Fiscal Year Changes. Customers are looking for advisory
Problem: How can you address a proper consulting or conversion service and get support from SAP when you need to changes on your actual FY variant setup?
Which services exist? What do you need to consider? How complicated is it? What is the customers contribution and effort?
And sometimes most important: When do You need to start action?
Existing FY Services:
Kindly distinguish between the two mere future oriented consulting activities, the change of fiscal periods and a introduction of a shortened fiscal year , or even if you need both consulting services in a combination. No tool in play, only pure SAP know how collected over the previous decades, condensed, focusing on the technical aspects how to prepare your system. Proven experience and experts.
Customers might ask for a Fiscal Year -1 conversion as to renumber the Fiscal Year to appear as the same number like the Calendar Year
This is your entry point to address the right people in SAP to help you along.
You are very welcome to contact us directly via Mail, or open a incident in CA-LT-SRV component on this.
Our central global customer engagement e-mail address: SAP_DMLT_GCE@sap.com .
What is important to know from a technical point of view, so you know what is possible, what is problematic, what dependencies you may keep in mind, and what is a myth?
About Shortened Fiscal Year and Change Fiscal Period consulting service, myths and facts
The most prominent myth: It is NOT possible to have a prolonged fiscal year within a SAP system. You cannot go for a extended ‘prolonged’ Fiscal Year in internal reporting. External FY end reporting can be created 'as if' prolonged, yes, but not the internal SAP system technical setup. Depreciation and Asset Accounting cannot handle this. Regardless which system release and layout in SAP ECC or S4H. You can produce a external FY end report on P&L, Balance, AA that goes over more then 12 periods (or less) – but technically, a Fiscal Year runs some 12 month maximum. Thus: You cannot bypass technically the need for a true shortened fiscal year introduction, when you must change the fiscal year start and end date in the system.
Shortened Fiscal Year and Change Fiscal Periods are key date dependent changes, that you can only conduct for a future that is yet to come, and since you don't like stress, contact us in time. Plan a lead-time of some 3 months minimum, wherever possible. Plan early, life is easy. Reverse introduction or even reverse adaption of already posted data is a myth and subject for Captain Kirk science fiction.
You cannot be selective on participating company codes within one and the same controlling area, or controlling areas sharing one and the same operating concern. It is always an ‘all or nothing’, since the FY variant has to be unique per named organizational hierarchy element, coming down from the operating concern.
The FY variant name, K4 or V3 or V6: it is typically just a naming convention, a text field, a shell which says nothing about the true customizing content behind the name. When we help to introduce a SFY or a CFP service, we typically do not change the FY variant name as long as we do not need to do so. This is best practice to protect your business to run normal. We only change the FY variant name, when it is technically enforced, e.g. not all K4 controlling area/operating concern participate in a shifted fiscal year project. It is best practice, to keep a variant name, not to assign all affected org-units to a newly to be specified FY variant, as long as we do not have such a ‘selective’ divider. By doing so, you save a lot of modification work in depending downstream systems in the follow, also other risks are minimized by doing so.
Testing the future by playing with Sy-Datum is not a good idea. Though it is technically correct when one is saying, that some test cases can be only conducted when you modify and play with Sydatum in a SFY or CFP project, we strongly advise not to play with Sydatum. The majority of test cases can be done without Sydatum changes. The benefit versus risk assessment comes from our experience to a clear expression: don’t play with Sydatum.
About Fiscal Year -1 conversion (or - 2 or +1)
Fiscal Year number deviation to the actual Calendar Year number after a shortened fiscal year introduction with the consequence of a deviation between Fiscal Year and Calendar Year is not a drama! SFY introduction, mostly when going back to Gregorian FY from a shifted FY, may cause that your FY is one year ahead to Calendar Year, as the SFY causes the FY counter in SAP to go up by plus 1. No, this is not worlds end. Take your time after your SFY is over. Monitor, if you have true and real technical problems which qualify for the need to start also a FY-1 conversion project.
FY-1 is kind of a convenience service. It is key date independent, and should be seen and ordered exactly like this. If you come to the conclusion you need it, we can help, but anyone telling you that you have to have this is maybe pointing to the emotional need of some employees, but not the technical need.
