Can SAP ECC newGL replace your existing Special Ledger?

Can SAP ECC newGL replace your existing Special Ledger?

Overview

One of the common question most customers ask me “Can SAP ECC newGL replace my existing Special Ledger?” However the answer to that question is far from simple. One needs to understand the purpose and design of the existing Special Ledger and map those to SAP ECC newGL features to be able to give a definitive answer. In this blog, I will attempt to list some of the criteria that will go into deciding whether existing Special Ledger (FI-SL) can be replaced with newGL.

Blogs on SAP ECC newGL

In my series of blogs on SAP ECC newGL, I intend to discuss, review and document my experiences using examples on how SAP ECC newGL can be designed for various complex business processes.

To identify the series of blog, I have categorised the blogs under SAP > newGL. If you have questions/ comments/ suggestions, please send me your comments in the form below. Sharing your questions and experience using comment box below will help other readers to gain additional knowledge involved in this functionality.

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Assumption for this blog

I will assume you are aware of the basic concepts around newGL. You could read the below listed blogs to gain familiarity with newGL. In this blog, I will link the context to the foundation blog so you can refer back to the concept, if you want to.

Architecture of SAP new GL
Overview of new GL Document Splitting Process

 

Some of the material in this blog is based on my experiences with newGL; some is based on discussion and experiences of network, most on based on analysis of the design and architecture of newGL. It would useful for readers of this blog and for FICO community at large if you could contribute to your experiences using the comment box at the end of this blog. I will update the blog where necessary and (if I update the blog based on your feedback) I will acknowledge your contribution to this topic.

 

What am I demonstrating

In this blog, I intend to identify the scenarios where existing Special Ledger (FI-SL) can be decommissioned and replaced by newGL.

 

Criteria to replace Special Ledger (FI-SL) with newGL

There are no easy set of criteria or cookbook to determine if Special Ledger can be replaced with newGL. The decision depends on detailed analysis of the purpose for which the Special Ledger was created; and the functionality that was built into it. Nevertheless, below are some broad ranging criteria that should be looked at when deciding whether to replace Special Ledger with newGL.

 

Special Ledger required for new custom fields

The only reason you created Special Ledger (FI-SL) in previous versions of SAP is because you wanted to report on custom fields. In previous versions of SAP, you could not create custom fields in FI coding block. The workaround was to create a Special Ledger that receives data in an unmodified form for all standard fields and derives data for the custom field based on specific rules.

SAP has to use this technique to create many of the Industry Solutions. For example, for Public Sector funds management was a key process. However the concept  behind funds was simple. It involved a new field(s) and the derivation logic. Funds Management (not part of Industry Solution now, but part of General release) was created as a Special Ledger (several Special Ledgers). With newGL, SAP incorporated the functionality of funds management into newGL.

In this simple scenario, it is feasible to replace the Special Ledger with newGL. In FI newGL, you can create custom fields within the FI coding block. There are some caveats on custom fields, I would strongly suggest you read all SAP OSS notes (category: consulting, customising, FAQs, release information) before you embark on this feature.

You can create custom fields from IMG menu as below:

[IMG] Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Fields > Customer Fields

 

Add new custom field to newGL

Add new custom field to newGL

 

Special Ledger was created to report on multiple fiscal years

Another area of consternation with users of previous versions of SAP: many companies had to report the same results in different fiscal years (for group reporting, for tax reporting, for legal reporting). The workaround for this was to create a Special Ledger with a different fiscal year. The only purpose this Ledger served was to receive unmodified data from FI and post it with different fiscal year parameters.

In FI newGL, you can create additional custom ledgers within FI. In this simple scenario, it is feasible to replace the Special Ledger with newGL. Each such ledger can be assigned a fiscal year variant that could be different from the fiscal year variant of the main ledger (0L). The Information System in FI has been enhanced to enable selection of data by Ledger. Front end users will process data as per the agreed process; in the background this data is copied to additional ledgers and fiscal period/ year is converted based on the fiscal year variant assigned to the ledger.

You can assign different fiscal year for additional ledgers from IMG menu as below:

[IMG] Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Define and activate non-leading ledgers

 

create additional ledgers in newGL

Additional Ledgers can have different fiscal year from main FI ledger

 

Special Ledger was created to allow easy compliance with multiple Accounting standards

Many companies had a requirement to post additional adjustment accounting entries at month end to ensure compliance with multiple accounting standards. For example, they might maintain their main books of accounts as per GAAP accounting standard. However, to ensure compliance with IFRS they have to post month end adjustment entries that do not impact GAAP books of accounts. This was technically not possible in previous versions of SAP.

