SAP New GL Overview – Benefits. Functions. Types

SAP New GL – Solution to Classic GL Shortcomings

In this blog, we will discuss the SAP New GL benefits, types and functionality in ECC 6.

As said, the SAP New GL is built to overcome the shortcoming of the classic G/L but will continue the traditional interaction with other software in the SAP system.

Article Coverage:-

• SAP New GL Tables
  • FAGLFLEXT
  • FAGLFLEXA, FAGLFLEXP
  • BSEG_ADD
• SAP General Ledger Accounting Concept (Leading & Non-Leading)
• SAP New GL Functionality
  • Parallel Accounting
  • Document Splitting‘
  • Fast Closing
• SAP New GL – Summary

SAP New GL Tables

Tables like BSEG (Entry View), BSIS (Open Item) and BSAS (Cleared Items) will continue to be part of New General Ledger Accounting. However, SAP New GL handles the totals and stores ledger-specific line items. It further provides year-end closing valuations in parallel ledgers using other tables. So, we will discuss this in detail below.

Read related: SAP General Ledger Period-End Closing 

FAGLFLEXT –Total Table

The new totals table, FAGLFLEXT, contains new standard fields for storing totals.

Some Key Features:-

• With the standard table, you can easily activate support for many scenarios by customizing the software.
• Thereby it supports segment reporting, Profit-center updating, cost-of-sales accounting and cost-center updating.
• Moreover, it helps in preparation for consolidation and business area updates as well.
• Fields such as Company code, Account, Profit Center and segment are already considered the standard fields in the table.

Also Read: Preliminary Costing in SAP

FAGLFLEXA and FAGLFLEXP – Ledger-Specific Line Item Table

The ledger-Specific line item table, FAGLFLEXA and FAGLFLEXP are used to store ledger-specific line items (actual or planned).

Key Features:-

• It contains additional information for use in the document entry view. Thus, by using these tables you can update different characteristics and document splitting information.
• You can also update period shifts and currencies in specific ledgers for individuals’ documents. This helps you to perform reporting tasks for specific dimensions at the line-item level.

BSEG_ADD – Tables for Storing Valuations for Year-End Closing grain selected Parallel Ledgers

This table (BSEG_ADD) stores documents posted in connection with Year-End Closing valuations for the selected parallel ledgers. Importantly, these documents become irrelevant if you don’t have parallel accounting or if you accomplish parallel accounting through the accounts approach.

Some Key Features:-

• Its unified structure combines several individual ledgers which include the cost-of-sales ledger, profit-center accounting ledger and consolidation staging ledgers.
• This New G/L addresses the increased standardization of international accounting principles and reporting requirements. This enables faster period-end closings.
• It is easier to group functional area segments and profit-center dimensions along with the G/L in a single data record and reorganize profit centers and segments.
• The SAP New General Ledger Accounting supports the simultaneous implementation of company-specific and industry-specific reporting requirements.
• It comes with several new and enhanced functions and a new approach. Which is- reducing costs and increasing data transparency by converging financial and management accounting in a single application.

SAP General Ledger Accounting Concept

SAP has defined two types of ledgers:-

Leading Ledger

Leading Ledger is denoted as “0L” is the standard system. All company codes in a client are to be assigned to this ledger. We use it to portray the group valuation view.

Further, in regards to the ledger currency, you can assign it the same as that of classic G/L. This means you can assign one or two additional local currencies apart from the first local currency that serves as the parallel currencies.

Likewise, for each of the additional local currencies, you need to select an appropriate currency type, such as group currency, hard currency or global-company code currency. 

You also need to assign the book depreciation area 01 of asset accounting to the leading ledger, in addition to integrating Controlling with the leading ledger.

Also read: SAP CO Interview Questions and Answers

Non-leading ledgers

Non-leading ledgers are the ledgers that you may define in addition to the leading ledger. You define it for each of your company codes and can assign different characteristic values and fiscal-year definitions to these ledgers.

You can also use them for different purposes such as parallel accounting and management reporting. Similarly, you can use one or more currencies of the leading ledger as the currency of the additional ledgers.

