With MYSAP ERP releases (ECC 5.0 onwards) SAP introduced New GL functionality. Most of the User interfaces and transactions remain same, however internal architecture and available functionality has changed drastically.
Need for the Change?
SAP mentions need to satisfy various accounting principles quickly, faster period end close, supporting management and segment reporting and reconcile data in real-time as some of the reasons for New and enhanced functionality. All of these are valid reasons.
When SAP introduced G/L functionality in R/3, there was a clear demarcation between Financial Accounting (FI) and Controlling (CO) modules and it was stressed that FI is should be used only for external reporting and CO should be used for internal reporting. Business users always had tough time over this difference because accounting department has always seen these two functions as one. Also, accounting landscape has changed over the time and standard SAP functionality was not able to meet the requirements. SAP clients came up with all kind of creative solutions including modifying standard system. New G/L functionality attempts to satisfy financial users by giving them a single unified tool for all the reporting needs.
Ledger Concept: Earlier Business had to deal with different ledgers in different modules. These ledgers include Classic GL Ledger for legal reporting, Reconciliation ledger to reconcile CO with FI, COGS ledger for Cost of Sales accounting, Special Purpose Ledgers to meet special reporting requirements. Users had to run thru all these different modules to extract reports. FI and CO also had to be manually reconciled. Now, all these ledgers are combined in GL by introducing parallel ledger concepts. Leading Ledger is assigned to all Company Codes and Non Leading ledgers can be assigned to individual company codes to meet specific requirements. Leading Ledger is the like Classic GL ledgers. There can be only one leading ledgers. All the data from other modules such as Controlling and sub-ledgers such as AA, AP, AR flows to leading ledgers.
Segment: Segment can be used to create financial statement at level other than Company Code. Once segments are activated, Profit center master data will have a new field for Segment assignment.
Document Splitting: Document splitting concept was introduced to find missing account assignments like Profit Center and Segment for balance sheet items. That way financial statement can be prepared at Profit Center and Segment level.
Scenarios: Scenarios defines fields which are updated in Ledger during the posting such as Cost center scenario, profit center scenario.
Key Table Changes for New GL functionality
- BKPF, BSIK, BSIS, BSID, BSAK, BSAS, BSAD – Used in New GL the same way as before
- BSEG – Items affecting Leading ledger
- BSEG_ADD – Items affecting Non leading ledger
- FAGLFLEXA – Actual split line items
- FAGLFLEXP – Planned split line items
- FAGLFLEXT – Total for split line items
- GLT0, GLPCA, GLPCP, GLPCT – No longer used
Migration to New GL accounting
Migration should be planned very carefully. SAP has introduced a 3 Phase approach for migration.
Key dates are
- Migration date – End of Phase 0 and Start of Phase 1 (Last date of current Fiscal year)
- Activation Date – End of Phase 1 and Start of Phase 2
3 Phases are
- Phase 0 – Analyze system, crate blueprint, and prepare for phase1. You can split the document in this phase.
- Phase 1 – You customize changes for New GL in this phase, Validate document splitting and perform actual migration at end of phase 1.
- Phase 2 – Start using New GL.
Migration Cockpit is a tool to simplify migration to New G/L. SAP delivers the tool when you buy service based migration.
Migration Cockpit has a process tree with activities in logical sequence specific to scenarios. Activities can generally be divided into Manual Confirmation, Transactions and Check Programs. Manual confirmation requires user to confirm if certain steps have been performed. Transaction activity requires user to perform certain transactions such as postings. Check program checks system for consistency. For example, if Segment has been introduced, check program checks for the existence of segment master data. You can store start and end dates of activities. Cockpit also stores status of activities and system logs.
Considerations during SAP New GL Migration Project
When you switch from Classic GL to New GL, here are functionalities that can be covered under standard SAP Fixed price Service based migration scenarios.
Merging Various FI Ledgers – This is basic functionality that is always accomplished after new GL migration. Classic Ledger, Cost of Sales Ledger, and Consolidation ledger are merged into leading ledger in New GL. For each account, it can be specified which ledger will be used as source for new GL leading ledger.
Migrating Special Ledger or Profit Center – Special ledgers can be migrated to New GL ledgers. Profit center tables GLPCT/GLPCA can be migrated to New GL tables FAGLFLEXT/FAGLFLEXA. Profit center and Partner profit center will be updated in New GL tables. Segment field can also be updated if required.
Document Splitting – If document splitting is used on profit center, business area or Segment, migration scenario can include information related to splitting.
Parallel Valuation – Parallel ledger is new concept in New GL. You can consider moving from Parallel accounts solution to Parallel Ledger solution and include this in migration.
SAP New GL Scenarios
Scenarios are assigned to ledgers and determine which fields are updated when postings are received from different modules.
Standard SAP comes with 6 scenarios. You can’t create customer specific scenarios. You can, however, use custom fields if required while assigning scenario to GL.
All six scenarios can be assigned to a ledger; however this will impact the performance. More totals records will be created in Total table and writing/retrieving data will be slower.
Below are 6 scenarios and fields updated when scenarios are assigned.