The workaround was to create a Special Ledger (for IFRS compliance) and post adjustment entries only in that ledger; the accounting results from this ledger complied with IFRS. Other than these adjustment entries, the data in this Special Ledger flowed unmodified from the main ledger (0L).

In this simple scenario, it is feasible to replace the Special Ledger with newGL. in newGL. You can create additional ledgers for specific accounting treatments. All postings to the main ledger 0L will flow into additional ledgers. It is possible to post entries in one additional ledger to the exclusion of other ledgers.

You can create custom ledgers for differing accounting treatments from IMG menu as below:

[IMG] Financial Accounting (New) > Financial Accounting Global Settings (New) > Parallel Accounting > Define Accounting Principles

 

define accounting principles newGL

Define accounting standards for newGL

 

[IMG] Financial Accounting (New) > Financial Accounting Global Settings (New) > Parallel Accounting > Assign Accounting Principle to Ledger Groups

 

assign accounting principles newGL

Assign accounting standards to Ledgers in newGL

 

Special Ledger was created to report on multiple currencies

Many companies have to report the FI data in different currencies (for group reporting, for legal reporting). Reporting on additional currencies is not a new feature from newGL; however additional currencies when combined with other features like additional ledgers gives it a new flavour. You can define additional currencies for main ledger (0L) and for each additional ledger.

You can assign additional currencies to additional ledger from IMG menu as below:

[IMG] Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Define and activate non-leading ledgers

 

configure document splitting, document splitting, document splitting functionality, document splitting process, gl document splitting, ledger, linkedin, new gl, new gl document, parallel ledgers, profit centre, SAP, SAP document splitting, SAP ECC, SAP new GL, self balancing ledgers, special purpose ledgers

Assign currencies to additional ledgers in newGL

 

Special Ledger was created to generate additional reports

The only purpose of your Special Ledger was to generate additional report painter/ writer reports that could not have been easily created in ABAP FI (FI did not have report painter/ writer feature in previous versions).

With the advent of Business Intelligence (BI) and SAP ECC newGL, sustaining a Special Ledger for this purpose is a travesty.

In this simple scenario, it is feasible to replace the Special Ledger with newGL. in newGL. newGL has a suite of new reports (list oriented reports, drill down reports) with large number of selection criteria including profit centre, segment, ledger. The need to new reports might be greatly diminished. Better still, extract data in FAGLFLEX* tables into BI and use the reporting capabilities of BI.

 

Conclusion

SAP ECC newGL is structured as a Special Ledger. As a result, newGL inherits many of the features that were available in Special Ledger (Allocations, Validations, Substitutions, Exits, Roll up Ledgers).

NewGL does not replace all or most of the Special Ledgers that support Industry Solutions. As a standard delivery, funds and grants (Public Sector) are available in newGL. However, in many cases, fields from other industries are not included (joint venture, for example) because Joint Venture Accounting has several processes that cannot be replicated easily in newGL (for example, cutback, cash call). Master Data in Joint Venture Accounting is not restricted to field “joint venture” but there are another 12 master data fields (billable indicator, Equity Group, Recovery Indicator etc) that will have to brought into newGL should SAP decide to merge that Industry Solution into newGL.

In the conclusion, decommissioning of custom Special Ledgers and SAP delivered Special Ledgers depends on the circumstances in each case – check the purpose and usage of the Ledger.

 

Please Share

I hope this blog has helped you develop some criteria around replacing Special Ledger (FI-SL) with newGL. Please do leave your comments below whether this article was helpful; and whether you have any suggestions/ comments; or if you would like to share your experience with readers and FICO community.

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View my presentation on Slideshare

Document splitting in New GL in SAP

 

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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 is currently working on a large state government template rollout. He has a strong focus on Financial and Management Accounting and reporting. 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. It was very good introduction to a complex issue.

    One question I have in my mind is, in SPL, you have an option to select documents based on certain criteria. (transaction types). It came as a standard feature within special purpose ledger wherein, you can try to restrict and populate certain transactions only in SPL.

    As a standard feature in New GL, I assume, this feature is not available in New GL.

    • Hi Srivathsan,
      This feature is not available in newGL. new GL is legal books of accounts as well, so you cannot filter to say “I want to record this but not this”. Additional adjustment / accounting entries can be posted to “Additional Ledgers” without posting to Main Ledger. Other than this, all ledgers have to be in sync.

      Rajesh

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