In this blog post, you will learn about key changes involving the enhanced business place framework in SAP S/4 HANA.
The enhanced business place framework provides an innovative and highly flexible solution for managing tax reporting below company code level.
What is business place?
Business place represents a branch of an organization below the company code and represents a taxable unit in a province or region. A business place generally correlates to a geographic area, for example, a state, county, city, district, or province.
Each business place has a unique tax registration number. Business place is registered with a tax authority and can be used for electronic invoices and/or for tax reporting (for tax types such as VAT, GST, or WHT) to central or regional tax authorities.
- In central tax reporting, business place is an attribute that correlates to a region.
- In regional tax reporting, then business place complies with official document numbering rules and enables tax payment.
We currently use business place and it is working just fine – why change?
There are some significant factors that are driving the enhanced framework. Many tax authorities already require provision of selected tax reports below company code level. And this trend is gaining momentum. A robust business framework is essential as more and more tax authorities mandate regional tax reporting requirements.
In addition, many SAP customers have a global footprint and need a consistent and extensible solution to manage business place across their organization.
Finally, SAP already supports business place in 15 countries/ regions. But supporting different business place approaches between multiple regions and country implementations is not sustainable. To drive down maintenance costs and inefficiencies, an improved framework was needed.
Innovation and elegance – an enhanced business place framework
SAP has redesigned and redeveloped the business place framework to better meet current and future reporting requirements. The new framework has deep structural enhancements, code improvements, and cohesive integration with standard tasks and tax reports.
Central to the enhanced framework is a new concept called a scenario. A scenario is a bundle of related apps (or a bundle of related transactions) for common business processes, such as billing, accounting document processing, and cash journal processing.
How does this help our organization – what are the key advantages?
SAP customers vary greatly, and so do their business needs. Some SAP customers will use the enhanced business place framework across a wide range of business functions. For example, in sales, procurement, FI-CA, Concur, Industry Solutions. Other SAP customers will only use the business place framework for one or two scenarios. The enhanced business place framework provides flexibility for all customers to manage their unique requirements.
SAP provides a standard suite of tools to manage system logic and behavior, such as field validation and determination. The enhanced business place framework provides additional extensibility options so that organizations can extend the standard logic in their SAP S/4HANA systems.
The enhanced business place framework is delivered with a public API, which can be used to exchange business partner master data with other applications or web services.
This sounds great – but how much effort is needed to adopt this enhanced framework?
For existing SAP S/4HANA customers, the enhanced framework will be implemented automatically and without disruption to your operations. From the first day of the relevant release, the transition is managed for you so that your operations continue with minimal downtime. There is no need to migrate data, change configuration settings, or explain user interface changes.
- End users will see that business place is seamlessly integrated with their usual business processes.
- Configuration settings will be automatically determined, based on the existing settings for your organization.
- Key users will find that they have more sophisticated options available to manage scenario-level settings, and can implement additional integration, logic, and custom fields.
- Extensibility is easier to manage based on your specific needs and requirements.
For new SAP S/4HANA customers, the enhanced business place framework will be activated at country/ region level according to a roadmap. Once activated for a country/ region, business place is then enabled for predefined scenarios (SD billing, FI accounting document processing, and cash journal processing). Key users can activate or deactivate business place for these scenarios, based on their unique business requirements.
We use business place in other scenarios – are these covered?
No, not yet.
Some organizations use business place as part of Flexible Real Estate (RE-FX) or Contract Accounts Receivable and Payable (FI-CA) processes. These scenarios are not currently integrated with the enhanced business place framework. If your organization uses business place as part of these processes, there is no change to data, configuration, or operations; your use of business place within these processes remain unchanged.
In some cases, both the enhanced business place framework and existing business place models will operate in parallel:
- The enhanced framework will apply to defined scenarios in three processing areas: SD billing, FI accounting document processing, and cash journal processing.
- Existing business place models will continue to operate in other processing areas, such as RE-FX.
SAP plans to integrate more scenarios into the framework in future. And, as additional scenarios are integrated, the existing models will be successively replaced. However, given the deep data considerations and integration requirements, there will be no replacement until integration is complete.
Note that if you are using business place in a country/region where business place is not officially registered, then there will be no change. However, the enhanced framework will not be available for use.
SAP currently supports business place in 15 registered countries/ regions.
In upcoming SAP S/4HANA releases, each of these countries/ regions will be transitioned to the enhanced business place framework. This will be explained for each release in the What’s New announcements and in the SAP Help.