Document Splitting in Central Finance
One of the key requirements from finance transformation journey for the business is the document splitting function. Most of the customers running on ECC would be using a source system without New GL that implies no document splitting. These customers would like to include document splitting when they go for a Central Finance implementation. However, until SAP S/4HANA 1809 release, a source system without document splitting and central finance system with document splitting was not supported as an out of the box functionality. With SAP S/4HANA 1909 and 2020 release, the document splitting with Central Finance has been enriched with the introduction of a pre-check in the source system based on rules configured in the central finance system and simulation of document splitting for stuck documents on target side. In this blog, we will see the need for this enhancement and how the new features work.
Therefore, the challenge was to ensure that all documents replicated from such source systems (including non-SAP third party source systems) have the right level of details to support document splitting. If a user posts a document in the source system that mixes several business transactions in one single posting, the splitter will not find an appropriate rule to apply (if no rules are maintained in the Central Finance system). Although the posting went ok in the source system, it would be denied in the Central Finance system. If a splitting characteristic (e.g. profit center) is configured as mandatory (and balancing to zero), it needs to be supplied in the posting. However, if this characteristic is not used in the posting of the source system, the posting would be denied. One of the (many) ways to achieve this was to use the BADI_FINS_CFIN_AC_INTERFACE to enable the right rules for populating the account assignments for document splitting.
The different workarounds to have the details to achieve document splitting in the central finance system:
- The account assignments for document splitting can be populated only in some of the line items and let standard splitting set up take care of offsetting line item (for example, the profit center and segment update in the GL line items and let the vendor line item derive the same from offsetting line item in case of a vendor invoice).
- Working with a constant (dummy) in the configuration of the splitter can be considered as a work around. However, this is not a recommended approach as there could be multiple documents with dummy data. Instead, default profit centers could be used.
- Some of the FI document line items can derive account assignment objects for document splitting from areas like material master, cost center etc. The customer specific changes should not be triggered in case, and the standard derivation logic can work.
- Secondary CO postings from source systems, where the profit center is not available in one of the line items, the customer specification needs to be updated.
- Data from non-SAP systems needs to be enriched with account assignment details for postings in the target central finance system.
- There are transfer postings between subledgers which fail in the target system if it has document splitting active.
Enhancement for Document Splitting
With these persistent issues, in the latest release of SAP S/4HANA 2020, SAP has further extended the document splitting feature. Now you can perform document splitting even if document splitting is not active in your source system. Not only this, it is also now very much possible to trigger the simulation of document splitting directly from an error message in the activity Monitor Initial Load Execution, for Initial Load Group. The below screen shows the new ‘Split Action’ functionality compared to the ‘TranfSplit’ in the 1909 version (which was only a check box).
The new feature has two enrichments:
- Document splitting checks on the source side
- Transfer report to transfer checks from target to source system
Document splitting checks on the source side
To avoid documents being posted in the source system which would lead to document splitting errors in the target system, Central Finance now supports the same pre-checks in the source system as in the target system. These are processed directly during the posting of FI documents in the source system, when the split process check is activated for this company code. These are run time checks during the posting of FI documents in the source system, when the split process check is activated for this company code. However, activating this check does not change postings on the source side. By default, the standard document split pre-checks are available in target CFIN system.
In the maintenance view Central Finance: Split Information per Company Code, two new check options are available. By selecting any one of these options, the document splitting checks are activated for the chosen company code even if document splitting is not active for that company code in the source system.
Path: IMG > Central Finance > Source System Settings > Handling of Document Splitting
Maintenance view: SM30 > VCFIN_SOURCE_SPL
Delta Check: This feature is the latest amendment to the Central Finance in SAP S/4HANA 2020 version. The other features are included from the 1909 FPS1 version of SAP S/4HANA Finance.
In the maintenance view Central Finance: Split Information per Company Code two new options are supported:
- E – Run splitting process check, raise error message. This option should be selected where document splitting is not active for the source company code but is active for the mapped company code in the Central Finance system. The system runs basic document splitting checks and, if there is an error, prevents the document being posted. In this option, the document replicated in Central Finance must respect the document splitting configuration in the target system.
- W – Run splitting process check, raise warning message. If document splitting is not active for the source company code but is active for the mapped company code in the target system and you select this option, system raises a warning message if a check fails.
If you select one of these options, the document splitting checks are activated for the chosen company code even if document splitting is not active for that company code in the source system. It is recommended that option E be used for production systems and W for testing in quality and other systems.
Transfer report to transfer checks from target to source system
This report orchestrates and allows to transfer customizing settings from the customizing tables relevant for document splitting made in Central Finance system to the corresponding source system.
Path: IMG > Central Finance > Central Finance: Target System Settings > Configuration for Document Splitting
Simulation of Document Splitting
If document splitting is active in your Central Finance system and the mapping simulation or posting simulation fails due to an error in the document split, you can trigger a simulation of document splitting for the document in question, by choosing Simulate Document Splitting in the error message. The fields in the Simulate Document Splitting function are then automatically filled with the values from the error message, allowing you to trigger the simulation for the document in question, without having to enter any additional information. From SAP AIF and from the monitor Initial Load Data, the user can start the Simulation of Document Splitting from the error message. The parameters are automatically transferred from the error message to the transaction.
Points to remember
- To ensure that cross system document splitting postings are processed correctly, the configuration settings for document splitting must be consistent in the source and target systems, as mentioned above. Also, all relevant company codes must be activated for transfer, otherwise, only documents of the active company codes will be transferred.
- Deferred tax processes involving document split are also not offered as out-of-the-box functionality in Central Finance. That is, neither the company code in the source system nor the company code in the Central Finance system must have document splitting activated.
- Configuration consistency check program only verifies the consistency of document splitting activation between the source system and the Central Finance system.
Note: The below section is the perspective of the blog writer.
Document splitting enrichment is a welcome addition to the Central Finance landscape that debuted around 4-5 years ago. However, the requirement to have the same document splitting settings in the source system (if no document splitting then the replicating documents must follow the rules of the document splitting configuration in central finance system) and the central finance system makes this enhancement a minor augmentation. With the new source system checks and simulation, SAP has given us an option to monitor and check the documents but there is still a lot more that is desired that is not yet included in the out of the box solution. The default settings are still needed for successful replication in the target system with split functionality active (and the source system with no document splitting).
Having said that, it is a step in the right direction as SAP recognized the need for this enhancement and has introduced the same as in the box solution with the latest Central Finance release. It can be said that the enhancement is still (some-what) pre-mature, but this opens the doors for future innovations and developments in this area.
With the progress made in the central processes and central payments, Central Finance is still considered as the best deployment approach by most of the customers undergoing the finance transformation journey. And to seamlessly activate splitting in target system without disruption to existing business processes or tedious splitting process in other deployment approaches is a game changer.