Revenue analysis.
Agenda

CONDITION
SETTLEMENT COMBINED
CONTRACT
MANAGEMENT PROCESS C O - PA

EXTENSION GROSS-TO-NET
LEDGER A N A LY S I S
Settlement Management
Settlement Management functionality supports all types of settlement processes, including core
business processes that need to be fully integrated in the OTC cycle or within in a PTP scenario, such
as condition contract settlement (rebate settlement), as well as standalone processes, whereby you
provide special financial settlement services for your business partners.

Significantly Enhanced Functionality (SAP Settlement Management) for S/4HANA Sales and Procurement

More Flexibility as Rebate Index needs not to be rebuilt when new customers become eligible for
rebates and previous business can be retroactively considered.

Significantly reduced data footprint and memory

Settlement Management is part of S/4 Core, No additional activation is required.

 Condition Contract Process
C U S TO M I Z AT I O N
Split Criteria’s Header and Item Level | Condition and Scale Base
Business Volume Table | Transfer Rules for Document creation
Detailed Statement
Settlement Calendar
Settlement Information

SETTLEMENT PROGRAM
CONDITION SETTLEMENT
Business Volume Determination | Calculation via Pricing
CONTRACT DOCUMENTS
Settlement Document creation

Document Collection
Business Volume
Output | FI/CO
Selection Criteria
Messaging

D ATA S O U R C E
Sales Orders | Purchase Orders | Deliveries | Invoices | Goods Movements
Settlement Management Documents | External Systems | POS Data
Condition Contract – Sales Process
M A I N TA I N SALES DOCUMENT
RELEASE
CONTRACTS PROCESS SETTLEMENT

▪ Condition Contract ▪ Condition Contract ▪ Sales Order ▪ Partial Settlement

Type Type ▪ Outbound Delivery ▪ Final Settlement
▪ Customer Data ▪ Customer Data ▪ Post Good issue ▪ Delta Settlement
▪ Organizational Data ▪ Organizational Data ▪ Create Billing ▪ Delta Accruals
▪ Business Volume ▪ Business Volume Document
▪ Settlement Calendar ▪ Settlement Calendar
▪ Select condition ▪ Select condition

CONTROL

▪ Monitor Contracts, Conditions, Settlement Calendars, Business Volume, Settlement Documents

Condition Contract
EXAMPLE
Business Volume for Condition Contracts
 FIORI APPs for Condition Contracts Example
FIORI APP GUI TRANSACTION CODE ROLE(S)
Maintain Contracts WCOCO Contract Manager/Sales Manager/Purchasing
Manager
Display Business Volume WB2R_BUSVOL Settlement Clerk/Purchaser/Billing Clerk

Settle Condition Contracts WB2R_SC Settlement Clerk/Billing Clerk

(Customer)
Settle Condition Contracts WB2R_SV Settlement Clerk/Purchaser
(Vendor)
Display Settlement WB2R_AB_DOCS Settlement Clerk/Purchaser/Billing Clerk
Documents
Display Contracts WCOCOALL Sales Manager/Purchasing Manager/Contract
Manager
 Cost and Profitability Analysis (CO-PA)

PRODUCT

P US P R O F I TA B I L I T Y
C SEGMENT

FIGURE 1
An example of a multidimensional profitability segment
 CO-PA Value Flows
Settlement of production variances
FINANCIAL
ACCOUNTING PRODUCTION

PP SALES P R O F I TA B I L I T Y
A N A LY S I S
MM SD Billing doc.
PRODUCT CO-
COSTING PA
CO- Cost of goods manufactured
PC
FI CO-
OVERHEAD
OM Cost center assessment
MANAGEMENT
Variance settlement
Direct postings from Financial Accounting
 Combined CO-PA Data Structure
DOCUMENT HEADER
FIGURE 2
Profitability Document Posting Material
Article Document structure in combined CO-PA
Segment number date group

ACCOUNTING DOCUMENT
General
Document Currency Company
ledger (G/L) Value Currency
number type code
account

VA L U E F I E L D S E G M E N T
Profitability Currency Value
Value Currency
Segment type field

QUANTITY SEGMENT
Document Quantity Sales Unit of
G/L account
number view quantity measure
Combined CO-PA Example
Combined CO-PA Prerequisites
• S4CORE Level SP1 or above
• Implement SAP Note 2370683
(SAP S/4 HANA Finance 1610 or higher version)
Extension Ledger
Gross To Net Analysis Forecast
(LEADING LEDGER)

CURRENT PRIOR CURRENT

ACCOUNT
PERIOD PERIODS BALANCE
Gross Revenue 100

Rebates and Chargebacks (20) (5) (25)

Prompt Pay Discounts (2) - (2)

Allowances for Sales Returns (1) - (1)

Distributor Fees (5) - (5)

Net Revenue 67
Gross To Net Analysis Forecast
(EXTENSION LEDGER)

FUTURE PRIOR FUTURE

ACCOUNT
PERIOD PERIODS BALANCE
Gross Revenue 110

Rebates and Chargebacks (22) (5) (27)

Accrued

Prompt Pay Discounts (2) - (2)

Allowances for Sales Returns (1) - (1)

Distributor Fees (5) - (5)

Net Revenue 75
Key SAP Notes
• 1955893 - cPA: The combined profitability
analysis
• 2344093 - cPA: Combined profitability analysis -
implementation guide
• 2635566 - FAQ on Combined Profitability Analysis
(cPA)
 Q&A
For questions after this session, contact us at
[email protected] and
[email protected] or at
Booth #1234 Clarkston Consulting.
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Access the slides from 2019 ASUG Annual Conference here:
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