simple finance - the convergence of the gl account and the cost element

8/18/2019 Simple Finance - The Convergence of the GL Account and the Cost Element

1/12

Simple Finance - The Convergence of the GL

Account and the Cost Element In this post we will look at the convergence of long standing pieces SAP ERPfinance master data, the GL Account and the Cost Element. As anyone that hasworked with SAP CO in the past knows the cost element is key to the controllingside of SAP. It in an object that allows you to identify the type of activities that canbe done within controlling with that account. They are generally divided into Primaryand Secondary cost elements.

Primary cost elements have an associated GL account and are generally

expense or revenue accounts.

Secondary cost elements exist only in CO and are used for internal

settlements, assessments, and allocations.

When creating a new revenue or expense account in the GL you have to create acorresponding cost element in CO and typically all you were doing was selecting aCost Element Category.

With the Simple Finance Add-on 2.0 (now called On Prem 1503) the traditional costelement create, change and display transactions are gone. The functions have beencombined in FS00 - Manage G/L Account Centrally. This greatly simplifies the act ofcreating a new account and eliminated the need to maintain separate masters.

On the Type/Description screen there is a new field called account type. If you selecteither "Primary Costs or Revenue" or "Secondary Costs" a new field will appear onthe Control Data tab for you to enter the Cost element type.

Primary Cost Example:

http://scn.sap.com/community/erp/financials/blog/2015/06/19/simple-finance--the-convergence-of-the-gl-account-and-the-cost-elementhttp://scn.sap.com/community/erp/financials/blog/2015/06/19/simple-finance--the-convergence-of-the-gl-account-and-the-cost-elementhttp://scn.sap.com/community/erp/financials/blog/2015/06/19/simple-finance--the-convergence-of-the-gl-account-and-the-cost-elementhttp://scn.sap.com/community/erp/financials/blog/2015/06/19/simple-finance--the-convergence-of-the-gl-account-and-the-cost-element


2/12

Secondary Cost Example:


3/12

I think this is a good step forward in simplifying the SAP finance master data anddriving the convergence of FI and CO.


4/12

Version 1.0 of the Simple Finance Add-on was launched in 2014 and the version 2.0

is launched in 2015 very recently. This should again put to rest some of the

concerns about the future road-map of this new offering.

Some of the highlights of the add-on 1.0 are listed below

a. Revamped Asset Accounting: Simplifies the concept of depreciation areas,parallel valuation in asset accounting and facilitates parallel reporting by means ofledger approach as well as accounts approach

b. New GL mandatory: Classic GL no longer supported in Simple Finance. One hasto be on New GL. (Need not be full fledged New GL. Lite version of New GL wouldsuffice)

c. Concept of Data Archiving replaced with Data Aging (Hot / Cold Partitions of theDatabase)

d. A brand new Cash Management Solution, powered by SAP HANA

e. New Asset Accounting is mandatory. Classic AA no longer possible in the newoffering

f. On-the fly summarization reports (from line items)

g. Good amount of overhaul in the Key SAP tables.

h. Option to split COGS in the FI-GL as per the Cost Component Split, etc

Simple Finance Add-on 2.0 will unleash some new changes. Material Ledger iscovered in the add-on 2.0 and it is expected to change the way GL / Cost Elementmaster is looked at.

In this document, made an attempt to summarize the features / changes introducedby Simple Finance Add-on 1.0, for various process areas / activities.

Process Area Sub-Area Impact

Cost Center

Accounting Master Data

In the activity type master data, pre-

distribution of fixed costs is not

supported for sender cost centers.

Activity Price In the planning versions, tab of price


5/12


Calculation calculation, the actual method should be

set as Periodic price .

Splitting

Structure

In the assignments of the splitting

structure configuration, multiple

splitting assignments are not supported.

In the Selection for assignment , Group

is not supported.

In the splitting rules, only splitting

methods 12, 21, 22, 23, 24, and 25 are

supported. The Weighting indicator is

not supported.

In the selection for splitting rules

configuration, version 0 is supported.

Plan-to-

Produce Master Data

Origin Group of the Delivered material

must not be changed

Multiple operation sequences and

parallel sequence are not supported.

Operation split for scheduling is not

supported.

Period End

Close

Variance

Calculation

Target cost versions other than 0 not

supported

The explanation function provides less

detailed information than before. No

explanation is provided for scrap

calculation

"Write Line Items" should be selected in

the Variance Key definition

Minor differences are not supported.

Primary price variances are not

supported.

Variance categories can be posted to


6/12


different GL Accounts

New T Codes, same as Classic Ones,

with a suffix 'H' (i.e. KKS1H)

Performance improvement of the

Variance calculation program using the

power of HANA

The Close schedules must be updated to

include the new programs

WIP

Calculation

New T. Code KKAOH has been

introduced for calculation of WIP

Using KKAOH, WIP can only be

calculated on production orders, not on

product cost collectors or process orders

New WIP report helps to see the details

of the WIP GL Account broken down

into Primary and Secondary costs of

Production orders

Performance improvement of the WIPcalculation program using the power of

HANA

The Close schedules must be updated to

include the new programs

WIP calculation in only one version

(Legal Valuation) is supported

Assessments &

Settlements

To take full advantage of the SAP

HANA architecture, assessment cyclesand settlement rules to ensure they are

working with account- based profitability

analysis

Overhead

Calculation The standard dependencies (D000 –


7/12


D080) are supported. The customer-

defined dependencies are not supported

A quantity-based overhead rate should

not be referenced by another quantity- based overhead rate.

