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Analyzing Incoming Sales Orders in Margin Analysis

Objective

After completing this lesson, you will be able to analyze Incoming Sales Orders in Margin Analysis

The Profitability Segment in the Sales Order Item

In a Make-to-Order Scenario form CO Perspective the customer order is integrated with margin analysis. This can be checked by selecting the account assignment of the customer order item, which is explained in the next lesson. The relationships shown in the previous explanations to the settings regarding the requirement type and the associated requirement class also specify that the manufactured product quantity is managed as valued inventory. This is the standard. In this case, the production variances are calculated in the production order, which can be settled to the margin analysis. The settings also mean that the inventory is not managed with the inventory type unrestricted use - but as customer order inventory.

As the following figure shows, the customer order item is assigned to the margin analysis. The result object according to the characteristic derivation can be analyzed in the detailed view, as the following figures show.

If no other assignments to controlling objects, e.g., work breakdown structure element, are set in the settings for the product and thus also for the sales order item and the profit and loss statement is activated, the sales order item is automatically assigned to the margin analysis as an account assignment.

The two following figures show the result object for the sales order item with the derived characteristics for the product such as material group or for the customer such as billing type (F2) or material group (L004).

The Extension Ledger

Predictive accounting shows the impact of future sales on accounting, starting right when a sales order is created and before any journal entries are posted to the general ledger. Predictive journal entries are created in a special prediction ledger. This ledger allows you to see the possible impact on your margin of future goods issues and billing before the actual transactions take place.

SAP S/4HANA uses an extension ledger in accounting to store the values coming from incoming sales orders. Normally, a sales order doesn’t update accounting. The first actual accounting entry is at the time of the goods issue. However, with the incoming sales order functionality, sales orders post entries to the extension ledger.

The Extension Ledger in Margin Analysis

For margin analysis to store predictive data in SAP S/4HANA, you need an extension ledger (for more details see here.). An extension ledger sits on top of a standard ledger.

The extension ledger is an add-on ledger that uses a delta logic. For example, if you have defined the extension ledger 0E with the leading ledger 0L as the reference ledger:

When you post a document to the 0L, it is not posted in 0E. Likewise, when you post a document to the extension ledger EL, it isn’t posted in 0L.
When you run a P&L and balance sheet report for 0L, you only see the figures posted to 0L. However, when you run a P&L and balance sheet report for extension ledger 0E, you see both postings from the reference ledger 0L and extension ledger EL.

Reporting Incoming Sales Order in Margin Analysis

Incoming Sales Orders in Margin Analysis

Predictive accounting enables you to look at and analyze data using a forecast of future results based on the most up-to-date data. It enables you to have a better understanding of what your results are at the end of the current period or quarter, and why.

When a sales order is created, predictive accounting simulates the corresponding goods issue and invoice. The results of the simulation are stored as journal entries in an extension ledger. The postings in the extension ledger, along with the current data from the underlying base ledger, enable you to see a forecast, for example, of the revenue for one product. You can also see a report on all line items of one product. You can display and analyze the data in detail but also at a higher level, for example, in a financial statement.

Note

Classic Report Painter reports can't be selected from the extension ledger. CDS-based reporting is required.

Data in predictive accounting is processed as follows:

When a sales order is created, predictive accounting checks if delivery and invoicing is possible.
The system simulates follow-on processes and creates the journal entries in financial accounting accordingly.
Subsequent financial processes such as revenue recognition and the splitting of costs of goods sold are also triggered. All corresponding documents are displayed in the system as if they were real data. The documents can be identified by a prefix.
The simulated data is available in reports, and you can see and analyze it in your financial statements by selecting the extension ledger as the source.

The following figure provides an overview of the existing customer orders. The previously created customer order with order number 92 is displayed in the "Open Sales Orders" area. You can also navigate to it by double-clicking.

From the MY SALES OVERVIEW analysis you can navigate directly to the customer order.

Incoming Sales Orders - Flexible Analysis

The sales orders are updated in an extension ledger in the universal journal. You can navigate to all corresponding objects like line items, sales orders, etc.

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