Universal Allocation in SAP S/4HANA 2021
(Created as of release SAP S/4HANA 2021)
This blog post provides you enhancement information on Universal Allocation based on SAP S/4HANA 2021 on-premise. If you interested in Universal Allocation in SAP S/4HANA 1909 and 2020, please see SAP blog post (1909) and SAP blog post (2020). Now let’s focus on the harmonization of allocation functionality within SAP S/4HANA on-premise and you will see how Universal Allocation impacting the area of Financial accounting and Management accounting.
From a planning and budgeting perspective, a first step towards a single allocation model and execution framework was launched as Universal Allocation with SAP S/4HANA 1809 on-premise focusing on Cost center planning. Universal Allocation is new allocation functionality and plan data is stored in ACDOCP table.
With SAP S/4HANA 1909 on-premise, Universal Allocation was enhanced. It is not only used to cover the Actual overhead allocations in addition to the Plan allocations use case that was already delivered with SAP S/4HANA 1809 on-premise. The same Universal allocation is also the basis for molding and executing Top-down distribution of Margin analysis with SAP S/4HANA 1909 FPS01.
With SAP S/4HANA 2020 on-premise, existing Fiori apps were enhanced with new features and new Fiori app “Allocation Flow” was released.
With SAP S/4HANA 2021 on-premise, existing Fiori apps were enhanced with new features and new Fiori app “Manage Cycle Run Groups” was released. The same Universal allocation is also the basis for molding and executing Intercompany Allocation and Allocation to Margin Analysis.
- Universal Allocation does not cover all of the use cases mentioned in the “Vision” slides (“Our vision of Universal Allocation” and “Process harmonization driven by the Universal Journal”).
- There is no new feature on Universal Allocation with SAP S/4HANA 2021 FPS02.
- No future additions on Universal Allocation will be ported down to SAP S/4HANA 2021 on-premise.
Before going into the details, let’s have a look at motivation of Universal Allocation.
As you can see above slide, companies struggle to oversee their complex allocation process and have difficulties to analyze the result. It’s challenging to get a full traceability and clear understanding on how specific costs are allocated through their specific area of responsibility. As a result, there’s a necessity for state-of-the-art visualization for both the allocation process as well as the results after the execution. In addition to the overall need for a process transparency and results traceability, today’s companies need the ability to simulate how would the results look like by changing allocation rules on their financial data.
As you can see above slide regarding “Our Vision of Universal Allocation”,the overall aim is to simplify Allocations by combining various capabilities under one umbrella providing a single architecture for financial and managerial Allocations, like Cost center allocation, Profit center allocation, Top-down distribution, Intercompany allocation, Allocation to Margin Analysis and so on. A combined approach for actual and plan including simulation capabilities and predictive data as well. Executing this commonly structured Universal Allocation is to include all required reporting currencies providing full traceability of the entire value flow.
As you see right-hand side, Blue parts are in the scope of Universal Allocation (Yellow parts are out of scope). An important note to make is that Universal Allocation is not initially designed for activity allocations nor different types of settlements like for IO and WBS elements.
On the left-hand side, there are many transaction codes for different types of Allocations in SAP ECC. This caused the complexity of Allocation functionality. When we look at Vision of Universal Allocation, on the right-hand side we expect to see 10 Fiori apps to cover transaction codes in SAP ECC.
As of SAP S/4HANA 2021 FPS00, 5 Fiori apps are available.
- Manage Allocation
- Run Allocation
- Allocation Results
- Allocation Flow
- Manage Cycle Run Groups (New with SAP S/4HANA 2021 FPS00)
Additional application already identified for future development:
- Manage Allocation Tags (planned with OP 2022)
As you can see the above slide, it summarized Current Scope of Universal allocation in SAP S/4HANA 2021.
Cost Center allocation is enabled for both Actual and Plan data. New type “Intercompany allocation” for Actual data enabled with SAP S/4HANA 2021 FPS00. “Intercompany allocations” for Plan data enabled with SAP S/4HANA 2021 FPS01.
Profit Center allocation is enabled for both Actual and Plan data.
“Allocation to Margin Analysis” (Overhead allocation and Distribution to Margin Analysis) for both Actual and Plan data enabled with SAP S/4HANA 2021 FPS00. Top-Down Distribution for Actual data is enabled.
For details, please see SAP Help for SAP S/4HANA 2021:
Currently cycles are defined with respect to a ledger and single company code*.
