Does SAP Simple Finance 2.0 change the Ledger concept in SAP?
SAP introduced New GL renamed later to SAP GL with Leading Ledgers and Non Leading Ledgers almost 10 years ago This was meant to replace good old solutions like parallel accounts, dummy LEs, special purpose ledgers that SAP customers have been using for a long time to report financials under multiple accounting standards. There are still quite a few customers who are on latest versions of SAP but still use parallel accounts approach. I asked a few why and did not get a good answer and I surmised that their finance users got used to the Parallel accounts approach and did not want to enhance the functionality. Wherever I designed SAP GL post 2005, I recommended 2 ledgers minimum and 3 ledgers in few cases : Leading Ledger 0L for US GAAP, One Non leading ledger for local GAAP and another Non leading ledger for IFRS if there is as dual reporting requirement in local countries during transition period
In early 2015 SAP released SFIN 2.0 and introduced Appendix Ledger (AL) concept. I was in a S4/HANA workshop recently with finance stakeholders who are considering implementing S4/HANA and they had several questions on what this new AL ledger is and also how the Leading and Non leading ledgers get impacted with SFIN 2.0. I thought of sharing key changes to the ledger design with SFIN 2.0. I had to get a bit technical on this topic and apologies for that.
Leading Ledger 0L
Leading ledger 0L still stays in SFIN 2.0 and US Customers should use this primarily for US GAAP reporting. However the two underlying physical tables in which all the transactions are stored, FAGLFLEXA (line item table) and FAGLFLEXT (totals table) are no longer there and are replaced by a new table ACDOCA which is the detailed line item table. This table has 360 + fields and provides the basis for majority of reporting in SAP both statutory and managerial going forward. BSEG table will still be there though I have a feeling that this is probably temporary and over a period of time ACDOCA will be the solitary table that stores all Financial/Managerial data. In a perfect world why we should have more than two tables in ERP systems for financials - one for master data and one for transactions. With SFIN 2.0 almost every total table in SAP will go away because totals can be done on fly as the application logic runs on HANA database which is fantastically fast. 0L Leading Ledger by default gets assigned to all legal entities (Co Codes in SAP) and no change to that in SFIN 2.0. SAP document number that gets generated when you post financials postings is now unique regardless of which ledger you post which is different to multiple document numbers in previous versions.
Non Leading ledgers
Non leading ledgers still stay and can be used for select legal entities that need to report in different accounting standards. Normally when you post an Accounting document, you do not post to a ledger but to a ledger group. Ledger group is where you group the Leading ledger and associated Non leading ledgers so that you enter Journal entries only once and all the ledgers within that ledger group get updated with values. If you have to make adjustment postings for different accounting standards you do that only in specific Non leading ledgers. Similar to Leading Ledgers, Non Leading Ledger financial postings that were previously stored in FAGLFLEXT and FAGLFLEXA in ECC 6 will be replaced with new table ACDOCA in SFIN 2.0. You can have a different fiscal calendar for the same Legal entity – one for leading ledger and one for non- leading ledger and there is no change to that. You can continue to close periods in Non leading ledger though they are open in Leading ledger and vice versa. So basically the functionality for Leading and Non leading ledgers did not change though the underlying tables changed.
Appendix ledgers
This is a new concept that was introduced in SFIN 2.0. These are new ledgers that sit on top of the Leading ledger. When you create an Appendix ledger in SAP, you flag it as “Appendix Ledger” and link that to a base leading ledger. Unlike Non leading ledger, Appendix Ledger cannot have a separate fiscal year different to Leading ledger but at the same time, you can open and close fiscal periods separately from Leading ledger. All the financials postings that happen in Leading ledger 0L are available for reporting purpose in Appendix Ledger though they are not physically updated. In addition to that, you can manually post management reporting adjustments directly in Appendix Ledger. Please note that in case of Non Leading Ledgers, you can post manual postings and system generated postings like foreign currency valuations etc but it is not the case with Appendix ledger
Now what is the Use case for Appendix ledger? From what I heard from SAP Architects and my read of partner documentation, the main use case is to give business a “Management” Ledger without impacting your Financial/Statutory reporting ledgers like Leading and Non leading ledgers. You do not get AP/AR details in AL and the only way you update Appendix ledgers is through manual postings with limited SAP transactions. I am yet to hear from any ramp up Customers on how they used AL and their experiences. SAP documentation, release notes etc are also still light on this concept. In my view, the Use cases for Appendix ledger are still be established with real business benefits and so as of now I am reserving my recommendation on using AL for new implementations till there is better clarity on this functionality from SAP and we hear some success stories.
