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Finance Transformation / Chart of Accounts conversion

Problem statement: how to plan your Finance Transformation?

Potential Problem answer: Lessons learnt from Customers and partners undertaking an ECC or S/4H Chart of Account (CoA) conversion.

Are you or your company thinking about a Chart of Accounts conversion due to individual business requirements? Eg because of acquisitions, new legal requirements, company transformation or simply because you have to clean up.

This blog post aims to provide you with lessons learnt from many years of experience on numerous delivered SAP CoA projects from the Data Management and Landscape Transformation team in SAP.

In the context of parallel accounting or other drivers it is necessary to conduct at least a revision or in many cases a complete new design of the Chart of Accounts before positioning it as new refined global operational chart of accounts.

As a keyword, you may think about this as a Finance Transformation.

SAP experience shows from roll-out and/or IFRS/US-GAAP or similar implementation projects that customers are facing major challenges on how and where to start in understanding their individual needs for meeting their requirements.

And this does not only heavily touch FI and CO. It touches all application modules in your system, where GL accounts or cost elements are used, too.

Before you can start the technical project for your Finance Transformation, you typically have a lot of Excel or SE16 or z-programming work to do, as to find out what your system contains, where change makes sense or not, what you can do at all.

Thanks to SAP note 2387585 you can use the small coding coming from the note to do some more comparision and status elaboration work https://launchpad.support.sap.com/#/notes/2387585

Often this prework is subject for larger efforts across many departments, with hundreds of consultant days as to help you to understand what the new structure should look like, but you would still need to know, if your design can be realized in reality, if SAP can help you.

There is help available, if you involve and align with DMLT in SAP / LOB Finance tools and consulting services.

The Chart of Accounts conversion need  is a typical subject for change and refinement in a production SAP system after decades of system uptime, or when you deal with legal changes or acquisitions. Here are some scenarios where you may need to do this:

  1. You would like to change this in your ECC system.
  2. If you are planning your S/4 HANA transition and do not want to do a greenfield approach, and you look for new alternatives.
    1. An alternative approach can even be a very customer individual tailored approach during the transition itself as a subject for a selective data transition to S/4 HANA. 
    2. A ‘selective data transition can be placed on top your ‘conversion to S/4 HANA on the fly’ meaning your conversion project (e.g. CoA or FY-1 or Currency project) is one additional element during your journey to S/4 HANA.
  3. Or you are now active in S/4 HANA already and require a change in your chart of accounts.

In ECC it is a mature and a standardized technical service, where we can easily adapt over to the S/4 HANA world.

S/4 HANA technical CoA changes are nevertheless actually an individual consulting project.

As conclusion, this is and was a common and regular technical service request that DMLT experts in SAP services can assist you in your ECC or S/4 HANA journey.

Note:

if you use the migration cockpit for your ECC to S/4 HANA journey, you may use transaction LTMC as to design via Excel upload your new CoA – but this only as side comment, if you like to know more about functions in LTMC, I recommend to contact and proceed in this blog: https://blogs.sap.com/2020/01/18/ltmc-s-4-hana-replacing-lsmw/

 

Start your preparation in time:

To be sure that your preparation for new requirements are tackling the right questions and solution approaches, contact the dedicated experts from LOB Finance or DMLT in SAP who will be happy to help you build the bridge also in your internal business.

For example on ‘Tagging’. Tagging of GL accounts and FS version is more and more important in S/4 HANA as this is used in customizing and may help you a lot to speed up in reporting, and also to be more flexible, see also https://help.sap.com/viewer/651d8af3ea974ad1a4d74449122c620e/1909.001/en-US/0652186231414216a044d1755100b85a.html

Our SAP LOB Experts can help you mainly in the pre-conversion phase of such a major project, before the DMLT in SAP (Aka ‘SLO’) team can proceed with the technical part of this change.

That way, SAP works together and is not only a technical solution provider.

Our CoA mapping analysis tool in turn may also help you to learn more and understand your actual situation where you came from, it is comprehensive and with little effort from SAP side and is a high benefit for our customers who are interested to run anywhere in mid term or in future a Chart of Accounts conversion service.