Please, avoid adventures by surprising your auditors and the stock market in having a Shortened Fiscal Year AND a Fiscal Year conversion in one and the same Fiscal Year. Do always get first your legal and auditor agreement when changing your future FY flow. Beside the logistical and rational understanding on changing fiscal years in your system, there are technical conditions:
Condition for a FY conversion is, same like for SFY, that auditors and legal have approved and acknowledged this. And also: your last fiscal year has to be closed and audited, too (no more posting changes), before you can conduct a FY-1 conversion for your actual running fiscal year. In case your actual fiscal year shall be already the SFY, think it over what this means for the requirement on closing the last fiscal year before the fiscal year where you run the fiscal year -1 conversion. You might run into time trouble, when your SFY is short, too short, as to hold a FY-1 conversion project time, which can be easily more than 3 month.
Think what it means on open items or carry forward items or your depreciation that was issued in the last fiscal year, maybe before it becomes a SFY, maybe before it is set back by minus 1 in addition. That later becomes technically then a fiscal year before that…And now think, that the SFY should be fully in place in production, before you can do a fresh copy from production as to launch a FY-1 project.
Visualize your steps, eliminate obstacles one by one after the other! Plan it step by step, carefully one step after the other. Do not take step 2 before step 1. Get an architect and business experts, as to cover all aspects of future readiness:
Need for special ledger, new G/L introduction or additional new G/L scenarios to be implemented, because of the need for deviating fiscal year variants for one and the same company code is raised?
You should have informed yourself about local legal requirements for the company codes in question, when it comes to statutory reporting requirements per country, e.g. specialties for Poland, Russia, India, China, Brazil or any other local legal specialties that need to be tackled.
And you should be aware, how a SAP legacy system can help you to fulfill such local reporting requirements, and where technical limits exist, depending also on your actual system release and setup.
Further aspects may result in complication or impair on your planning, where you should plan FY changes in good times, have a master plan cross over as not to run into time constraints:
You want to merge Controlling Areas, but because of deviating fiscal year variants per CA, you first need a SFY as to harmonize plus eventually a FY-1 conversion and only then the CA merge
You want to merge company codes or even multiple system clients, but same like for point 1 – you first need a harmonized FY Version landscape, and then you may adress us for the merge or carve out or even even company code deletion
You like to harmonize currencies e.g. by introduction of a Group Currency in FI/CO, but your CO Area is a historical grown mess and must first be harmonized in itself, e.g. via FY harmonization of CO Areas before you can first merge them, and then introduce a common Group Currency..
We have technical limits how to handle deviating fiscal year variants for one and the same company code, be it in SL or New G/L with non-leading ledgers. And also in S4H yet.
Refer to SAP notes See SAP note 844029 about limitations for changes on the fiscal year variant in ECC
In S4H, refer to SAP Note 2220152 - Ledger approach and Asset Accounting (new): Alternative fiscal year variant for parallel valuation
AND SAP Note 2490222 - Additional Explanation to SAP Note 2220152: Alternative Fiscal Year Variant / Parallel Valuation / Period Determination / Reporting
So, coming from these notes and remarks, know your limits in a SAP legacy system:
You cannot do 100% proper statutory reporting in leading and non-leading ledgers for one and the same company code when you run a month like period flow side by side to a 4-4-5 flow, regardless if you do so in ECC and S4H.
Reason: What is defined in the leading ledger, overrules in FI-AA, and this hits hard when period ends are not overlapping. So this is worse when the periods do not end on the same month date.
A solution for this is anticipated for New AA 4.0, but the release of that solution in S4H is actually not yet announced
The good news as your take away:
In ECC, the SFY or CFP services are rather straight forward technical advisory, based on a implementation guideline, that the majority of our customer can use for their project.
The implementation guideline serves as a cookbook, intended for trained customer FI-CO cooks, and we are not talking about rocket science here, as long as no rockets are in play. We run the mere consulting service roundabout 80 to 100 times per Year, over the past 30 Years.
Experts from DMLT and from LOB Finance support you, when you like to get implementation works done by SAP as well. We are at your service, if you wish as much end to end service as you can get.
For the S4H world, the guideline plus also the implementation work by SAP is not a question, but offered per default. Implementation by SAP is actually not yet negotiable as to be taken over by 3’rd party consulting or customer itself, in some 2 Years from today, this should be different.
This is, as to ensure that our cookbook is crosschecked and validated by SAP itself for S4H, as long as the maturity degree in the S4H world is not the same as in ECC.
A Fiscal Year - 1 project is not a 'must have' but rather a convenience service. Take your time to decide, when and where to place it.
FY-1 is a kind of key date independent service, but of course a DB conversion project, and as such, pretty much more complex and expensive than you have a shortened fiscal year being introduced, e.g. when you need to think about Archives, BI, SRM, legacy system to be converted, too.
All the best, hope this helps, Uwe
