Comparing Ledgers Using Universal Parallel Accounting
In this blog post for SAP S/4HANA Cloud I will explain how you can compare different ledgers using Universal Parallel Accounting, for example, material price ledgers.
I will explain the prerequisites, the capabilities, and the restrictions. If there is anything that you would like to clarify, please comment under this blog post and I will be happy to answer your question.
Value chains for international organizations span across the globe, this includes supplying from 3rd party vendors or affiliates, producing in intercompany locations, and involving subcontractors or 3rd party carriers for transportation. International organizations are also exposed to complexities of multiple currencies and valuations. They are required to present the financials not just from a legal perspective, but also from a group perspective, eliminating transactions between the affiliates.
The process for managing multiple valuations for such organizations was available with the parallel Cost of Goods Manufactured Solution (COGM). However, the solution was complex, so a new solution was introduced for ease of use and to rectify other challenges.
Universal Parallel Accounting, a harmonized and simplified way of managing parallel valuations, provides a different ledger per accounting principle as a universal solution for general ledger and all other subledgers including assets and inventory. This ensures full alignment between financial and management accounting and enables improved and extended currency management.
For more information, please see the following blog post:
Since ledger is the underlying solution for multigap reporting based on Universal parallel accounting, it also solves some of the following business imperatives based on the new solution:
- It allows comparison of Trial Balance across 2 accounting principles in general ledger.
- In Overhead accounting area, overhead accountant can view activity price in parallel ledgers. Cost allocations will run per ledger, for example, values that need to be allocated/ settled are calculated per ledger to ensure the sending objects are balancing to zero in all ledgers. If you are using activity allocations, actual cost rates will also be calculated ledger-specific.
- In inventory accounting, inventory valuations differ across different accounting principles, for example, legal and group valuations. A report showing differences in material valuation across multiple ledgers would enable an Inventory Accountant to check if the values are correct or if any rectification is required for Inventory Values. Many customers expect a similar material price across multiple ledgers. A comparison between ledgers enables an inventory accountant to review material prices to check if all the materials have been costed correctly or need to be costed.
- In Margin analysis, you can compare different views on Product Profitability based on different valuation views such as Legal, or Group views.
- In the Production Accounting area, it is possible to compare Actual Costs, Work in Process (WIP), and variances in different ledgers, for example, between a legal and a group view. With the enablement of Universal Parallel Accounting, this reporting capability simplifies the job of a Controller who needs the real-time information across ledgers.
Multi GAAP reporting capability is enabled in the standard SAP Fiori application and extensibility approach:
First, the two examples below show SAP delivered the standard SAP Fiori application Product Profitability with Production Variances with multi-ledgers capability by default. For detailed information please see the following:
In the standard SAP Fiori application Display Cost Rates, activity cost rates are displayed in multi-ledgers.
Now let’s look at some examples of how the extensibility capabilities can be used to create a report based on comparison of ledgers using Universal Parallel Accounting. The first example we will look at is the material price difference report.
You will need to know the correct data source, and only the released CDS view can be used as a data source if you would like to create a custom analytic query.
To view all the CDS views you can go to the View Browser app (App ID F2170) on the SAP Fiori launchpad.
Material standard price difference by ledger
Please add the business roles: SAP_BR_ANALYTICS_SPECIALIST and SAP_BR_INVENTORY_ACCOUNTANT to your user, the first one is needed when accessing the app Custom Analytical Queries (App ID F1572), the second one is required when loading data from source CDS: I_InventoryPriceByKeyDate .
In the SAP Fiori launchpad go to the app Custom Analytical Queries, and choose New to create a new query. Enter the query name, for example, YY1_MAT_PRICE_LEDGER_DIFF, choose the data source I_InventoryPriceByKeyDate, press OK to create the query. On the General tab, you can specify the label.
Now go to the ‘Field Selection’ tab. Here you can select all the fields except the measure fields INVENTORYPRICE and Standard price, which will show in the front end of your app.
Under the ‘Display’ tab define the row and the column in the different fields. The Display icon indicates whether a column is shown in the report. The Filter icon indicates whether a fixed value filter is defined for this field.
Select Up/Down to reorder the fields within a Row/Column/Free section. Choose Row/Column/Free to quickly move across the section. Move fields Material, Valuation Area, and Curr/Val Type into Row section, and click the Add button to create three measures in the Column section.
You can add your own fields here, for example restricted measure or calculated measure.
Let’s say you add a new restricted measure called ‘Standard Price in 0L’ where you can define the static label. Under ‘Measures’ you can choose measures for standard price (or inventory price), and filter by 0L.
The second restricted measure is for ‘Standard Price in 2L’. Filter by 2L. After you have added your two restricted measures, then add Calculate Measures called ‘Standard Price Diff (0L<> 2L)’, for example, to calculate the price difference. You can see the calculation under ‘Expression’ in the right side, click Edit button, and add a formula for the measures, for example, ‘ABS (“Standard Price in 0L” – “Standard Price in 2L”)’.
Here you can change the Calendar Date filter to User Input and choose ‘Today’ as your default value. The Calendar Date used to specify the date on which the standard/inventory price is valid.
the default value ‘1010’
You can highlight this difference by using a different colour. Under ‘Measures’ you can choose ‘Manage Exceptions’. Let’s say the difference is zero, we can colour this rule in green. You can do this for differences greater than or lower than zero. This helps when you want to filter by differences greater than 10, for example. This gives a good visual representation. You can save this variant as a bookmark for ease of use in the future.
You can replicate these steps for use with Event-Based Production Cost by Ledger (data source: I_ActualPlanJournalEntryItem, required business role: SAP_BR_GL_ACCOUNTANT).
It is not possible to create multi-ledger comparison when the alternative fiscal year variant is used in one of the compared ledgers.
Now you understand how the reports can be created by power users based on Universal Parallel Accounting.
The above examples should greatly simplify the job of an Inventory & Production accountant. You have learned how to compare different ledgers using Universal Parallel Accounting. We looked at how activity rates are displayed in different ledgers, and I showed you how you can look at different views. We explored how extensibility capabilities can be used to create a report based on comparison of ledgers using Universal Parallel Accounting.
If there is anything that you’re unsure of, or would like to clarify, please comment under this blog post and I will be happy to answer your queries.