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SAP Accounting powered by SAP HANA – Moving controlling and finance closer together - Part II

New users have traditionally struggled to understand the way SAP separates Financial Accounting and Management Accounting where most legacy systems see the two as one. While it’s easy enough to understand how a payroll account flows from the profit and loss statement into cost center accounting because the account information stays the same, the situation becomes more challenging as a revenue account flows into profitability analysis and is transformed into a value field, or a cost of goods sold account becomes multiple value fields depending on the cost components involved. In its latest product release, SAP is bringing the two worlds closer together.

We have and will share portions of the transcript from Janet Salmon's plenary session at the Controlling conference, Janet explores how SAP is addressing these issues with its new product SAP Accounting powered by SAP HANA, part of SAP Simple Finance. Additionally, she delves into how the requirements for internal and external reporting are converging and how this convergence impacts SAP Controlling. 

The first version of SAP Accounting powered by HANA, will be working with this idea of a logical document. What the logical document does is, it leaves these 2 big line items tables, the same. I still have an FI line item and I still have a CO line item, but we're tying them together. Going forward, we'll actually take that and make it into one big physical document. As a mental picture to take with you, when we typically taught people, what's CO? We sit there and we say, "Well, if you look at your FI accounts, you've got your balance sheet accounts and you've got your profits and loss accounts. Then, those profit and loss accounts that you want to see in CO, create another record for them, it's called the Primary Cost Element. Then we'll record things like payroll by cost center, material expenses by order, revenue by COPA dimension. It's really just, more detail of what you have in the other one. 

At the moment what we're doing is, we're tying those 2 line items together. Going forward, we'll make that into one record, with everything in that one record. Then of course what happens then is, all the funny business of this CO starts. All those settlements, allocations, where I need creating sender/receiver relationships, and moving costs. For example, from my team to a product group or whatever. Now, with the new GL, we already have the ability to tell FI, what had happened there, you know? "I've made an allocation, I've taken costs off my marketing cost center, and I've assigned it to my product groups. I've taken costs off my production cost center, and assigned it to a production order." Every time those cross a barrier, whether it's a profit center, a business area, a functional area or a company code, we create an FI document for it. 

Going forward, we'll actually just treat secondary cost elements as a special type of account. It was a one-to-one reference. You can imagine that some of these documents got pretty big, you know? There's a limit of 999 line items in FI. If it was a payroll and you had a pretty substantial payroll, you could end up with 4, 5, 6 FI documents with reference to CO documents. What we've done in the new scenario is, we've actually taken that link, the thing that held the 2 together, and made it available at line item level. We can really go line item per line item through the document and say, "These are the payroll costs for this cost center. These are the material costs for this order" and so on. What's changed these references procedure, object key, logical system? This is something you don't usually have to worry about. It's our problem, unless you have problems in interfacing. We've actually moved those down a layer. We've put them into the CO table, so that we can tie the 2 documents together.

The other thing we've done is, we've actually tied in the COPA table. This is the COPA Dimensions. All the things in your operating concern that say, "I'm going to report by product, by product group, by region, by product hierarchy", and so on. We basically bring the 2 together. It means, essentially when we're reporting, we're doing a hunting and gathering process that looks at the FI document and says, "Which of these are PNL items?" We're looking at the CO line item table and saying, "Which of these are primary cost elements?" We're looking at the COPA table and saying, "Which dimensions do you assign to?" When we've done that, we can do ... We've had to extend the CO table, to bring those things together. Those of you who are very familiar with this, you'll notice quite a major change. 

Missed Part I? Read it here. 

Stay tuned for more next week! 

2021 | Controlling Conference
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SAP Accounting powered by SAP HANA – Moving contro...
Part I: SAP Accounting powered by SAP HANA – Movin...

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