Upload
raghu
View
2.467
Download
7
Embed Size (px)
Citation preview
© 2007 Wellesley Information Services. All rights reserved.
10 Best Practices for Implementing the New G/L
Aylin KorkmazAccenture UK
2
What We’ll Cover …
• What is new General Ledger, and should I implement it?• 10 best practices for implementing new G/L• Tips to mitigate migration risks• Wrap-up
3
What is New General Ledger (New G/L)?
• With mySAP ERP 2004, SAP introduced new G/L• New G/L provides one-stop, integrated reconciliation of
multiple ledgers e.g., the cost-of sales ledger, Profit Center accounting ledger, and the consolidation staging ledger are combined into a one-stop ledgerYou no longer have to individually reconcile them
4
Comparison of New G/L with Classic G/L
Industry-SpecificLedgers
B/S by grant, fund …
Classic G/LLegal
requirements
Profit Center LedgerManagement andsegment reporting
Special LedgerMulti-dimensional,customer-defined
CoGSLedger
New General Ledger supports:
Legal requirementsMgmt. and Segment reporting
Extensibility by industriesExtensibility by customers
Balanced books for any dimensionParallel sets of books
Fast closeTCO reduction
Intl. accounting standardsCompliance & transparency
5
New Features of the New G/L in mySAP ERP 2005
• Migration of existing SAP Data• Reporting for Line Item Display and Open Item Accounting• Simulation of the General Ledger View• Statistical Key Figures• Comparative Analysis• Profit Center Derivation• Archiving• Local Currency Changeover• Parallel Valuation Approaches/Transfer Prices for Materials• Integration with FI-TV (Travel Management), HCM (Human Capital
Management), Public Sector Management-Funds Management Government (PSM-FM)
Check the following SAP Notes for release restrictions741821 – Release limitations concerning mySAP ERP 2004852235 – Release restrictions for mySAP ERP 2005
6
Should You Migrate to New G/L?
• Does your organization meet any of the following criteria:Are you planning to use mySAP ERP?Are you an international company operating in multiple countries and on multiple continents?Do you use multiple accounting methods (US GAAP, HGB, IFRS, etc.)?Do you (have to) perform management reporting by different business areas, e.g., product lines, line of business?Are you required to file by segments at period-end according to SEC guidelines?Do you produce consolidated financial statements across multiplelegal entities? Do you spend an exorbitant amount of time reconciling FI and CO during month-end closing?Do you wish to reduce the complexity of your organization’s financial data structure?
7
Should You Migrate to New G/L? (cont.)
If you answered “yes” to most of the previous questions, your company is a good
candidate for new G/LSolution
8
New G/L – Additional Key Considerations
• License and upgrade view: New customers
Have a mySAP ERP license. New G/L can be implemented and used.Upgrade customers
Have to acquire a mySAP ERP license to implement and use new G/L• Implementation view:
Financial processes scopeDetailed analysis of the target financial processesManaging of changes to the financial processes
Organizational and master data implicationsNew master data objectsOrganizational structure mappings
Integration with other systemsOutgoing and incoming interface impactsReporting system impact assessment
9
What We’ll Cover …
• What is new General Ledger, and should I implement it?• 10 best practices for implementing new G/L• Tips to mitigate migration risks• Wrap-up
10
Best Practice 1: Streamline Your Segment Reporting
• Segment reporting is providing financial information by line of business, or by geographical or management area
• New G/L offers better quality and modeling options for segment reporting than classic G/L
You no longer have to wait until period-end close to build your segments (an expensive and error-prone approach)Segment information is populated in financial transactions
Because segment information is stored at the detailed document level, segment-based balance sheets and P&L statements are available within standard reporting, saving time and minimizing errorsAccount balances can be reviewed at the segment level, and periodic activities (e.g., revaluation and balance carry forwards) are handled with ease
You no longer need to activate a special ledger to show financial position and performance by segment under company code level
11
1 – Streamline Your Segment Reporting (cont.)
• Business Area is also available as an account assignment field in new G/L
Business area can also be used as segment reporting objectThe business area will be retained in the present form
Data and functions will be available in the future• In the near future, SAP will focus on further developing
functionality based on the Profit Center Entity• Check SAP Note 321190 for more information on reporting
by Business Area and Profit Center in new G/L• Fields for Industry Solutions are supported in SAP ECC 6.0
Tip
321190
Don't Forget
Customer fields can also be introduced for producing B/S and P&L statements. But only after exploring the standard fields (Segment, Profit Center, and Business Area), that can be used.
