Subsequent to the Blog on Universal Parallel Accounting in SAP S/4HANA 2022 Series (Part 1) – Asset Accounting by my colleague Prakash Javvadi, where it explained on the impacts of Asset Accounting when UPA business function activated in the system. This is the second part of Universal Parallel Accounting in the SAP S/4HANA 2022 Series. In this part, I will go through the UPA impacts on Overhead Cost Accounting(CO-OM) & Product Costing(CO-PC). I have covered the main business transactions and reporting SAP FIORI apps.
Let us discuss now with some of major impacts on Controlling module with Universal Parallel Accounting from SAP S/4HANA 2022 on-premise. However Sales order accounting & Inventory valuation(ML/Actual Costing) will be covered in future blog.
While it was possible to use several ledgers in General Ledger Accounting in SAP ERP & SAP S/4HANA, only the values in the leading ledger were transferred to Controlling. With SAP S/4HANA 2022 Universal Parallel Accounting, SAP introduced a pure ledger approach, where the ledger is used consistently in Asset Accounting, Controlling, Inventory Valuation and Actual Costing in addition to General Ledger Accounting.
Using the Universal Parallel Accounting enables a single business transaction to be recorded with multiple valuation principles across financial and managerial accounting. This allows a (business unit or) group view on journal entry level with real-time currency translation and elimination of intercompany markups, COGS, revenues on a transactional level as parallel valuation.
For a complete overview of the scope of Universal Parallel Accounting, please refer for this note: Scope Note for Universal Parallel Accounting
Before introduction of Universal Parallel Accounting in SAP S/4HANA 2022, some of the functionalities like Universal allocation, Asset accounting and GL postings etc, allows to post on ledger specific postings and extract according to legal IFRS and GAAP reporting. However, there are lot of challenges around extraction of reports in local ledgers where other integration modules don’t store data in all ledgers and has to dependent on Leading ledger e.g., Controlling, Material valuation etc.
Source: SAP
In UPA Architecture, now it allows to post the independent transactions at ledger level starting from WBS settlement to Assets. Depreciation postings will be differentiated by ledger using Valuation view (detailed information provided in our earlier blog) and Universal allocation cycles can be created at ledger which will allocate the costs from one cost object to other. Now, from production planning to the inventory receipts has been simplified and can be possible to post in multiple ledgers. Using Margin Analysis, ledger gets updated with profitability segment along with financial accounting in ACDOCA.
Source: SAP
In SAP S/4HANA On-Premise, there is a greater variety of scope, however there are certain solutions which are not compatible with the UPA architecture, and which should be covered by alternative solutions instead, e.g.
At very high level, it is not possible to use both classic functionalities and UPA functionalities in parallel. SAP released standard error message when calling the classic functionalities/transactions If Universal Parallel Accounting is Active.
In Pre-UPA Architecture, T. Code KP26 is being used to manage the plan activity prices for processing the standard cost estimate and Activity confirmations at CO version. However, UPA provided functionality to manage the cost rates at Ledger specific using new SAP FIORI Application. Either to manage the rates specific to ledger or common to all ledgers (using ledger field blank). All the rates maintained in the SAP FIORI App will be stored in table ACCOSTRATE.
SAP FIORI App: Manage Cost Rates – Plan.
Universal allocation is a group of apps that allows you to allocate plan or actual values from sender objects to receiver objects. SAP introduced Universal Allocations functionality a while ago in SAP S/4HANA releases which already posts the ledger specific allocations and updated financial documents in ACDOCA.
In Summary, there are no such changes observed in Universal Allocations functionality specific to Universal Parallel Accounting in SAP S/4HANA 2022.
All the financial statements can be extracted at ledger using Universal Parallel Accounting. Likewise, Reports in Overhead Accounting offer the possibility to select and review financial data by ledger. However the existing standard reports cannot compare two ledgers but needs to create Custom analytical queries using SAP FIORI App F1572.
Below some of the SAP FIORI Apps which has ledger field available in the selection screen which allows to extract reports based on the ledger defined in financial accounting.
