Classic vs newGL Profit Center Accounting #1

Classic vs newGL Profit Center Accounting #1

Overview


With SAP ECC, SAP introduced a new architecture for SAP Financials. One of the key features is the “merger” Classic Profit Center Accounting (EC-PCA) with General Ledger. This brought SIGNIFICANT benefits to customers in terms of faster period close.This is the first in the series of four blogs on comparison between Classic Profit Center Accounting (EC-PCA) and newGL Profit Center Accountingm (newGL PCA). EC-PCA is supported as a SAP standard Special Ledger 8A. This means that Special Ledger 8A has to be manually synchronised with General Ledger 0L. This synchronisation is a “periodic” processing task and causes longer month end cycle. The processing is fraught with coding errors, inconsistent program code execution, calls to SAP support; all this caused delays in closing EC-PCA. With newGL none of these month end processing tasks is required. This blog looks at how the newGL way of doing Profit Center Accounting compares to the Classic way of doing Profit Center Accounting. It will provide insights of how the newGL Profit Center Accounting achieves the same results with lesser effort.

 

Assumption for this blog

You should read my blogs on newGL to gain an understanding of the concepts around newGL. I will repeat some of the concepts only so far as they support the purpose of this blog. For detailed explanation, I would suggest you refer to the blogs on newGL.

http://veritysolutions.com.au/category/sap/newgl-sap/

Hence, for the purpose of this blog, I will assume you are conversant with newGL features. I will assume you have activated newGL and all features within newGL related to Profit Center Accounting (like document splitting, self-balancing, real time COFI reconciliation).

 

What am I demonstrating

In this blog, I intend to compare newGL Profit Center Accounting with Classic Profit Center Accounting and thereby glean the benefits accruing to customers by activating newGL Profit Center Accounting.

 

Technical Architecture

Classic EC-PCA used (Special Ledger) tables GLPCT, GLPCA, etc

In newGL, the GLPCT, GLPCA, etc tables are replaced by newGL tables FAGLFLEXT, FAGLFLEXA, etc. There is no need to “transfer” data from General Ledger to Profit Center Accounting.

To understand the table and technical architecture of newGL better, please read blog Architecture of SAP newGL.

 

Profit Center Master Data

The Profit Center Master data maintenance transactions have moved from Classic EC-PCA to General Ledger under menu Master Records >Profit Center. The transaction codes have been retained.

 

GL / cost element groupings

newGL PCA uses General Ledger accounts and Financial Statement groupings. Hence, Revenue/ Cost Element and Account Group master data under Classic EC-PCA are no longer required to be maintained separately for Profit Centers.

 

Reports

newGL General Ledger has a suite of new reports that use Profit Center as a selection criteria. Reports can now be run (for example) using a range of GL accounts and Profit Center, very similar to what is possible in EC-PCA. However, I found that some of the reports are not very neat – in some cases the header title is missing. newGL General Ledger has functionality to allow users to create Drilldown reports; similar to EC-PCA functionality. newGL report use table FAGLFLEXT; Classic EC-PCA uses tables GLPCT.

 

PCA documents

Classic EC-PCA allowed users to create stand-alone Profit Center documents. This is no longer required under newGL Profit Center Accounting. Under newGL, if you want to perform any adjustments/ corrections to Profit Centers, you could perform an allocation (Distribution or Assessment) in General Ledger or simply post a Journal entry.

 

Use of Statistical Key Figures

Statistical Key Figure Master Data that appears under EC-PCA have not moved to newGL General Ledger. General Ledger uses the Statistical Key Figure master record maintained in Cost Center Accounting as the Master Data. Even under Classic EC-PCA, the transaction code for Statistical Key Figure under EC-PCA is the same as those under Cost Center Accounting.

Users can now post Statistical Key Figure data in newGL General Ledger > Statistical Key Figures. The screen layout looks different because as compared with Classic EC-PCA version, period is not “modifiable” data in newGL PCA. Version for all Profit Center documents is “1”. General Ledger derives period based on dates.

 

PCA Allocation

PCA Allocations (Assessment and Distribution) have also moved to newGL with similar features with slight modifications for newGL. Version for assessment is “1”. The Assessment cost element is replaced with Assessment account, which could be a Profit & Loss account but not a cost element. The blog “Overhead Allocations in SAP newGL” has a more detailed explanation of PCA allocation in newGL and comparison with Classic EC-PCA.

 

Configuration

Classic EC-PCA has additional tables to configure to enable Special Purpose Ledger and the flow of data from other SAP modules to Profit Center Accounting. All these are now redundant. All relevant configuration differences have been discussed in the relevant sections.

 

Next Blogs

In the next blogs, I will review the process of transfer of data from General Ledger to Profit Center Accounting, the dummy profit center and the balancing of profit centers.

 

Conclusion

After working in Classic EC-PCA for several years, I found newGL very refreshing and easy to use. All the technical and “unexpected” errors with Classic EC-PCA are no longer a worrying factor in month end close. One of the key aims of SAP ECC is to expedite month end close by eliminating some of the technical jobs to synchronise databases. That aim is well achieved with newGL Profit Center Accounting. Most of Profit Center Accounting happens in the background.

For customers who are on Classic EC-PCA and want to migrate to newGL, the process is not very straightforward (unfortunately). You should hire expert consultants in the market; you will also require SAP Support during the migration process. However, at the end of it all, the benefits far outweigh the costs of migrating your business to newGL Profit Center Accounting.

 

Please Share

I hope this series of blogs helps you understand the benefits of newGL Profit Center Accounting over Classic EC-PCA. Please do leave your comments below whether this article is helpful; and whether you have any suggestions/ comments; or if you would like to share your experience with Classic or newGL Profit Center Accounting.

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View my newGL presentation on Slideshare

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Rajesh is regarded as an authority in optimising and re-engineering Finance processes for his customers. Rajesh has 12 years experience implementing SAP / IT / BPM Finance solutions for several customers; he was involved in two large global rollouts and has a strong focus on Management Accounting and Reporting primarily Product Costing, Profitability Reporting and Material ledger (Transfer Pricing, Actual Costing). He also has 7 years experience working in the business in Finance and Accounting functions. His business process knowledge combined with his IT expertise enables him to provide his customers with best-of-breed advice on business process / IT implementations.

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Comments

  1. I have two questions –
    1. Can in NewGL PCA assessment use SKF?
    2. Is there any process or t.code that can create SKF based on actual posting to a GL account? e.g. Saels GL account (not a cost element) has posting to 850+ PCA every month. Can through a automated process the sales $ amount can be converted to a SKF? (similar funtion exist A&D industry)

    Thanks

    Subir

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