12
1 – Streamline Your Segment Reporting (cont.)
• In new G/LYou do not activate Profit Center Accounting (EC-PCA)
Instead, you activate the appropriate Profit Center Scenario for the corresponding new G/L ledgers
Ledger 8A is no longer usedProfit Center Master Data and hierarchies can be usedCheck SAP Note 826357 to learn more about PCA in new G/L
Tip
Note 826357
13
1 – Streamline Your Segment Reporting (cont.)
• EC-PCA is not active in the corresponding controlling area. You can still use Profit Center Master Data and hierarchies. (Transaction code: OKKP)
14
Best Practice 2: Segment Definition and Derivation
• “Segment” is a new cost object which can be used for segment reporting
Segment information can be populated either manually or automatically
Assign segment field in the Profit Center Master Data to derive segment automaticallyIf Profit Center Master Data is not used, custom derivation rules can be defined with BADI FAGL_DERIVE_SEGMENT to derive segment automaticallyManually update segment information at the time of the financial posting
15
2 – Segment Definition and Derivation (cont.)
• It is recommended to populate segment field by assigning segments to profit centers
Cost Objects• Cost Centers• WBS Elements• Internal Orders
Profit Center Segment
16
2 – Segment Definition and Derivation (cont.)
• Segment assignment in the Profit Center Master Data
17
2 – Segment Definition and Derivation (cont.)
To Activate Segments:1. Define Segments (See next slide).2. Derive the Segments (i.e., via Profit Center Master Data).3. Maintain the field status group in the FI accounts. The
Segment field can be found in group Additional Account assignments (Txn: FBKP).
4. Maintain the field Status of the corresponding posting key (Txn: FBKP).
5. Maintain scenarios. The segmentation scenario has to be defined for the corresponding ledger (See next slides).
Solution
18
2 – Segment Definition and Derivation (cont.)
• Define your segments
19
2 – Segment Definition and Derivation (cont.)
• Assign scenarios to ledgers
20
2 – Segment Definition and Derivation (cont.)
If Profit Center Master Data is not used, custom derivation rules can be defined with BADI FAGL_DERIVE_SEGMENTNote
21
Best Practice 3: Document Splitting
• Splitting enables line items in the document to be divided for selected dimensions
i.e., segment, Profit Center, and business areaFor example, a vendor invoice posted against multiple expense lines belonging to different segments
Vendor and tax lines are split to the corresponding segments according to the offsetting expense amounts belonging to each segment
22
Document without splitting
Balance Sheet SEGMENT 1
Balance Sheet SEGMENT 2
Document with splitting
Balance Sheet SEGMENT 1
Balance Sheet SEGMENT 2
PK Segment PC Account Amount31 SEGMENT 1 PCA1 Vendor 23231 SEGMENT 2 PCA2 Vendor 92840 SEGMENT 1 PCA1 Postage Expense 20040 SEGMENT 2 PCA2 Postage Expense 80040 SEGMENT 1 PCA1 Input VAT 3240 SEGMENT 2 PCA2 Input VAT 128
Assets Liabilities&CapitalInput VAT 32 Vendor 232
Retained Earnings (for expenses) -200
32 32
Assets Liabilities&CapitalInput VAT 128 Vendor 928
Retained Earnings (for the expense)
-800
128 128
PK Segment PC Account Amount31 Vendor 116040 SEGMENT 1 PCA1 Postage Expense 20040 SEGMENT 2 PCA2 Postage Expense 80040 Input VAT 160
Assets Liabilities&CapitalInput VAT Vendor
Retained Earnings (for expenses) -200
0 -200
Assets Liabilities&CapitalInput VAT Vendor
Retained Earnings (for expenses) -800
0 -800
3 – Document Splitting (cont.)
23
3 – Document Splitting (cont.)
• Recommendations on splitting:Define your splitting characteristics
Characteristics that will be used to produce your B/S and P&L. Define Profit Center and Segment as splitting characteristics.
Zero Balancing CharacteristicsMake sure that you select this option for your splitting characteristics. Doing so will make sure that a zero balance is secured in each document.
Mandatory CharacteristicsMake sure that you select this option for your splitting characteristics. Doing so will make sure that the selected characteristics are populated in each document line.
24
3 – Document Splitting (cont.)