There is a possibility now to create a ledger wise standard cost estimate using UPA. Cost estimate updates the Material master (T.Code – MM03) for each of the ledger & valuation view.
Note that now we can still make use of MR21- Price change for updating the legacy prices on each ledger and valuation view level.
Now using UPA, Creation of standard cost estimate for one ledger (0L-Leading ledger) will not be sufficient as different ledgers will provide independent cost estimate based on maintenance of cost rates at ledger. To create a ledger wise cost estimate, its required to create a separate costing variant for each of the ledger and valuation view combination. Ledger field is available in Costing Type along with the valuation view which will be maintained in costing variant.
Universal Parallel Accounting does not impact the remaining components of the costing variant.
Let us see the Standard cost estimate created for Finished/Semi-Finished Materials posted in separate ledger. There is new field “Ledger” added in CK11N or CK40N that updates cost estimate.
Standard Cost Estimate Release (CK24) only allowed if assigned Costing Variant that matches appropriate Ledger. However to release the cost estimate for the period its required to open the period as per posting period variant assigned in the FINSC_LEDGER.
In case of different fiscal year variant assigned to ledger, its required to open the posting period as per the combination maintained in FINSC_LEDGER to avoid errors while marking/releasing cost estimate.
Note: For creation of Standard Cost Estimate in CK11N/CK40, it requires to run separately per ledger however in case of Deletion/Reorganization of standard cost estimates (T.Code CKR1), we cannot delete at ledger specific cost estimate. Instead, all the cost estimates per material per period to be reorganized/deleted to avoid data inconsistencies.
Universal Parallel Accounting comes with a concept of Event-Based postings, which allows to post the accounting documents for WIP (Result Analysis) at the time of material consumption & Activity confirmations. It is not required to wait till the month-end for execution of WIP result analysis as a period end activity. Similarly, Variance will also be calculated immediately at the time of Final Good Receipt posting against the production order (During partial Goods receipts, system will not calculate Variance). This helps business to post WIP & Variance in real-time directly to financial accounting for Management Accounting purposes.
Period end closing transactions such as Result Analysis (KKAO), Variance Calculation (KKS1) & Settlement (CO88) of orders are obsolete with Universal Parallel Accounting active as shown below screen.
Now let us go to the required Configuration steps for handling Event based postings. In this UPA solution, SAP simplified the configuration steps to handle the event-based postings.
In this configuration, SAP pre-delivered the RA key RSEBW which supports the Event-Based WIP and Variance Postings.
In WIP sources, You need to define which are actual costs to be included (in G/L Accounts) for orders that should be capitalized as WIP and assign the relevant GL accounts for WIP postings to Financial accounting.
After this, WIP account determination rules must be defined to assign specified G/L accounts for defined sources in financial accounting to which the WIP or Unrealized Costs is posted.
The created WIP account determination rule to be assigned to Company code.
In this step, Document Type is assigned to company code, this document type would be used during the creation of accounting document for WIP postings.
In this step, Result analysis key defined in the above steps will be assigned to Order type parameters using T.Code: OPL8. “Event-Based Posting” check box will be updated automatically after the assignment of Result Analysis key to Order Type Parameters.
Similarly indicator for “Event-Based Posting” will be updated in Control tab of Order master data.
In case of Event based Cost sheets, we manage them to calculate overheads. UPA will create automatic real time postings when the goods issue/production order confirmation posted in the system. No need to execute overheads as a period end closing activity. Below configuration to be maintained to get Event-based postings for Overheads.
Now let us post some transactions after configuration of Event-based postings. Start with Goods Issue against production order, we can be able to generate the three documents in real-time i.e. Material Consumption, Overheads (OH on Direct materials) and WIP.
MIGO – Goods issue to production order.
We can check the different ledger wise documents posted in financial accounting.
SAP introduced New SAP FIORI App (F4059 – Event-Based Production Costs) to visualize the cost analysis of the production order as shown below where Ledger is available in the selection screen.
When we check the cost analysis, all the postings including planned cost, actual material consumption and WIP calculations will be displayed.
