KE28: Understanding Top-Down Distribution in SAP CO-PA

SAP’s Controlling module (CO), Profitability Analysis (CO-PA), lets you analyze your organization’s profitability along various dimensions like products, customers, or regions. One critical function within CO-PA is top-down distribution, facilitated by the KE28 transaction code. Let’s explore what top-down distribution is and how to use KE28 effectively.

What is Top-Down Distribution?

Top-down distribution (TDD) allocates costs or revenues in CO-PA based on a predefined distribution logic. Here’s a typical scenario:

• You have incurred an overhead cost (e.g., advertising expense) that cannot be directly assigned to individual products or cost centers.
• You want to distribute this cost across your product lines or other segments to get a more accurate profitability picture.
• Top-down distribution allows you to do this using a basis like sales figures, quantity sold, or other relevant value fields.

Why Use Top-Down Distribution?

• Improved Profitability Analysis: TDD helps you understand the true profitability of products, market segments, and more by including a fair allocation of overhead costs.
• Allocation Fairness: Provides a structured way to distribute costs/revenues, making allocation more transparent and justifiable.
• Flexibility: You can customize the distribution logic using different allocation bases and characteristics in CO-PA.

Using the KE28 Transaction

Here’s a simplified breakdown of how to use KE28 for top-down distribution:

1. Access KE28: Enter the transaction code KE28 in your SAP system.
2. Define Parameters: Specify the following:

• • Controlling Area
  • Fiscal Year
  • Version
  • Sender values (characteristics from which costs/revenues are being distributed)
  • Receiver values (characteristics that will receive the allocation)
  • Value field to be used as a basis for distribution (e.g., sales revenue)

1. Processing Instructions: Choose how you want KE28 to handle the distribution and what characteristics to use for different purposes.
2. Selection Criteria: Set additional filters if needed (e.g., distribution only to specific product profit centers).
3. Execution: Run the distribution. You can choose to execute in test mode first to validate the results.

Important Considerations

• Choice of Value Field: The value field you select for distribution should logically relate to your allocating costs or revenues.
• Distribution Basis: Think carefully about your distribution logic to avoid inaccurate allocation.
• Characteristics in CO-PA: Ensure the required characteristics are set up in your CO-PA configuration for KE28 to work correctly.