Financial tips on System Conversion to SAP S/4HANA projects – Prepare – Material Ledger
Updated as of release 2022.
I am Betty Guedez and now I bring this blog post to make a contribution to ongoing and future system conversion projects, based on the experiences I have collected so far in this way to transition to SAP S/4HANA.
My starting point today is that Material Ledger activation is mandatory in SAP S/4HANA.
As Material Ledger traditionally has been part of Controlling (or Management Accounting) and worked as an accounting Sublegder, designed to provide the basis for material price determination, all related transactions also become part of the Universal Journal in SAP S/4HANA.
There are two possible cases: Material Ledger is currently in place and running when transitioning to SAP S/4HANA thru a system conversion: In this case, we need to accomplish some preparation activities and then adapt Material Ledger current customizing to make possible its conversion under the new approach brought by SAP S/4HANA, all of these very well explained by my RIG colleagues in blog post What you should know about controlling in SAP S/4HANA. (Part 2).
Second option: Material Ledger is not in use in source system: In this case, configuration settings are adjusted when executing the activities of “Preparation and Migration of Customizing for Material Ledger”, as we find them in the IMG so new data can be built to populate tables.
For now, we will be talking about what we could do (in advance), to improve our Material Ledger conversion process when it is up and running in source system.
First stop on our way is about Material Ledger high volumes of data.
If that is the case, I would seriously recommend consider archiving on some frequently highly populated tables like MBEWH. This table keeps historical information of changes on quantities and prices for all materials. Archiving old information be very helpful in terms of Material Ledger conversion steps (M10, M20) performance.
Second, let´s have a look on Actual Costing (whose activation is not mandatory in SAP S/4HANA).
When Actual Costing is in place as part of current business processes in SAP ECC (table T001W with at least one entry with field MGVUPD = ‘X’): One of the prerequisites (or let´s say a very important recommendation, along with some other financial tasks, like complete fiscal year closings, carryforwards, month-end closings and so on) is to have all Material Ledger costing runs finished with no abnormal terminations.
Why is this recommendation so particularly important?
- Once in SAP S/4HANA, those incomplete costing runs cannot be finished (due to changes in Material Ledger data model) and in consequence, postings will not be sent to specific G/L accounts, probably leaving (probably not) inconsistencies along the business process or, in the end, in prices of materials
- Execution of step M10 during FINS_MIG_STATUS will try to determine information which cannot be found (including those caused by unfinished costing runs). These additional tasks will add considerable extra-runtime to that specific step or extensive data completeness checks need to be done, also causing additional execution time.
Going back to Material Ledger data model changes (please refer to SAP Note 2332591 – S4TWL – Technical Changes in Material Ledger), some tables are obsolete once SAP S/4HANA is running, and some others still remain although accessible only thru Access Functions or Classes provided together with SAP S/4HANA releases, so changes in custom programs must also be considered.
Now, let´s move to the last-but-not-least side-effect of not fulfilling Material Ledger customizing settings at the time of Preparation activities:
As you probably know, a clean Simplification Item Check is the most important of the prerequisites to proceed with a system conversion, I mean, all messages need to be resolved before the Software Update Manager (SUM) starts its execution.
The following picture shows in which stages the Simplification Item Check is executed (manual or automatically):
Important to say here is when Simplification Item Check execution is getting closer to business downtime, some messages get more critical and in fact, could impact the conversion process (some of them could even become error messages, when the first Simplification Item Check showed them as warnings).
Material Ledger incomplete customizing settings could be an example of these behavior, when everything has been fulfilled and ready to proceed with data conversion, Simplification Item Check execution will be smooth and fast.
My last recommendation of this blog post is you please dedicate some time to collect reports, notes and KBA´s that could help a lot with Material Ledger (and the rest of business processes and innovations) that will guide you to a smooth and fluid system conversion cycle.
Special mention to SAP note
please first read and analyze the insights provided for some releases, with explanations and additional useful notes to fix frequent issues when transitioning to SAP S/4HANA.
I hope you like this content.
Please stay healthy and safe.
Brought to you by the S/4HANA RIG