Once production confirmation posted, system will update the actual confirmations which automatically posts Overheads (OH on Activity types) based on the value of activities confirmed.
Separate accounting documents posted for activities confirmed, Overheads calculated based on value of activities confirmed and WIP for activities & overheads.
Now we post partial Goods Receipt against production order(MIGO) to display the partial WIP reversal document.
Now, we can able to see the reversal of WIP posting based on the partial GR posting against the production order.
Target costs will be calculated only after posting the Goods receipts.
We are posting the Final activity confirmation of the production order (CO11N).
Along with Activity confirmation, System will post the overheads calculated based on the definition of cost sheets.
As a final step, it requires to post Final Goods Receipt against the production order(MIGO) where it creates Goods receipt, WIP reversal and Variance documents.
Accounting document for Goods receipt.
Accounting for reversal of WIP document
Accounting document for production variance.
In the below document we can observe, different values posted per ledger because of the ledger specific material cost estimates, activity rates maintained in the process.
Now we can visualize the complete postings in Cost Analysis report where WIP posted is reversed & accounting for Production variance posted after posting the Final GR.
Throughout all applications SAP provided a Comprehensive reporting based on ledger. SAP has updated the relevant SAP FIORI Apps / created new SAP FIORI apps to support the ledger-based reporting. Though this was available in financial accounting in pre-UPA architecture but extended to other integration modules in the new architecture.
Source: SAP
In Universal Parallel Accounting error management for the transaction posting in product costing is being handled by using a new SAP FIORI App “Event-Based Solution Monitor – Product Costing”. All the errors during process of Over head Postings, WIP & Variance calculation postings would displayed in this SAP FIORI App.
Conclusion: In the above Product Costing process, it is observed almost all the period end activities such as Result Analysis, Variance Calculation & Order Settlements are obsolete and it allows real time postings for the above values which allows improved Product Cost controlling during the period.
After UPA, all the accounting documents from Product Costing period end process will be updated in ACDOCA only, However in case of any postings for external procurements (involves direct consumption of materials/Services) it will also updates BSEG.
For more information on Universal Parallel Accounting, check out the following links:
I would like to thank my colleagues Prakash Javvadi & Dharmendra Nemallapudi for the valid contributions on this blog.
Thank you for reading the blog and please do let me know your thoughts in the comments if this content helps.
Okumaya devam et...
Let us discuss now with some of major impacts on Controlling module with Universal Parallel Accounting from SAP S/4HANA 2022 on-premise. However Sales order accounting & Inventory valuation(ML/Actual Costing) will be covered in future blog.
Introduction
While it was possible to use several ledgers in General Ledger Accounting in SAP ERP & SAP S/4HANA, only the values in the leading ledger were transferred to Controlling. With SAP S/4HANA 2022 Universal Parallel Accounting, SAP introduced a pure ledger approach, where the ledger is used consistently in Asset Accounting, Controlling, Inventory Valuation and Actual Costing in addition to General Ledger Accounting.
Using the Universal Parallel Accounting enables a single business transaction to be recorded with multiple valuation principles across financial and managerial accounting. This allows a (business unit or) group view on journal entry level with real-time currency translation and elimination of intercompany markups, COGS, revenues on a transactional level as parallel valuation.
For a complete overview of the scope of Universal Parallel Accounting, please refer for this note: Scope Note for Universal Parallel Accounting
Before introduction of Universal Parallel Accounting in SAP S/4HANA 2022, some of the functionalities like Universal allocation, Asset accounting and GL postings etc, allows to post on ledger specific postings and extract according to legal IFRS and GAAP reporting. However, there are lot of challenges around extraction of reports in local ledgers where other integration modules don’t store data in all ledgers and has to dependent on Leading ledger e.g., Controlling, Material valuation etc.
Source: SAP
In UPA Architecture, now it allows to post the independent transactions at ledger level starting from WBS settlement to Assets. Depreciation postings will be differentiated by ledger using Valuation view (detailed information provided in our earlier blog) and Universal allocation cycles can be created at ledger which will allocate the costs from one cost object to other. Now, from production planning to the inventory receipts has been simplified and can be possible to post in multiple ledgers. Using Margin Analysis, ledger gets updated with profitability segment along with financial accounting in ACDOCA.
