Understanding the Universal Journal in SAP S/4HANA
Since the introduction of the Universal Journal with SAP S/4HANA Finance 2.0, a large amount of information material has been available that describes the architecture as a whole or different aspects of it.
The Universal Journal has made business life much easier for users, allowing fast decisions based on a holistic financial and management accounting picture – for example by accelerating period end-closing activities through the elimination of tedious reconciliation work.
Nevertheless you may still have a question or two on the concept and its benefits. That’s why we have collected some key facts and further information sources explaining the Universal Journal.
The Universal Journal – what’s it all about?
The Universal Journal brings together the once-separate components Financial Accounting (FI) and Controlling (CO) into one pool of relevant business data. This single source of truth collects all accounting-relevant transactions and makes them available to all relevant application components: Financial Accounting (General Ledger), Controlling, Asset Accounting, and Material Ledger.
Technically speaking, the Universal Journal combines the most important fields from these components within a single line item table, which enables the components to read and process the data required for their business processes from a single location.
The advantages of having all this information in one place are evident: No reconciliation activities are needed, data redundancies are eliminated, and line items are entered only once. All of this reduces the memory footprint and increases the throughput of the system. Overall, companies can even benefit from lower TCO thanks to the Universal Journal.
Why was the Universal Journal introduced?
The historic separation of Financial Accounting and Controlling dates back to the belief that these areas would be independent of each other from a business point of view, even if they relied on the same underlying business processes. This led to the creation of independent database tables for each area.
Over time, however, the realization arose that FI and CO have a lot more in common than was originally assumed, and reconciliation efforts for closing purposes became necessary. In order to bring the two areas closer together, reconciliation ledgers were developed and, with the introduction of the architecture known as FI-GL (new) or New GL, real-time integration of FI and CO was made possible (along with further accomplishments such as parallel ledgers for multiple accounting standards, as well as Profit Center Accounting). These unquestionable milestones, however, did not change the fact that the separate components continued to exist, along with highly redundant data and the remaining reconciliation challenge.
It was only with the introduction of the SAP HANA database technology that the last logical step could be taken, namely to unite the FI and CO components into one physical table (table ACDOCA).
SAP HANA with its superior compression techniques and columnar layout is able to aggregate huge numbers of line items within seconds, making it possible to dispense with separate physical line item and totals tables in each application. Real-time integration is therefore guaranteed by design. Thanks to this technology, the Universal Journal with its centerpiece, table ACDOCA, could be developed.
Find more answers on specific questions regarding the Universal Journal here:
SAP Note 2428741 – “Universal Journal FAQ”
For even more details about the Universal Journal, check out the following links: