In SAP S/4HANA, the profit and loss statement on the one hand and the market segment analysis for operating profit on the other hand are output using data from the universal journal. We will go over the advantages and options that result from this unified architecture.
Profitability analysis enables you to analyze profit or contribution margins by market segment or by strategic business unit (such as a sales organization or business area). Your market segments can be classified according to products, customers, orders, or any combination. Profitability analysis provides sales, marketing, product management, and corporate planning departments with information to support internal accounting and decision-making.
With margin analysis, any revenue postings or cost of goods sold postings are updated under the relevant account and assigned to the correct market segment characteristics. With the margin analysis functions, cost and revenue information are always current and 100% reconciled with the income statement. This ensures greater transparency and makes the information easy to use. Transparency is achieved by means of journal entries, which represent the single source of truth for financial data. Profitability reporting is based on income statement items, allowing you to drilldown on any characteristic, such as, the product.
Advantages of margin analysis:
- Consistent data between CO and FI through the universal journal
- All innovations to the universal journal are automatically available for margin analysis
- Sharing of ledgers, currencies, valuations
- Each posting in accounting is immediately enriched with the profitability characteristic. Reports for analysis are available at any time during the fiscal period.
- Flexible reporting using CDS-based query
Margin analysis enables you to analyze profit and contribution margins by market segment or strategic business unit, such as a sales organization or business area. You can analyze contribution margins for individual products and monitor the profitability of project-based services you provide to your clients. You can also see unbilled project costs and revenues.
Cost and revenue information is always current and fully reconciled with the income statement.