• Recommendations on splitting: (cont.)Inheritance – Activate the inheritance
If no characteristics specified, characteristics will be inherited from the lines with characteristics
Default Assignment Make sure that you specify a default assignment for cases where the characteristics cannot be determined
General Ledger Account Assignment to Item Categories Revenue, Expense, Balance Sheet accounts have to be assigned to the right item categories (e.g., 30000, 20000, and 01000)
25
3 – Document Splitting Tip
With ECC 6.0, you can simulate splitting before posting the documentTip
26
3 – Document Splitting Tip (cont.)
27
Best Practice 4: Reporting Functionality
• The extended data structure of new G/L is available in standard reports
e.g., Document view, Line Items report, Balance Sheet report, Drill-Down reports
• Use Report Painter/Report Writer to create customer new G/L reports using new G/L table FAGLFLEXT
There is a new standard report library, 0FL, for new G/L• Use SAP NetWeaver® BI for more advanced reporting
New G/L includes a new data source, 0FI_GL_10, for collection of mySAP ERP data within SAP NetWeaver BI
28
4 – Reporting Functionality (cont.)New General Ledger
Balances for an account are kept by additional characteristic(Transaction Code: S_PL0_86000030)
29
4 – Reporting Functionality (cont.)
Classic Balance Sheet report also reads from new G/L table
(Transaction Code: S_ALR_87012277)
Use dynamic selections to further restrict the desired characteristics. You may need to create various selection variants to make the report execution easier.
30
Best Practice 5: New G/L Solution for Parallel Accounting
• The need to provide parallel financial statements to meet the requirements of international accounting standards is growing with the continued globalization of capital markets
• Previous SAP releases provided methods to support parallel accounting, but mySAP ERP offers a new, simpler approach
• New G/L lets you keep parallel ledgers simultaneously, according to different accounting standards
SAP considers the ledger solution method equivalent to the account solution method. They recommend using the ledger solution method if you have a large number of G/L accounts. (SAP Note 779251).
Don't Forget
31
FI-ARFI-AP…SDMMPPPM…
All
Ledg
ers
Upd
ated
Sim
ulta
neou
sly
New General Ledger
0L Leading Ledger
Non-Leading Ledger
Non-Leading Ledger
Other Non-Leading Ledgers
Postings via new transactions FB01L and FB50LForeign currency Valuation Program FAGL_FC_VALUATION
FI-AA depreciation areas
Onl
y Sp
ecifi
ed L
edge
rs a
re U
pdat
ed
IFRS, US GAAP, Local GAAP Reports are based on the corresponding ledger
5 – New G/L Solution for Parallel Accounting (cont.)
• Value flow:
32
Best Practice 6: Set Up Your Ledgers Correctly
• You can define only one leading ledger (0L). Ledger 0L should be set up as your leading valuation.
e.g., US companies should set up 0L as US GAAP ledger, whereas European companies should use 0L for their IFRS valuation
• Local Accounting: Normally one ledger is enough for all countries
Non-leading ledgers are activated for each company codeParallel ledgers can increase the data volume in tables, so only activate non-leading ledgers for companies where they are required. (SAP Note820495 – Data Volume and Parallel Ledgers).Only postings to the leading ledger flow into the CO module, thus no postings to sub-ledgers would affect the Controlling ledger.
Don't Forget
33
6 – Set Up Your Ledgers Correctly: Key Steps
1. Define the non-leading ledger
Non-leading ledgers can not have currencies different than the leading ledger.
2. Activate non-leading ledger only for necessary company codes
34
Best Practice 7: Activate Real-Time CO-to-FI Integration
• Once activated, the FI/CO reconciliation program (KALC) does not need to be run at period-end
Only activate the objects you need to be transferred back to FI
You can choose which CO postings will be transferred back to FIFor example, if a CO posting crosses a Company Code, Business Area, Functional Area, Profit Center, or Segment, an FI document will be created
35
Best Practice 8: New G/L Allocations
• Use FI allocations for segment and Profit Center allocations
• Make sure that you have configured allocation settings prior to setting up these cycles
Transaction codes: GCA6 for Distribution and GCA1 for Assessments
Warning
Do not use FI allocations for Cost Center allocations if you use the CO module
36
8 – New G/L Allocations (cont.)
• Configure the settings for the segment field in transaction GCA6 – Field Usage for Distribution
With these settings, the field segment can be used as the sender and receiver field in distribution cyclesThe field is hidden in the cycles in the SAP-delivered settings
Allocations in FI generate only FI documents
Tip
37
8 – New G/L Allocations (cont.)• You need to define a clearing account for allocation in General Ledger Accounting
If more than 1,000 items are created during an allocation, the system splits up the FI document. The balance of the document is posted to the clearing account.