Object currency conversion is not

supported for quantity-based overhead

rates. In such cases, the object currency

must be the same as the controlling area

currency.

Users need to configure the amount

using the controlling area currency inthe Costing Sheet.

Order and Business Process are not

supported as the object to be credited.

From/To origin are not supported. All

units of measure of the cost elements

defined in the Base must be compatible.

Order-to-Cash COGSPostings COGS can be split between multiple GLaccounts to mirror the Cost Components

Credit

Management

FI-AR-CR (Credit Management) will be

sunset in next release. FSCM-Credit

Management must be used

Asset

Accounting Technical

Classical AA no longer available. This

applies across the system. New AA

must be used

Enterprise Extension EA-FIN is MUST.Using New GL is MUST

Leading Valuation can take place in any

dep. Area. No longer necessary to use

Area 01 for this


8/12


SAP EHP7 with business function

FIN_AA_PARALLEL requires us to

use Ledger Approach only. SFIN

Supports both ledger and accountsapproach

ALE transfer is not available in New

AA

The batch input method for transactions

based on AB01 is not available. New

BAPIs must be used. Any existing

interfaces may have to be reworked

New T Codes, same as Classic Ones,with a suffix 'L'. Old T Codes no longer

available. Auto direct to New T Code if

one uses the older one

Postings

Leading and Parallel Dep. Area can now

post in real time.

- Hence, Concept of Delta Dep.

Area is Obsolete

Asset postings (i.e. separate documents)

can be made separately to each Dep.

Area / Accounting principle, using

AB01L

- The restriction of transaction types

to depreciation areas no longer applies

- User Exit

APCF_DIFFERENT_AMOUNTS_GETno longer supported

Simplified management of goods that

are to be capitalized in accordance with

one set of accounting principles, but are

to be posted to expense in accordance


9/12


with a different set

The integrated posting of investment

support on assets using FI transactionsis not supported. Tcode ABIFL must be

used

Documents before changeover from

Classical to New AA cant be reversed.

An Inverse posting must be made

Work lists made in AA before the

changeover may not work. Hence, all

pending tasks with the WL must be processed before the migration or New

WL must be created after the Migration

For all asset postings, all posting dep.

Areas are updated in real time. Hence,

ASKBN is now required only for Dep.

Areas that manage reserves for Spl.

Depreciation only

JointVenture

Accounting

(Oil &

Mining)

Not Compatible with New Asset

Accounting

Planning

New Planning Solution brings financial

accounting (FI) and management

accounting (CO) together. Flexible Top-

Down and Bottom-Up planning functionmade available

The ability to aggregate and

disaggregate data quickly makes it

possible to perform simulations and


10/12


forecasting much faster than was

previously possible.

User friendly MS Excel front end and

Embedded BI cube makes planningeasier. Sample BI cubes are integral part

of the SAP now

SAP also delivers a program that

automatically analyzes existing

customer-specific CO-PA dimensions

and generates the corresponding BI

objects.

As this planning solution is completelynew, it has no impact on existing plan

data. SAP will not provide migration

functionality.

Project

Systems Master Data

To take best advantage of the SAP

HANA selection capabilities, you must

create selection variants

Results

Analysis

Only the following results analysismethods are supported:

- Revenue-based results analysis

(method 01)

- Cost-based results analysis based on

the % of completion (method 03)

Customer enhancement and the other 15

methods are not supported.

Expert Mode is partially supported.Only RA in Legal Valuation is

supported

Planned Results Analysis is not

supported.


11/12


DataArchiving

Data Archiving made redundant, Already

Archived documents can still be

accessed

Data Aging introduced

Cash and

Liquidity

Management

Classic Cash and Liquidity Management

solution is obsolete

New Cash Management Solution on

HANA provides the following new

features

- Bank Account Management

- Cash Position and Short-Term Cash

Forecast

- Embedded Liquidity Planning

- Cash flow and liquidity forecast

calculation powered by SAP HANA

- New user experiences with the Net

Weaver Business Client (NWBC)

Year End

Close Balance C/f

The program for carrying forward balances now enables you to initialize

data carried forward previously when

you want to repeat a balance

carryforward

Reporting

Income

statement bymarket

segments

Reporting uses a logical document that

links the financial accounting (FI) line

item, the CO line item, and the CO-PA

dimensions (where available) to providean income statement broken down by

market segments.

Summarization

Hierarchies in

Data Collection before hand has been

made redundant


12/12


CO On-the-Fly Summarization report has

been introduced

Dynamic Summarization, rather than

Pre-defined Summarization

Tables

Summary

Tables

removed

GLT0, FAGLFLEXT, COSS, COSP,

KNC1/3, LFC1/3. (replaced by CDS

Views)

Index Tables

removed

BSIS, BSAS, BSID, BSAD, BSIK,

BSAK, FAGLBSIS, FAGLBSAS

(replaced by CDS views)

Impact oncustom reports

Custom reports based on above tableswill continue to work

Logical

document

FI / CO document are now linked at Line

Item level

This facilitates a logical view of the

FI/CO document (Using HANA Live)

via program

FCO_LOGICAL_DOCUMENT