Part-1 : What is Universal Parallel Accounting (UPA)
Part-2 : ECC (Parallel Valuation) Vs S/4HANA Parallel Valuation with UPA
Part-3 : ECC Configuration
Part-4
In this Blog, we have a look at a step-by-step IMG configuration flow, which will make it much easier to see where Cost-Plus (Manufacturing) and Sales-Minus (Commercial) Transfer Pricing are set up in ECC vs S/4HANA UPA.
I’ll show you flow diagrams (text-based, step-by-step) for both ECC and UPA so you can compare where the customizing sits in IMG.
⚙️ Configuration Flow — ECC Transfer Pricing
ECC IMG Path for Transfer Pricing (Classical):
Controlling (CO)
└─ General Controlling
└─ Transfer Pricing
├─ Basic Settings
│ └─ Activate Transfer Prices (01 Legal, 02 Group, 03 PC)
│
├─ Define Valuation Views
├─ Assign Valuation Views to Controlling Area
│
├─ Define Valuation Strategies
│ └─ (Here you configure Cost-Plus or Sales-Minus approach)
│ • Cost-Plus: Add markup % to manufacturing cost
│ • Sales-Minus: Use selling price minus margin %
│
├─ Assign Valuation Strategy to Applications
│ (Product Costing, Order Settlement, CO-PA)
│
└─ Integration with Material Ledger
├─ Logistics General → Material Master → Settings for Key Fields
│ └─ Activate Valuation Areas for Material Ledger
└─ Define Parallel Valuation in ML
👉 In ECC:
- Cost-Plus markup: Configured in Valuation Strategy (strategy picks “cost + % markup” for transfer price).
- Sales-Minus margin: Implemented via valuation strategy + SD pricing conditions, and linked to COPA.
- Mandatory ML to get parallel valuation for inventory.
⚙️ Configuration Flow — S/4HANA UPA
S/4HANA IMG Path for Transfer Pricing (UPA, from 2022+):
Financial Accounting (New)
└─ General Ledger Accounting
└─ Parallel Valuation (Universal Parallel Accounting)
├─ Activate Universal Parallel Accounting
│
├─ Define Transfer Pricing Variants (TPV)
│ └─ Configure Methods:
│ • Cost-Plus (manufacturing markup rules)
│ • Sales-Minus (commercial margin rules)
│
├─ Assign TP Variants to Controlling Area / Company Code
│
├─ Define Valuation Views (Legal, Group, PC)
│
└─ Integration
├─ Product Cost Planning → Assign TP Variant to Costing Variant
├─ Production Orders / Process Orders → Settlement Rules
├─ Sales & Distribution → Assign TP Variant in Pricing/COGS
└─ Profitability Analysis (Margin Analysis) → Activate Multi-Valuation
👉 In UPA:
- Cost-Plus markup: Maintained in Transfer Pricing Variant (TPV). System applies % markup automatically in Legal valuation, strips in Group, reassigns in PC.
- Sales-Minus margin: Configured in same TPV, linked directly with COGS + Sales posting in ACDOCA.
- No Material Ledger dependency: All valuations are in ACDOCA.
🔑 Key Difference in Flow
| Step | ECC | UPA |
|---|---|---|
| Activation | CO → Transfer Pricing → Activate | FI → G/L Accounting → Parallel Valuation → Activate UPA |
| Valuation Views | Defined & assigned to CO Area | Same, but embedded in UPA framework |
| Cost-Plus / Sales-Minus | In Valuation Strategy (CO) + ML | In Transfer Pricing Variant (TPV) |
| Integration | Required ML for inventory, COPA for reporting | Integrated with Costing, Settlement, SD, Margin Analysis directly in ACDOCA |
| Reporting | Fragmented (FI, ML, PCA, COPA) | Unified in ACDOCA, available in real time |
✅ In summary:
- In ECC, you configured Cost-Plus vs Sales-Minus in Valuation Strategies (CO), but needed ML and COPA enhancements to make it work end-to-end.
- In UPA, both are configured centrally in Transfer Pricing Variants and automatically applied across manufacturing, sales, and reporting.
A Graphical view of ECC-Transfer Pricing (Classical ERP) and S/4HANA UPA (2022+)
MP's S/4HANA 