(* Please note: There are exceptions. Regarding Top-Down Distribution cycles, where it is defined by Ledger and Controlling Area (since you can use multiple company codes in definition of the cycles). Also Intercompany Allocations are defined with respect to multiple company codes (directly as company codes in the sender definition of each segment, indirectly through the receiver objects))
<Available Fiori Apps in SAP S/4HANA 2021 on-premise>
With SAP S/4HANA 2021, existing Fiori apps were enhanced with new features and new Fiori app “Manage Cycle Run Groups” was released. Useful Features of Fiori Apps are described in below.
Manage Allocations app:
- Single point for maintenance of allocation cycles and segments
- Initial screen provides list report of existing cycles for all authorized contexts (If user is authorized only for cost center allocation, other contexts are not available for user)
- Multiple types of allocation rules manageable on segment level
- Where used function available for multiple type of objects (Cost Centers, Profit Centers, Statistical Key Figures)
Run Allocations app:
- Single point for triggering allocation run
- User can define Run worklist containing standalone cycles or cycle groups
- Cycle groups can be defined in Manage Global Hierarchies Fiori Application
- Order of cycles in worklist defines order of processing
- The journal entry type can be selected for Live Run of Actual data in Profit Center context. For others, it is determined automatically
- New run type “Reversal” was introduced with OP 2021. Reversal Run can be triggered in Run Allocation app and logged in Allocation Result app. Due to specifics of Reversal Runs, there is only limited result report for such run jobs
Allocation Results app:
- Provides analysis over the completed Allocation Runs/Test Runs
- 3 user views:
- By Run – list of completed run jobs and statuses, so as drill down to detailed run report
- By Cycle – view of cycles run statuses for selected fiscal periods
- Run Report – Run report provides details of sender, receivers journal entries and messages. Run report contains also new Network Graph control for visualization of allocation interactions between senders (on the left side) and receivers (on the right side), with filtering option on both sides of relation
Allocation Flow app:
- Generic analytical app for displaying interaction between multiple object types in allocation process
- App provide multiple perspectives (view types) on data
- Key elements are Network graph control & T-Account control
- Following view types available:
- Cost Center
- Profit Center
- Direct Activity Allocation
- Fund & Grant (Public Sector only)
Manage Cycle Run Groups app: (New Fiori app released with S/4HANA 2021 FPS00)
- Concurrent execution – The run groups allow to steer which cycles can be run concurrently by the users themselves, based on the data on which the cycles depend
- Speeds-up allocation process during period close activities
- Cycles organized in run groups determining processing mode
- Cycles assigned in same run group must be processed sequentially. Cycles in different groups can be processed concurrently
- New app Manage Cycle Run Groups – for maintenance of Cycle Run Groups and so as for assignment of cycles into groups
For details, please see SAP Help for SAP S/4HANA 2021: What’s new: Universal Allocation at first.
The below is additional information for new features/functions.
Allocation to Margin Analysis (profitability segments)
- Only a Minimal Viable Scope (MVS) is available in OP 2021
- Allocation type “Overhead Allocation” and “Distribution” enabled in Margin Analysis context
- Allocation from cost center to profitability segments
- Both Actual and Plan allocation available (with OP 2021 FPS00)
- These types enabled also in excel upload template
- Fully supported in Allocation result report (including Network Graph visualization)
- Supported only for operation concerns which are enabled exclusively for Margin Analysis (Must be enabled neither for costing-based CO-PA nor for combined COPA)
- Attributed reference data is considered by default
- Extensibility – Allocation to custom fields on receiver side enabled
- Custom Fields are supported and can be created with the Key-User Tools in the “Business context – Accounting: Market Segment” (See SAP Help)
- New Allocation type ”Intercompany Allocation” enabled in Cost Center context
- Allocation from cost center(s) in one company code to one or multiple cost objects (cost centers or WBS elements) in other company codes
- Both Actual (with OP 2021 FPS00) and Plan (with OP 2021 FPS01) allocation available
- Only supported within one controlling area
- Only one sender company code per cycle segment (see below screenshot)
- It is not possible to mix Intra- and Intercompany Allocations within one Cycle
- The Intercompany Allocation posting has to be taken as a prima nota.
