SAP S/4 HANA 1809 Finance COGS Split

SAP S/4 HANA 1809 – COGS Split

A) Concept: Note 2399030 (Splitting the costs of goods sold in S/4HANA) says
1) COGS Split has been introduced from ‘sFin1.0’
2) Generally, Cost of Goods Sold (COGS) during PGI in a Sales Order is posted
to a single GL account as defined in FI-MM integration for that material
movement.
Dr COGS Account
Cr Inventory Account

3) So, with COGS Split functionality, 2 Accounting entries get generated as

below
1st Entry:
Dr COGS Split Clearing Account 100
Cr Inventory Account 100
2nd Entry:
Dr COGS Direct Material 50
Dr COGS Direct Labor 20
Dr COGS Production Overhead 30
Cr COGS Split Clearing Account 100

B) Configuration:
Path SPRO/Financial Accounting/GL Accounting/Master Data/Periodic
Processing/Integration/Materials Management/Define Accounts
for Splitting the Cost of Goods Sold
Tcode NA

B.1) Create Cost Splitting Profile: Create Cost Splitting Profile (‘New Entries’) in
the combination of Controlling Area & Chart of accounts

LinkedIn: CMA Ramesh Kolluru Page 1 | 9

SAP S/4 HANA 1809 Finance COGS Split

B.2) Maintain ‘Source Accounts & Valuation Views’: Create required new entries
for selected ‘Source Account’ (here, for our COGS Clearing Account) with
requested view (i.e. 0-Legal Valuation, 1-Group Valuation, 2-Profit Center
Valuation)

LinkedIn: CMA Ramesh Kolluru Page 2 | 9

SAP S/4 HANA 1809 Finance COGS Split

B.3) Create Strategy Sequence: Create ‘strategy sequence’ for the selected
‘Source Account’ as 1 with 1000 & 2 with 1001 as shown below to pick up the
‘COGS Split’ from the ‘standard cost split’ of the material in context.

B.4) Create ‘Target Accounts’: Then, create ‘Target Accounts’ against each
combination of ‘Source Account’ + ‘Cost Component’ (Ex: 101-Direct Material) so
that cost will be split into the required segments

LinkedIn: CMA Ramesh Kolluru Page 3 | 9

SAP S/4 HANA 1809 Finance COGS Split

B.5) Maintain ‘Offsetting Accounts’: Maintain ‘Offsetting Accounts’ if needed to

offset the entry of split. Else, leave it blank.

B.6) Define Company Code Settings: Here, you just need to assign ‘Cost Splitting
Profile’ to the required Company Codes with a ‘valid from’ date.

LinkedIn: CMA Ramesh Kolluru Page 4 | 9

SAP S/4 HANA 1809 Finance COGS Split

B.7) Define ‘Document Type Mapping’:

C) Cross-checking:
2 FI & 2 CO documents get generated during PGI as discussed above.

LinkedIn: CMA Ramesh Kolluru Page 5 | 9

SAP S/4 HANA 1809 Finance COGS Split
1st FI Document:
Debit to ‘clearing account’ (like GR/IR account) &
Credit to Finished Goods Inventory account.

2nd FI Document:
Debit to various COGS Split accounts &
Credit to ‘Clearing Account’ (which was debited in 1st document above)

LinkedIn: CMA Ramesh Kolluru Page 6 | 9

SAP S/4 HANA 1809 Finance COGS Split

OKTZ (Cost Component structure)

Let’s take ‘COGS Tariff’ component for instance, which is of USD 22.38 and from
this amount comes from 3 GL accounts as configured in ‘Cost Component
Structure’ (as depicted below):

LinkedIn: CMA Ramesh Kolluru Page 7 | 9

SAP S/4 HANA 1809 Finance COGS Split
From Cost Estimate display (CK13N),

Similarly, other components too can be cross-checked with the configuration

Ex: COGS-Direct Material component is USD 125
Cost Component Split

LinkedIn: CMA Ramesh Kolluru Page 8 | 9

SAP S/4 HANA 1809 Finance COGS Split

LinkedIn: CMA Ramesh Kolluru Page 9 | 9