 

Technical service details:

When you have finished your blueprint and design phase, it is time to plan the technical part of the realization and to deep dive into technical details of the solution. Here are some items you need to consider:

  1. You would like to restructure or rename or merge your actual Chart of Accounts as to match it to your new design. Typically you need to have a exclusive test environment that allows you to validate and prove your future design, an exclusive Sandbox that the DMLT experts use for the project.
  2. Changes can be done as renames (1:1) and mergers (n:1), whilst split action is only subject to customer manual activities only and it can’t be technically included.
  3. Master Data, Transaction Data, Customizing Data is in scope, if it is affected and identified in the system or if it is defined via a given account or cost element that is subject for a change.
  4. The whole history must be considered as to achieve a consistent data conversion including archives if relevant archive objects are in use by your business.
  5. Customer tables and 3rd party content can be included, if they follow SAP Standards and Hierarchies.
  6. The decision is yours if you need to create new Financial Statement layouts, or adjust and reuse existing ones as to match those towards your new CoA.
  7. The service is key date independent which means you can place it in during a time where no influence from parallel projects increases risk and complexities.
  8. Whether you simply just overwrite the old CoA into a new one by help of our service and replace old values against new ones.
  9. Or whether you merge the old CoA into a new CoA that already exists in your system, your system looks like it always used ‘the new’ CoA.
  10. Consider if you need to include SAP ABAP based satellite systems like BI or SRM, where such a mass data change needs to be considered as well.

 

You like to know how you can receive support from SAP to plan and execute your new Chart of Account requirements?

You may visit the following portal: https://support.sap.com/en/offerings-programs/support-services/data-management-landscape-transformation/unifications.html and find also our Chart of Accounts service there (amongst others).

You may refer also to the CoA specific solution via SAP note https://launchpad.support.sap.com/#/notes/1461700

For more technical details for starting a deeper dive into your particular requirements, we advise to get in touch with the experts behind this blog and also from LOB Finance, and especially do not hesitate to contact our global customer engagement team: SAP_DMLT_GCE@sap.com

 

For the Cloud customers:

In S/4H Cloud, the following option to tailor your Chart of Accounts before production start exists, and this is the option you can take only before going live: SAP Activate Methodology for SAP S/4HANA Cloud
https://go.support.sap.com/roadmapviewer/#/group//roadmap/IMPS4HANACLDENMGMT/node/901B0E6D3F441ED8BFF4D74D7E434CCE

 

 

3 Comments
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  • The interesting question would be if you are on the COA approach and need to move the New GL at the same time as you now want to use a Global COA.  But to add an extra bit of complexity, documents posted in ECC using the COA approach do not have any validations to verify they aree posted via the "accounting principle IFRS or local GAAP".  So the trial balance per accounting principle is only balanced and adjusted at the end of month ....... reversing the incorrect documents or entering new documents to have the trial balance = zero.

    • Dear Nash,

      as you say it increases complexity if you like to bring New G/L scenarios and COA projects into one solution stream, if I understood your comment correctly?

      Not without reason SAP is strongly recommending to do one step after (!) the other, parted ideally even by one fiscal year, especially if both scenarios are already not easy ones, no low hanging fruits..

      E.g. if you like to merge multiple operational COA into one and at  the same time have New G/L. Happy testing, I say, since this stretches of course not only test and project time.

      One can do this on exception and with some hard times especially for the customer test team (since you always need to distinguish and separate in sequence at least in 2 tests between issues coming from project A or B, and only if A&B issues are resolved, you can bring them into one sequence in the end...not to speak about the potential of having extended downtime, a extra long weekend maybe, or even 2 separate Go-Lives nevertheless)

      If you can plan better, you should do. We always recommend, not to mix it, alone, some customers do not like this advice and force us into it, focus only on money, thinking of it as a 'technical project'. Which is absolutely wrong, as the application and business test teams from customer are heavily involved, factor 3 to 4 per project. Well....we are advisors, not deciders.

      Hope this helps, Uwe

  • Thanks Uwe,

    The problem is whether the big bang approach is feasible.  Moving to a single global operating COA means moving to a ledger approach.

    But your point would be:-

    1. Move to the New GL using the existing COA ledger construct (0L IFRS = 1 & 2 GL accounts and (ZL GAAP = 1 & 3 GL accounts) and add validations to ensure we keep the posting in check.  With say the New GL has an activation date of 01.01.2022 as we have so many wrongly posted financial documents so we can't take historical data/postings into the New GL.  The New GL migration would fail.  Tried this wilth an S/4 HANA conversion ... very ugly outcome.
    2. Later on and after everything is mature we then transform into a global operating COA model doing a COA LT project which would handle master data, transaction data and configuration data (OBYC, AO90)

    Am I correct based on your advice, solution first money second ......?

    Regards

    Warren