- Allocation can take place (and cycles can be defined) only on leading ledger and values are calculated based on leading ledger
- During allocation run, the result is copied(posted) to all other standard ledgers (parallel ledgers)
- However, postings will only occur for valid combinations of company code and ledger. If a company code is not assigned to some non-leading ledger, there will be no document for this combination
- Important prerequisites (configuration related):
- Providing mapping of overhead allocation accounts to clearing accounts (billing)
- Enable (permit) intercompany allocation between company codes
- P&L clearing accounts of type (N) are recommended. If no P&L clearing accounts are configured, Intercompany Allocation takes OBYA as a fallback
- The Universal Allocation cannot post to open-item managed accounts as a general restriction. In particular, customer/vendor accounts in OBYA are not supported
- SAP Help: Intercompany Allocation
- Embedded in RRICB* process with OP 2021 FPS00 (RRICB*= Resource Related Intercompany Billing)
- Refer to SAP Note 1447123 – Enhancement: Resource-related billing between company codes
- Refer to SAP Best Practices for SAP S/4HANA Cloud: Intercompany Billing for Cross-Company Cost Accounting Postings (4AN). The Scope Item 4AN is currently only available for SAP S/4HANA Public Cloud as Best Practice Content. However, the scenario does also work in on-premise
- Refer to SAP Blog: Intercompany Cost Allocations in S/4HANA Cloud. Even though it is for SAP S/4HANA Public Cloud, it would be helpful to understand RRICB process
New Features and Functions in Fiori Apps
Let’s have a look at some of new features/functions in below.
Iterative processing of allocation cycles
- Iterative processing enabled in Cost center / Profit center contexts
- Check-box in cycle general information section
- Once checked, segments in cycle processed iteratively
- Note: Iterative cycle setup requires user experience and even in that case, result of iterative processing can be hard for interpretation
- See SAP Help: Iterative Processing Cycle
- Provides simplification in allocation setup and enables multiple overhead Accounts processing in one segment
- Enabled for overhead and intercompany allocation types
- Structure selection field in segment rules section
- Compatible with posted amounts sender rule only
- Respective customization of structure required
- See SAP Help: Allocation Structures
Flexible Ledger Cycle
- Flexible ledger handling concept enabled in allocations
- User can define cycle in one ledger, but process it in other ledger(s)
- This feature does not allow to post results from one ledger to other ledgers; still, such a cycle is executed for each (standard) ledger individually and independently. This is still true when giving multiple ledgers in the run dialog
- User can select multiple ledgers for the run and in that case, separate run job for each of ledgers is triggered. (e.g. if user selects ledgers 0L, 2L, then 2 run jobs are triggered, for each ledger one)
- Available cross contexts/types except Intercompany Allocation
- Extension ledgers are not supported (Standard ledgers only)
- See SAP Help: Flexible Ledger Cycle
Schedule Allocation Run
- Run allocation templates enabled for scheduling (one for each role)
- Solution built on generic scheduling framework
- Dedicated apps for Profit Center and Margin Analysis contexts
- For Overhead accountant, tile with navigation to be provided by customer (generic app not available for role overhead accountant)
- Result of scheduled run can be checked in Allocation Result app
- See SAP Help: Scheduling Allocation Runs
Manage Cycle Run Groups Fiori app
- As mentioned above, this app can be used for maintenance of Cycle Run Groups and so as for assignment of cycles into groups to enable concurrent execution
- See SAP Help: Manage Cycle Run Groups
Cross Component Functionality so called Situation Handling is available in Universal allocation from SAP S/4HANA 1909 on-premise. As of now, Situation Framework notifies user if error/warning occurs. There is no additional feature for Universal Allocation with SAP S/4HANA 2021 but more enhancements are planned with future release.
For details, please see SAP Help for SAP S/4HANA 2021:
- Situation Handling
- Situation Handling Videos -> Finance -> “Errors and Warnings in Allocation Runs”
- Situation Template: Errors and Warnings in Allocation Runs
SAP Help for SAP S/4HANA 2021:
SAP Fiori Apps:
- Manage Allocations (App ID: F3338)
- Run Allocations (App ID: F3548)
- Allocation Results (App ID: F4363)
- Allocation Flow (App ID: F4022)
- Manage Cycle Run Groups (App ID: F4935)
SAP Best Practices for SAP S/4HANA (on-premise):
SAP Best Practices for SAP S/4HANA Cloud:
- Intercompany Billing for Cross-Company Cost Accounting Postings (4AN)
The Scope Item 4AN is currently only available for SAP S/4HANA Public Cloud as Best Practice Content. However, the scenario does also work in on-premise.