- Business Area Scenario – Sender Business Area and Receiver Business area
- Profit Center Update Scenario – Profit Center and Partner Profit Center
- Segmentation Scenario – Segment, Partner Segment, and Profit Center
- Preparation for Consolidation Scenario – Consolidation Transaction Type and Trading Partner
- Cost of Sales Accounting Scenario – Sender Functional Area and Receiver Functional Area
- Cost Center Update Scenario – Sender Cost Center and Receiver Cost Center
Data Entry vs General Ledger view
In New GL each document will have 2 views for display. Data Entry view is same as Classic G/L display. General Ledger view is enhanced view and displays fields updated because of assigned scenarios. You can also choose ledger here to see document in each ledger.
Configuring Document Splitting
Document splitting is key concept in SAP New GL. To configure Document splitting, you need to understand following key concepts.
- Item Category– Item Category is the key characteristic of GL accounts. For many accounts this can be automatically determined such as Customer, Vendor, or assets. For other accounts, it needs to be assigned to GL accounts in configuration.
- Business Transaction– SAP delivers Business transactions that identifies posting. This is used to limit item categories the business transaction can be posted to.
- Business Transaction Variant– Variant is subset of Business Transaction. This can be used to further limit item categories for a business transaction.
- Document types– Document type has the same function as it had in Classic GL. However, in new GL, Document type has more significance. Document types are assigned to Business Transaction and Transaction variant.
- Document splitting Characteristic– Here you can choose to split document on Business area, Profit Center or segment. You can also indicate if the characteristic should be mandatory in documents and if zero balance is required.
- Splitting method– Spitting method defines the way spitting is carried out in transaction. Based on Spitting method, business transaction and transaction variant; you can specify what item categories are split and based on what item categories.
- Inheritance– You can specify in splitting rule if item category should inherit document splitting characteristic (such as Profit Center) from item category if splitting characteristic is not specified during posting.
How all this work? – Based on document type, business transaction and transaction variant are derived during posting. Splitting method, along with business transaction and transaction variant, then determines the splitting rules i.e. what item categories are edited based on base item categories as defined in config of splitting rule.
How to hide Classic GL Config Path
When you activate New GL accounting, system creates a new path for Financial Accounting and activates new transactions specific to New GL such as FB01L for ledger specific posting. However old cofig path is not automatically removed. Later, if you want, you can hide Classic GL config path using Program RFAGL_SWAP_IMG_OLD.
Additional Functionalities in SAP New GL
SAP has introduced additional functionality with New G/L. Here is the short summary.
Parallel Ledger – In Classic GL, Parallel accounts concept was used to prepare financial statements for different legal requirements. This functionality still exits. However, the functionality is difficult to use if number of non-shared GL accounts is high. Parallel ledgers have been introduced to provide another option for parallel reporting.
Total table – GLT0 has been replaced with FAGLFLEXT with many more fields such as Cost Element, Cost Centre, Profit Centre, Functional area and Segment. Customer specific or Industry specific fields can also be configured.
Segment Reporting – Segment reporting replaces business area reporting or Profit center reporting for producing financial statements at levels below company code such as market segments or products. Profit center master data contains a new field for Segment assignment.
Document Splitting – Document splitting enable preparation of balance sheet with zero balance at Profit Center or Segment level.
Real time integration between FI and CO – In classic GL, postings from FI to CO were posted in real time. However, postings from CO to FI were not always real time. KALC was run to reconcile CO to FI. Integration is real time in New GL.
User Interface – User interface has been slightly changed to include new fields such as Ledger in reports.
Leading Ledger vs Non Leading Ledger
Leading ledger (0L) is the primary ledger while Non Leading ledgers act as parallel ledgers. The decision to choose leading ledger and accounting standard for leading ledger must be taken carefully.
- Leading ledger is assigned to all company codes by default while Non leading ledger is assigned to specific company codes.
- Leading ledger is integrated with all sub ledgers such as AP, AR and AA, and external modules such as CO.
- Leading depreciation area 01 in AA is always assigned to leading ledger. Other depreciation areas can be assigned to non-leading ledgers.
- Leading ledger settings are same as company code settings such as currencies, Fiscal Year variant and posting variants. Settings for non-leading ledgers can be different from company code settings.
Ledger Group in SAP New G/L
Ledger group is used to combine ledgers with similar functions. It allows posting to multiple ledgers at the same time. Ledger group is a new field added in many posting screens to make ledger specific posting.
In Ledger group, one ledger is used as representative ledger. Leading ledger is often used as representative ledger. Representative ledger is used to check settings for the posting such as posting period variant and whether the period is open for posting.
When ledger group is blank, document is posted in all ledgers. When you choose ledger group while posting, document is posted only in ledgers in the ledger group. If document is posted in leading ledger only, document is stored in BSEG only. If document is posted in non-leading ledgers only, document is stored in BSEG_ADD only. If document is posted in both leading and non-leading ledgers, document is stored in both the tables.
Profit Center Accounting in SAP New G/L
There have been some key changes in Profit Center Accounting in SAP New GL. PCA is integrated within GL eliminating need to manually reconcile GL with PCA. Profit Center tables GLPCT/GLPCA/GLPCP are no longer used. These have been replaced by New GL tables. Profit Center accounting scenario should be activated to take advantage of the newly enhanced functionality.
- Financial Statement with zero balance can be prepared at profit center level.
- Allocations can be used in GL. However, there are few differences as compared to Classic GL. Distribution used primary cost element while Assessment used secondary cost element in Classic GL. There are no secondary cost elements in New GL. So, assessment is done thru a credit GL account.
- New GL table FAGLFLEXP is used for planning data. GLPCP is no longer used.