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How do I get from Classic GL to ACDOCA in one step retaining and enriching historical data?

Segment reporting in areas such as Profit Centers (PCA), Business Areas, or Segments can pose a significant challenge in the Classic GL world with having to run multiple periodic closing transactions to retrieve restricted financial statements. SAP New General Ledger (New G/L) mitigates this issue by bringing online integration of these characteristics enabling the company to draw up financial statements by these additional dimensions at any time.

New General Ledger Accounting in SAP offers new procedures for parallel accounting, accelerated period-end closing and improved transparency in addition to the online integration of financial and managerial accounting. Using parallel ledgers set up in SAP New G/L the company can draw up financial statements for multiple valuations using different accounting principles such as local GAAP or IFRS.

Traditionally, if the customer is on an ECC or R/3 system with Classic G/L they can only implement SAP New General Ledger after upgrading to SAP S/4HANA. The project complexity depends on data volume and the extent of to-be customization. Regarding the Brownfield approach, the conversion from classic G/L to New G/L can only be accomplished after the conversion to S/4. This means that Document Splitting can only be activated for documents that are posted in the system post-conversion while all the historical documents remain unenriched with the required characteristics even in the new S/4 system.

It is possible to enrich Open Items with Document Splitting characteristics so that the Balance Carry-forward for the year is enriched with these characteristics, however this process can only be done by implementing a technical BAdI (Business Add-In) customized for the client. With the SDT approach, however, there is a lot more flexibility to attain the necessary state in a single step as part of the transition to S/4HANA. No separate sub-projects are necessary if the risks and complexities are appropriately managed.

 

Before we look at the approach in SDT, let us understand what Document Splitting entails. For drawing up partially segmented balance sheets according to areas of responsibility or for a set of legal requirements, companies require a way to have the Balance Sheet G/L account inherit the split by CO account assignment objects in the document.

A vendor invoice is entered with the following items:

Posting Key Account Segment Amount
Cr. Payables 100.00-
Dr. Expense 0001 40.00
Dr. Expense 0002 60.00

Document splitting then creates the following document in the general ledger view:

Posting Key Account Segment Amount
Cr. Payables 0001   40.00-
Cr. Payables 0002   60.00-
Dr. Expense 0001   40.00
Dr. Expense 0002   60.00

There are two ways to enrich a historical FI document for Document Splitting while transitioning to S/4HANA in an SDT approach:

  • Entirely based on the new customizing in S/4HANA for splitting characteristics using the zero-balance clearing account additional lines are generated as necessary for the relevant profit centers or funds in order to balance them to zero in the document. We call this approach the “Real Split”. It is only possible if there is an ability to process the postings hierarchically, starting from the predecessor documents (ex: invoices) and moving down to the closing postings (ex: payments cleared). The line items in the G/L view within a document accurately represent what it would have looked like if the customizing for Document Splitting was active even in an R/3 system.

 

  • It is also possible to enrich all historical documents with a “default” profit center or segment for all or selective Balance Sheet line items. This approach reduces complexities greatly while also preserving the characteristics while transitioning to S/4. Additional line items are generated for each document posted to the S/4 zero-balancing clearing account with the motif of bringing all the profit center balances to zero within the document.

 

With the traditional approach of activating Subsequent Document Splitting, SAP recommends making this change at the very beginning of the Fiscal Year. It has to be a separate sub-project after S/4HANA go-live, so the risks are great with this approach. We recognize that this isn’t always ideal for our customers, so with the SDT approach, the customer has all the flexibility in determining what documents need to be enriched and split while still ensuring that the carried-forward balances remain accurate with the split so that the financial statements pulled in the future years will always be accurate across the dimensions. Accomplishing this as part of S/4 go-live ensures that there is sufficient time to prepare, validate, test, and make necessary changes while also reducing the complexity of the process.

In conclusion, the process of moving from a Classic GL to ACDOCA can be complicated.  Here at cbs, we make it easy.  Leave a comment below if you’d like to learn more.

Victor Puente
Manager, Sales & Marketing
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