SAP S/4HANA Group Reporting Preparation Ledger: A Closer Look

[JAnnapureddy]

In this blog, I aim to provide assistance to our S/4HANA Group Reporting customers and partners, helping them gain a better understanding of how to integrate SAP S/4HANA Finance for Accounting with SAP S/4HANA Finance for Group Reporting. This integration can be achieved by leveraging the group reporting preparation ledger, which enables a tight accounting integration.

In this white paper, I will primarily highlight five key concepts at a high level. Subsequent blogs will delve into each concept in detail.

• Group Reporting Preparation Ledger/Tight Accounting Integration Introduction:


• Flexible Derivation of the Consolidation Units for Segment Reporting (New Segment & Consolidation Unit design)


• Adding Additional S/4HANA Accounting Dimensions in the Consolidation Model:


• Summary of Newly Introduced Substitution Rules and Validations:


• Deployment Scenarios:

Group Reporting Preparation Ledger/Tight Accounting Integration Introduction:

This section will provide an overview of the group reporting preparation ledger and its significance in achieving seamless integration between SAP S/4HANA Finance for Accounting and SAP S/4HANA Finance for Group Reporting.

Flexible Derivation of the Consolidation Units for Segment Reporting (Zebra Entity design):

Here, we will explore the concept of the flexible derivation of consolidation units for segment reporting. We will discuss the Zebra Entity design, which allows for efficient consolidation of data across various segments.

Adding Additional S/4HANA Accounting Dimensions in the Consolidation Model:

This key concept focuses on expanding the capabilities of the consolidation model by incorporating additional S/4HANA accounting dimensions. We will delve into the process of integrating these dimensions to enhance reporting and analysis.

Summary of Newly Introduced Substitution Rules and Validations:

This section will provide a summary of the latest substitution rules and validations introduced in the SAP S/4HANA Group Reporting Preparation Ledger. These rules and validations ensure data accuracy and integrity throughout the consolidation process.

Deployment Scenarios:

Finally, we will explore different deployment scenarios for SAP S/4HANA Group Reporting. This includes the transition process for new SAP S/4HANA customers starting from CE2202/OP 2021 FSP1, as well as the transition for existing SAP S/4HANA customers.

By understanding these key concepts, our customers and partners can make the most of the integration between SAP S/4HANA Finance for Accounting and SAP S/4HANA Finance for Group Reporting.

Detailed Overview:

Group Reporting Preparation Ledger/Tight Accounting Integration Introduction:

A key capability to integrate with accounting in a tighter way is to enhance the data transparency between General Ledger accounting in SAP S/4HANA Finance for Accounting and consolidation in SAP S/4HANA Finance for Group Reporting. At the same time, the system should allow flexible logic to enhance the data quality in accounting to better serve consolidation and analytical purposes for a group accountant. Substitution and validation functions will support this scenario. The group reporting data requirement will not block accounting document posting to reduce the risk of blocking other processes. Any inaccurate data can be adjusted manually in group reporting or by leveraging a realignment program in the future to provide better data quality as expected. With improved data in accounting, the data release program can be enhanced and simplified compared to the traditional approach.

With this integration, specific field data is no longer sent from General Ledger accounting to group reporting and back again. Instead, the data from these fields are available in General Ledger accounting for group reporting activities and can be used from there. Therefore, the integration of General Ledger accounting data allows for more efficient and faster use of the data.

What is the value of deploying a Group Reporting Preparation Ledger (GRPL)?

The first question that might come up is how the GRPL concept will be helpful and what the immediate benefits of implementing it are. Based on our recent deployment of the GRPL for various public cloud and private cloud customers, we have observed the following key business and IT benefits.

Transparency at accounting source	Increased flexibility	Foundation for future innovations
Group Reporting fields in S4 Universal Journal (ACDOCA) Prompt access to preliminary financial information in Group Reporting view for Local Accounting and Corporate Close teams.	Early derivation w/o changing source data. SAP default and customer-defined substitution rules for FS item, subitem, partner unit, and Cons unit. Cross-dimensional field derivations Faster release task Support to release data into special periods, which prevents data from special periods are added to the last period.	Real-time transactional consolidation in accounting Real-time analytical group view on accounting Report-2-report navigation from group reporting to accounting Steppingstone into Real-Time Value Chain Analysis and Group Valuation Real Time Profit in Inventory Eliminations via Group valuation ledger Process control integration of accounting and group reporting with real-time validation situations and alerts

Prerequisite check There are key points to check when adopting the group reporting preparation ledger.

1. Common fiscal year variant for consolidation purposes.


2. Common consolidation chart of accounts


3. Functional currency as the source of the local currency in group reporting ( S/42021)


4. Local Currency assignment from the version (S4 2022 FSP1)


5. A common source of group currency


6. Freeze derivation rules early in the closing process.

• All company codes that are assigned in a ledger that will be used as a group reporting preparation ledger need to have the same FYV. At the same time, the FYV of the ledger must be the same as the FYV assigned to the consolidation version.

 

• The prerequisite for integrating data from accounting to GR with GRPL is indeed that for the integrated consolidation unit the FYV of the corresponding company code needs to match one of the GR versions. The rationale is that on the accounting and GR side the period definitions need to be the same. There is no period transformation or derivation during the release task anymore, i.e., the period is transferred 1:1 from accounting to GR.


• Local Currency Prerequisites:


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  • In the beginning stages of integrating with the group reporting preparation ledger (S/4HANA 2202), the functional currency is fixed as the source key figure for the local currency. This means integration is only feasible if the functional currency matches the local currency of the relevant company codes within the applicable ledger.
  
  
  • In the S/4HANA 2208 update, the local currency of a consolidation unit can change during the first period (001) of a fiscal year. This means that this release considers the time-dependent local currency of a consolidation unit when performing checks.
  
  
  • With the S/4HANA 2302 update, the local currency source can be configured at the consolidation version level. As a result, in this release, the check compares the local currency of the consolidation unit with the currency provided by the local currency source in the assigned company code(s). Detailed view presented in the subsequent blogs.
  
  
  
  


• Ledger Group Currency- The integration of an accounting currency measure into the group currency in group reporting is optional. If the source of the group currency setting is maintained in the consolidation version, then the group reporting preparation ledger needs to have the same currency key maintained for the source of the group currency key figure for all company codes.

Before we conclude this blog, Let’s review a few differences between classic accounting integration and Group Reporting Ledger integration.

• In conclusion, both classic accounting integration and Group Reporting Preparation Ledger integration aim to consolidate financial data within Group Reporting, but the latter offers distinct advantages in terms of efficiency, accuracy, and compliance. Organizations must carefully assess their General Ledger and Group Reporting current and future design, as well as Ledger, Version, Fiscal Year variants, and Chart of Accounts approach before activating the GRPL Concept to gain all the benefits. Additionally, they should consider the benefits of adopting the Group Reporting Preparation Ledger concept for more effective group-level financial management and corporate financial close. Taking these factors into account will help organizations optimize their financial reporting processes and make informed decisions for better overall financial performance.

 

• In subsequent blogs, we will provide detailed insights into each concept, empowering you to optimize your financial reporting and consolidation processes. Stay tuned for more!

Acknowledgments

I would like to extend my heartfelt gratitude to florian.roll  , mike.tjoeng whose guidance and support were instrumental throughout this Group Reporting Solution management journey. Their valuable insights and encouragement have been a driving force in shaping this blog post and enhancing my skills. I am truly grateful for their time and dedication in helping me grow both personally and professionally.