For example, You have defined USD and the Euro as the second and third local currencies, in addition to the first local currency INR for a leading ledger. Then you can use any of these for the non-leading ledgers but you cannot use any other currency (For example – GBP).

Leading vs. Non-leading ledger

Because the leading ledger exists in all company codes (across clients), all the primary postings related to daily operations (invoices, payments etc.) are normally updated in all ledgers assigned to the company code.

However, if you specify a ledger or ledger group during postings then the system makes the postings only to the specified ledger. Normally we select a ledger for postings for most of the secondary transactions such as allocations, valuation postings, and period-end adjustment postings.

Related:- Ledgers in SAP S/4HANA Finance

Two Views with SAP New GL for your daily postings

1. Entry view – This is a regular document entry view for your daily operational posting with which you enter, change or display documents as you have been doing traditionally even with the classic GL.
2. GL View – New G/L provides the option of switching to a new view called the G/L view, which is specific to a ledger: the postings made here are to a specific ledger or ledger. Depending on the configuration settings you can work with one more GL ledger view.

Do Read: New General Ledger Migration in SAP

SAP New GL Functionality

New General Ledger Accounting in SAP brings in three main functionalities. These are- Parallel Accounting, Document Splitting Functionality and Fast Closing. Let us understand these.

Parallel Accounting

Unlike classic G/L, parallel accounting you need to perform through the accounting approach (using several parallel G/L accounts and special-purpose ledgers).

You can now use an alternate approach for parallel accounting in New G/L with the parallel ledger concept. The results of parallel accounting in New G/L are the same whether you use parallel ledgers or parallel accounts.

In SAP New GL you need to select the most appropriate approach to meet your exact needs. If you choose the account approach (Parallel accounts) then you just need to work with the leading ledger. On the other hand, if you take the parallel ledger approach, then you have to work with additional ledgers besides the leading ledger.

Also Read:- Features of New Asset Accounting SAP S4 HANA

Advantages of using Parallel Ledgers for Parallel Accounting

1. Parallel valuation for different accounting standards or fiscal year variants
2. A manageable number of G/L accounts
3. Separate Ledgers for each accounting principle
4. Posting with single or multiple ledgers
5. Period-end closing activities separately and exclusively for parallel ledgers

Document Splitting

With Document Splitting, we can split a document online for most of the common accounting processes (invoices, payments, clearing etc.). This we can do by identifying and supplying the missing account assignment objects. Such as profit centers into document rows when no such assignment existed during document entry.

Likewise, for example, while processing a customer invoice, we can assign profit centers to expense accounts manually. Or we can derive the assignment automatically as well.

Fast Closing

New G/L makes the period-end closings easier and faster. It helps us create a non-consolidated balance sheet at the level of the characteristics at any point in time. Hence you don’t need to run additional programs to split the characteristics. The document splitting functionality ensures that the posted data always meets your reporting requirements.

New GL in SAP also removes the need for reconciliation runs between CO and FI. This is because the cross-entity CO postings are updated to G/L in real-time, keeping CO and FI synchronized. An example of cross entity CO posting is transfer postings for costs from one cost center or profit center to another either manually or with allocations.

Further, you also have information on the origin of such documents and transactions.

We can perform allocations in the G/L if you need to distribute values for specific G/L characteristics such as customer-field using a specific scheme. Such allocations are always made for specific ledgers and operate in the same way as CO allocations.

Related: Changes in SAP Controlling in S/4HANA

SAP New GL – Summary

In this blog, I explained New GL in SAP ERP Financial Accounting which overcomes the shortcomings of traditional G/L accounting by moving away from the need for multiple applications and interfaces.

It also provides all the required functionality in a single robust application with a unified interface. Hence it takes care of both financial and management accounting and reposting

New G/L combines several individual ledgers such as the cost of sale ledger, profit center accounting and consolidation staging ledgers. It comes with many new and improved functions for parallel accounting, segment reporting, document splitting, and fast close with balanced books at any time. Finally, it helps improve compliance with a reduced total cost of operation.

Learn New GL in detail in:- SAP S/4HANA Finance Training

Watch Video: New General ledger Accounting in SAP FICO