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Problem statement

In the lifetime of a company, it might happen that it is being merged with another company. But how can this be accomplished technically in SAP Business ByDesign?

Several times, I was asked to give some guidance in a customer story that sounds like this or similar:

Our company group consists of holding A and company B and C, reporting into A. Now, we need to merge all of these companies into A.

The main business, with deliveries, projects, sales orders and customer contracts runs in company B.

Often, it s more complicated like:

At first, we will merge B and C into a new company D and merge, in the next step, D into A.

Questions arising from this challenge:

  • How do I migrate all operational business into A?
  • How do I provide a closing and opening balance for the “new” companies?
  • Which tools do I have to do accomplish the migration?

Possible solution

In most cases, it is not necessary to set up a new company or a new tenant containing a new SAP Business ByDesign installation. Starting from scratch would come with some disadvantages, but I don’t want to discuss this here, I just want to provide another perspective.

Often, the legal and technical changes can be treated separately. There’s one perspective of the trade register, but how you model your companies in SAP Business ByDesign is another one.

Taking the example above, you should consider:

  • The merger of B and C into D is only a very temporary situation, that might persist only minutes, because D will be merged into A right away. It only happens due to legal reasons and does not need to be modeled in SAP Business ByDesign.
  • Of course, company B with all the business documents will end up into company A, but you don’t want any interruption for your business, just because of a change of the legal structure of your company.

Therefore:

Evaluate (with your auditor) to model the merger technically (in SAP Business ByDesign only) as a merger of A and C into B:

  • Renaming company B to A’s name might be the easiest part. Of course, think of changing the org structure (respect time slices for changes of org structure) and business partners assigned to the org structure (e.g. the company).
  • Close company A, B and C regularly at the key date (hopefully a month end, in best case a fiscal year’s end). Migrate the closing balances of A and C (with adaptations due to the merger) into B. Use either the migration Excel or the migration entry sheet.
  • Perform migration of fixed assets, stocks, … of A and C into B. You can use the data extraction tools to get directly the migration templates you will need for upload for company B.
    But: copy-paste is a false friend, don’t forget to adjust keys, e.g. the company id.
  • Produce closing and opening balances and persist them audit safe.
  • Set a period and a process lock for the time before the key date.
  • Change B’s VAT ID at the key date.
    But please be aware: the VAT ID will not be changed / changeable for customer invoices and supplier invoices that have already been posted. For some countries, it is being re-evaluated when reporting taxes to the authorities. But this needs to be tried out.
  • Change forms at the key date.

This list might not be complete, but if you have more to add – please leave a comment, I will extend it. Also a lively discussion of this approach would be appreciated.

And: as always – test this approach carefully!

Shortened Fiscal Year

In case you need a shortened fiscal year to really, you won’t run into issues if you have set-up an “other fiscal year” for your set of books. As far as you have not posted into the future, you can adjust the fiscal year to your need.

What, if you have not? In this case, raise a support ticket to SAP, it will be required to change your fiscal year variant deeply into the system. Unfortunately, this is a paid service.

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2 Comments

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  1. Melanie Bergbold

    Hi Thomas,

    we just had two merge three companies (all of them were using the same ByD tenant) into one and are now facing the problem of what to do with the two old companies.

    Our aim is to end these companies (organizational structure and fiscal year) and to freeze the current state. So we are facing some challenges concerning the organizational structure (no more activated assets allowes) and the closing of the fiscal years of these two companies (Balance Carryforward).

    Can you please give us some advice?

    Thanks & best regards,

    Melanie

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    1. Thomas Meder
      Post author

      Hello Melanie,

      in this case, create the next fiscal year to get the balance carry forward. Then close it with means you have – period lock, process lock.

      What I have not tried out – ending the company in the org management. Could be an option as well. In case you try this out, please tell me if it worked for you.

      Best regards,

      Thomas

      (0) 

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