"New Financial consolidation plays a significant role in providing information to the business faster"
Large companies need to consolidate their Financials during month-end as they have multiple legal subsidiaries in one or more countries. They need to maintain books of accounts using multiple standards such as US GAAP, IFRS, etc. Their subsidiaries may have a variety of ownership relationships. Each company could have intercompany sales, Cost Of Goods Sold (COGS), and Intercompany Accounts Payable and Receivables. SAP S/4HANA Group Reporting suite includes more than just a consolidation engine. It is a new solution and not a legal successor of any existing SAP Consolidation solutions. SAP Group Reporting Data Collection is a cloud-based solution, which is available for cloud and on-premise. It will be helpful to access data that is not in the SAP S/4HANA core. The new Financial consolidation plays a significant role in providing information to the business faster. Moving to a virtual group close, and we can perform many consolidation tasks in real-time. It helps companies to get a detailed perspective of the business at any point in time. As consolidations and planning are together in SAP S/4HANA, it provides the perfect vehicle to drive rolling forecasts for real-time consolidations. Customers can Combine this with the predictive accounting capabilities of SAP S/4HANA Finance. It helps Finance Officers to take decisions faster. This functionality helps entities to accelerate their corporate closing processes. The new Group Reporting capabilities help companies to increase the data quality, speed, and transparency of group closing processes. Using a single source of truths ACDOCA, ACDOCU, ACDOCP shareholders, and other business partners will have complete confidence “Numbers” that are provided by the Finance team and also helps the Finance teams to minimize the time and resources required to produce those numbers. It helps large companies that have much different SAP and non-SAP ERP business solutions as Group Reporting functionality gets the data in real-time. We can also load the data directly to the consolidation application via file-upload from different source ERP systems or we can also establish Programming Interfaces that connect to Group Reporting Data Collection.
The major part of the data will be fetched from the Universal Journal Entry table. The Intercompany Matching and Reconciliation solution will help speed up the intercompany reconciliation process from a company close to corporate close. This works without any extract; transform & loads processes and reconciles Financial Accounting data in real-time. We will achieve high degrees of automation and continuous accounting. It improves the visibility and transparency of your reconciliation process.
SAP S/4HANA Group Reporting functionality provides a very smooth process between the local and group closing activities since both are in the SAP S/4HANA System. Both local and group closing activities utilize the same user interfaces as well. The new consolidation table is ACDOCU (Universal Consolidation Journal Entries Table). The accounting document’s actual line item table is ACDOCA.
SAP delivered pre-configured content for SAP S/4HANA Finance for group reporting. Customer-specific configurations can be done on top of best practices content delivered by SAP. It will accelerate the consultant’s efforts for configuration. Refer to SAP OSS Note 2659672. Customers can use standard configuration as it is, or copy and make changes wherever needed. The best practices content Master data, Consolidation chart of accounts - Mapping of g/l accounts to fs items - Document types - Currency translation methods - Elimination(reclassification) methods - Balance carry forward account assignments - Selected items for automatic posting - Validation methods - Data monitor and Consolidation monitor task groups - SAP Fiori roles - Reports - Core Data Services views and queries - Pre-configured Activity-Based Consolidation of Investments.
Restrictions for SAP S/4HANA Finance for group reporting 1909:
- The below are a few restrictions for SAP S/4HANA Finance for group reporting 1909. It would be ideal to contact SAP to know if restrictions applicable for your version/ edition before you start the implementation of Group Reporting.
- The usage of SAP S/4HANA Finance for group reporting in conjunction with the component Enterprise Controlling - Consolidation (EC-CS) in the same system/client is only supported in the context of the transition from EC-CS to S/4HANA Finance for group reporting (see note 2833748).
- Only one dimension can be used and it must be the delivered dimension Y1-Companies. The dimension Y1 is defined for the consolidation type Company. Only this consolidation type is supported.
- It is not supported, within one version, to assign different ledgers to the different consolidation groups. When multiple group currencies are required for consolidation groups, the corresponding ledgers must be assigned to the consolidation groups in different versions. For example, in version Y10, it is not possible to assign the ledger Y1 to the consolidation group CG1, and to assign, in the same version Y10 the ledger Y2 to the consolidation group CG2.
- The deletion of the version is not supported.
- New Group Reporting Logic is only activated by default when release 1909 is installed. To activate the New Group Reporting Logic after a system upgrades to 1909 you must open a customer message on SAP Service Marketplace on the FIN-CS-COR-MD component.
- The SAP Group Reporting Data Collection Application on the SAP Cloud Platform cannot be used with the on-premise version of SAP S/4HANA Finance for group reporting. This restriction is removed in version 1909 FPS1.
Implementation Procedure:
With Best Practices
The SAP Best Practices content is already included in your system. Check SAP Note 2776611 to see if a more recent content version is available for download, import the local solution, and install data files to the SAP Best Practices Solution Builder, and then activate the content.
After the activation of the SAP Best Practices solution, you can either extend or create your configuration in the implementation guide (transaction SPRO). The automatic content upgrade to the next release is not possible via Solution Builder
Before activating a solution, we should always get the most recent SAP Best Practices content. This content is attached to SAP Notes, which are integrated into the central content activation note 2776548. We download transports containing the data files with the content from the SAP Note and import them manually to client 000. The download is a zip file and can contain up to 2 transports.
Without Best Practices
We need to configure manually using Transaction SPRO and our Group Reporting solution may not be compatible with future SAP Best Practices content
If Customers don’t want to install the BP content, They can run an initialization program to create the minimum system settings that are needed to use the solution and which are not accessible in customizing.
If BP content is already installed, we cannot run the initialization program.
Note for SAP S/4HANA 1809, for running Group Reporting it is a mandatory prerequisite to install the BP content (scope item 1SG) for the solution. You can only make configuration settings in Customizing for SAP S/4HANA for Group Reporting (IMG) after that.
During Upgrade
If you have already activated the 1809 Best Practices Content, do not activate the Best Practices Content for 1909. Do not apply 1909 content to an 1809 release. A higher version of content on a lower-release system is generally not supported.
The upgrade from 1809 to 1909 is only a technical system upgrade. After the technical upgrade, SAP recommends activating SAP Best Practices in a separate client and running a FIT/GAP analysis of the current Customizing. For the same reason, we cannot install an additional country solution in the context of an upgrade from 1809 to 1909.
Consolidation Process:
The first step for the Consolidation process is the preparatory step. Such as setting global parameters, checking the master data of your organizational units and financial statement (FS) items, and specifying effective exchange rates.
After that, we can proceed with collecting data reported by consolidation units and standardizing the data with features available in the Data Monitor. When the data is ready for consolidation, we go to the Consolidation Monitor to perform the consolidation tasks, such as various interunit eliminations and data validation.
We use the data monitor to run the activities for collecting and preparing the financial data reported by consolidation units. These activities are called tasks. The tasks of the data monitor are predefined and ready to use. The system manages the status of the tasks and thus ensures a logical sequence and consistent data.
We will be able to open and close periods of a fiscal year for a specific consolidation group or consolidation unit. The data monitor displays the hierarchy of organizational units. We can run the tasks for the consolidation groups as well as the individual consolidation units.
For customers with an initial release SAP S/4HANA on-premise 1809 FPS02 or lower, a consolidation group hierarchy can have multiple subgroup hierarchies. It is required to have a unique consolidation ledger in all groups and subgroups within a hierarchy and consolidation version. If you need to consolidate with different ledgers for a group, parallel hierarchies must be created where all groups in each hierarchy still have a unique ledger
We can only release data from the accounting period that corresponds to the consolidation period in which the release task is executed, provided that the accounting period is still open. The accounting data from a prior period can only be displayed in the "Release Universal Journals" task on the tab "Data from Prior Periods Without Release". In this case, for Group Reporting, the missing data can be posted manually to a later period that is still open in Data Monitor by using the Post Group Journal Entries app.
An Example for Consolidation process:
- Preparing for an Integration Scenario
- Configuring Consolidation Using Organization Structure Creation
- Configuring Consolidation Using Master Data Configuration with Fiori UI
- Validating Configurations
- Matching and Reconciliation of Integrated Intercompany
- Reviewing and Maintaining Consolidation Units
- Setting Up a Consolidation Group Structure and Performing Data Preparation for Initial Consolidation
- Performing the Consolidation Process for Initial Consolidation
- Performing Data Preparation for Full Consolidation
- Performing the Consolidation Process for Full Consolidation
- Setting Up a Consolidation Group Structure and Performing Data Preparation for Initial Consolidation (Actuals Activity-Based)
- Performing the Consolidation Process for Initial Consolidation
- Performing Data Preparation for Full Consolidation
- Performing the Consolidation Process for Full Consolidation
- Viewing Consolidated Balance Sheet Reports
- Viewing Consolidated P&L by Nature of Expense
Conclusions:
Many organizations are interested to install SAP S/4HANA Finance for group reporting to streamline their processes so that they can focus on profitable growth. Consultants experienced in SAP S/4HANA Group Reporting can guide customers on the required Landscape for Group Reporting. Customers need SAP Fiori to configure, execute, monitor, and report financial results, SAP Analysis for Microsoft Office for reporting. The SAP graphical user interface is used to configure and run closing tasks.
From a continuous accounting perspective, financial consolidation plays a significant role in providing information to the business. Advances in group reporting technology are also helping companies accelerate their book-closing processes. With the support of continuous accounting and group reporting, corporate finance departments can better do their closing cycle, freeing up more time for value-added tasks. Finance teams can increase the data quality, speed, and transparency of group closing processes — and help their firms run better and smarter.
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About Author
Dr. Ravi Surya Subrahmanyam, PhD (Finance),
Director, SAP Practice, The Hackett Group India Ltd.
Visiting Instructor- SAP Education, SAP India & SAP APJ.
Dr. Ravi Surya Subrahmanyam is a technical and Financials writer with a background in SAP Financial Accounting, Funds Management, Group Reporting, Financial Supply Chain Management, Cash Management & in-house cash, SAP S/4 HANA Finance. He has been working as a Director for the SAP Practice for The Hackett group India Ltd, (Answerthink Company). He completed his Master’s degree in Finance from Central University, Master of Commerce from Osmania University, Master of Commerce from Andhra University, and Ph.D.in Finance from one of the best universities in India. His research papers have been published in National and International magazines. He has been a Visiting Instructor for SAP India Education and SAP Indonesia – Education. He has been working on Conversion and Upgradation projects. He is a Certified Solution Architect for SAP S/4 HANA and an SAP S/4 HANA Certified Professional. He can be reached at sravi@answerthink.com or fico_rss@yahoo.com
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