• In the master data of the G/L account, define a field selection group that does not include any required entry fields
• The account is a technical account that cannot be changed in the FI substitution (substitution call-up point 0002 – line items)
Don't Forget
38
Best Practice 9: Set Up Your New G/L Scenarios
• These scenarios are new to new G/L. They identify the fields that are updated in ledgers during the posting.
The following scenarios are available:Segmentation (FIN_SEGM)Cost Center Update (FIN_CCA)Preparation for Consolidation (FIN_CONS)Business Area (FIN_GSBER)Profit Center Update (FIN_PCA)Cost of Sales Accounting (FIN_UK)
• Only activate the scenarios you need to avoid unnecessary data volume• Assign scenarios to the relevant ledger only• Industry-specific scenarios are available for industry solutionsTip
39
9 – Set Up Your New G/L Scenarios (cont.)
• Preparation for Consolidation (FIN_CONS) This is needed if you use SAP BCS or EC-CS*
• Profit Center Update (FIN_PCA) One of the prerequisites to enable B/S and P&L statements in new G/L for Profit Centers
• Segmentation (FIN_SEGM) One of the prerequisites to enable B/S and P&L statements in new G/L for Segments
*EC-CS = Enterprise Controlling -Consolidations
40
Best Practice 10: Leading Valuation in Asset Accounting
• Depreciation Area 01 should represent your leading valuation
41
10 – Leading Valuation in Asset Accounting (cont.)
• In new G/L, unlike classic G/L, only differences are posted to parallel depreciation area, i.e., Local Accounting area
• You can use a wizard to customize the parallel valuation (Txn: OADB_WZ)
42
What We’ll Cover …
• What is new General Ledger, and should I implement it?• 10 best practices for implementing new G/L• Tips to mitigate migration risks• Wrap-up
43
Common Implementation Challenges
• Not enough understanding of the new G/L concept• Continuing to think in “classic” terms• Confusion as to which objects to use for
segment reporting• Rushing to create customer Z fields before fully
exploring the standard fields• Confusion about parallel ledgers• Integration of G/L with other modules and reporting
systems (e.g., SAP NetWeaver BI)• Legacy data conversion or migration requirements
44
Tips to Mitigate Migration Risks
• Manifest an agreement between you and SAP for receiving unlimited and direct support from SAP over the duration of the project
i.e., until the new G/L concept and functionality has been completely configured, implemented, tested, and validated for business compliance and production readiness
45
Tips to Mitigate Migration Risks (cont.)
• Have a full-time resource on the project to address any questions, issues, and requests around the new version, and to accelerate the issue resolution process
i.e., a specialist familiar with new and “classic” G/LAlso someone familiar with the company’s business practices
46
Tips to Mitigate Migration Risks (cont.)
• Develop a prototype during initial design and testing to demonstrate that new G/L is a workable solution
The prototype should have a clear approach to segment reporting and parallel accountingSplitting and Segment updating should be tested for various financial transactions to make sure that the standard splitting rules are enough to cover all financial processes and segments are updated
47
What We’ll Cover …
• What is new General Ledger, and should I implement it?• 10 best practices for implementing new G/L• Tips to mitigate migration risks• Wrap-up
48
Resources
• SAP Financials Expertwww.ficoexpertonline.com/
Aylin Korkmaz, “Simplify Segment Reporting with the New General Ledger” (SAP Financials Expert, November/December 2005).Aylin Korkmaz, “Streamline Your Parallel Accounting with the New G/L Ledger Solution” (SAP Financials Expert, April 2006).Aylin Korkmaz, “Accelerate Your Closing Process with mySAP ERP New G/L and New Functions” (SAP Financials Expert, June 2006).
• http://help.sap.com/saphelp_erp2005/helpdata/en/2d/830e405c538f5ce10000000a155106/frameset.htm
49
7 Key Points to Take Home
• New G/L provides one-stop, integrated reconciliation of multiple ledgers
• You no longer need to activate a special ledger to track financial position and performance other than the company code level
• Design and prove the concept of your management and financial reporting during the Blueprint phase
Make sure that segment definition/derive is inline with your reporting and business requirements
50
7 Key Points to Take Home (cont.)
• Don’t activate the scenarios if you don’t need them to avoid unnecessary data volume
• Use splitting functionality to enable line items to be divided for selected characteristics (to produce financial statements for the selected characteristics)
• SAP considers ledger solution method equivalent to the account solution method
It is recommended to use the ledger solution method if you have a large number of general ledger accounts
• Don’t use FI allocations for Cost Center allocations if you use the CO module