SAP Notes (relevant for SAP S/4HANA 2021):
- 3091209 – Authorizations in Universal Allocation for OP2021 SP1
- 3092820 – Universal Allocation: Show messages which happen during the posting process
- 3092822 – Universal Allocation – Exchange authorization object
- 3093095 – Universal Allocation – Functional currency
- 3082912 – Manage Allocations: User is not able to save cycle with Percentages
- 3089693 – Manage Allocations: User not able to copy Plan cycle for Intercompany Allocations
- 3095837 – F3338 Enable Flex. Ledger and Iteration for ICO cycles
- 3096676 – Manage Allocations: User is not able to save Overhead Allocation Account in Excel Upload
- 3097379 – Manage Allocations: User cannot save a field without assigned Value Help
- 3101040 – F3338 Manage Allocations – Overhead Allocation Account
- 3101317 – F3338 – Enable planning Intercompany Allocation Cycle
- 3102791 – Manage Allocations raised an error after save of Plan Cycle with Var. Portion
- 3105626 – Manage Allocations: Allocation Cycle End Date added to Copy Cycle dialog
- 3106229 – Manage Allocations – enable primary and secondary account for profit center context
- 3108183 – Manage Allocations set Assessment account before combinations build
- 3111030 – Invalid value in receiver rule
- 3123108 – No CO availability control for universal allocation
- 3124970 – Manage Allocations: TDD Template fields does not have Value Help
- 3130916 – Manage Allocations: User is not able to upload Excel with Group Values
- 3133709 – Manage Allocations: User does not see all configured fields in tabs
- 3134150 – Universal Allocation: Intercompany cycles allow sender cost centers of wrong company code
- 3138264 – F3338 Share in Percentage disappears
- 3139732 – F3338: User does not see all Custom Value Helps
- 3143210 – F3338 Incorrect Combinations
- 3145661 – Manage Allocations – allow to save 0 in the Receiver Weigthing factor tab
- 3147841 – Manage Allocations: Technical note which delivers method for Iteration Flag optimization
- 3148200 – Manage Allocations: Product Hierarchies Value Helps
- 3163772 – Manage Allocation: Combination builder performance optimalization
- 3164149 – Manage Allocations: Filter is not working for Custom Hierarchy fields
- 3166590 – F3338 Manage Allocations Remove Revenue Cost Element
- 3166666 – Manage Allocations missing Value Helps for Profit Center, Cost Center and TDD Template fields
- 3167733 – F3338 Distribute Equally does not work for Intercompany Cycle
- 3189753 – F3338 Manage Allocations wrong ledger read in draft mode
- 3194904 – Manage Allocations: Excel Template extended by Manipulation Rule
- 3200274 – Manage Allocations: Invalid validations for GLCYCLE (Cycle Name)
- 3206332 – Manage Allocations: User is not able to Upload Custom fields
- 3206873 – Manage Allocations: User with correct authorizations is not able to create a cycle
- 3211102 – Uni Allocation – Info message for locked cost centers
- 3098105 – Universal Allocation – Preliminary save after document booking
- 3100233 – Execution of an allocation cycle with Fiori app “Run Allocations” is blocked by error message FINS_BTTYPE_CHECKS-001.
- 3110513 – Market Segment Extension Field Vlaue Missing in TDD Post Document
- 3134591 – Universal Allocation: Save reversal error messages from RWIN
- 3148895 – Run Allocations: Duplicates in Allocation cycle groups
- 3201965 – Universal Allocation: Check to reverse all periods for a plan cycle
- 3201970 – Universal Allocation: Dedicated reference document number per period for plan cycles
- 3205489 – Uni Allocation – Avoid getting number range when test run
- 3217655 – Universal Allocation: Enhance plan cycle reversal check with execution ledger
- 3087487 – F4363 Allocation Result: Filter for column “Message Text” not working
- 3094462 – Allocation Results – start date and time merged into one column
- 3097950 – Submit Universal Allocation results before committing changes to the data base
- 3126050 – Allocation Results – Cycle view and network graph corrections
- 3193117 – Allocation Results: Missing Journal Entry lines
- 3087679 – F4935: Enablement of Plan Cycle Run Groups in Intercompany Allocation
- 3090564 – F4935 Manage Cycle Run Groups: Update of Authorization checks
- 3103426 – F4935 Manage Cycle Run Groups: Validation Checks
- 3105163 – F4935 Manage Cycle Run Groups – Authorization issue
- 3122597 – Manage Cycle Run Groups: New authorizations
Universal allocation is under development and currently does not support:
- Cumulative Cycles (planned with OP 2022)
- Allocation to IO (Internal orders as a receiver)
- Custom fields are still not yet fully supported (but only partly supported. Namely Margin Analysis extensibility – Allocation to custom fields on receiver side enabled)
- Cycles are defined with respect to ledger and single company code (As mentioned above, Top Down Distribution is exception, since instead of company code, there is controlling area as part of cycle definition. Intercompany Allocation is another exception, since it is defined with respect to multiple company codes)
Finally, I would like to thank experts at SAP for their support.
Brought to you by the S/4HANA RIG