Source: SAP
Features of Universal Parallel Accounting – Overhead Cost Accounting & Product Costing
In SAP S/4HANA On-Premise, there is a greater variety of scope, however there are certain solutions which are not compatible with the UPA architecture, and which should be covered by alternative solutions instead, e.g.
- Classic planning/ budgeting functionality should be replaced with SAP Analytics Cloud (SAC) and Budget Availability Control
- Classic commitments should be replaced with predictive Commitments Management
- Classic assessment/distribution is not enabled for UPA, instead Universal Allocation should be used
New Changes in Overhead Cost Accounting (CO-OM)
At very high level, it is not possible to use both classic functionalities and UPA functionalities in parallel. SAP released standard error message when calling the classic functionalities/transactions If Universal Parallel Accounting is Active.
Cost Rates
In Pre-UPA Architecture, T. Code KP26 is being used to manage the plan activity prices for processing the standard cost estimate and Activity confirmations at CO version. However, UPA provided functionality to manage the cost rates at Ledger specific using new SAP FIORI Application. Either to manage the rates specific to ledger or common to all ledgers (using ledger field blank). All the rates maintained in the SAP FIORI App will be stored in table ACCOSTRATE.
SAP FIORI App: Manage Cost Rates – Plan.
Universal Allocations:
Universal allocation is a group of apps that allows you to allocate plan or actual values from sender objects to receiver objects. SAP introduced Universal Allocations functionality a while ago in SAP S/4HANA releases which already posts the ledger specific allocations and updated financial documents in ACDOCA.
In Summary, there are no such changes observed in Universal Allocations functionality specific to Universal Parallel Accounting in SAP S/4HANA 2022.
Ledger Specific reporting:
All the financial statements can be extracted at ledger using Universal Parallel Accounting. Likewise, Reports in Overhead Accounting offer the possibility to select and review financial data by ledger. However the existing standard reports cannot compare two ledgers but needs to create Custom analytical queries using SAP FIORI App F1572.
Below some of the SAP FIORI Apps which has ledger field available in the selection screen which allows to extract reports based on the ledger defined in financial accounting.
| SAP FIORI ID | App Name |
| F4023 | Display Line Items – Cost Accounting |
| W0081 | Cost Centers – Plan/Actuals |
| W0077 | Functional Area – Plan/Actual |
| W0080 | Projects – Plan/Actuals |
| W0076 | Internal Orders – Plan/Actuals |
| F0961 | Projects – Actual |
| F0963 | Cost Centers – Actuals |
| F1583A | Functional Areas – Actuals |
| F4363 | Allocation Results |
| F3016 | Commitments by Cost Center |
Universal Parallel Accounting – Impacts in Product Costing configuration.
There is a possibility now to create a ledger wise standard cost estimate using UPA. Cost estimate updates the Material master (T.Code – MM03) for each of the ledger & valuation view.
Note that now we can still make use of MR21- Price change for updating the legacy prices on each ledger and valuation view level.
Now using UPA, Creation of standard cost estimate for one ledger (0L-Leading ledger) will not be sufficient as different ledgers will provide independent cost estimate based on maintenance of cost rates at ledger. To create a ledger wise cost estimate, its required to create a separate costing variant for each of the ledger and valuation view combination. Ledger field is available in Costing Type along with the valuation view which will be maintained in costing variant.
Universal Parallel Accounting does not impact the remaining components of the costing variant.
Let us see the Standard cost estimate created for Finished/Semi-Finished Materials posted in separate ledger. There is new field “Ledger” added in CK11N or CK40N that updates cost estimate.
Standard Cost Estimate Release (CK24) only allowed if assigned Costing Variant that matches appropriate Ledger. However to release the cost estimate for the period its required to open the period as per posting period variant assigned in the FINSC_LEDGER.
In case of different fiscal year variant assigned to ledger, its required to open the posting period as per the combination maintained in FINSC_LEDGER to avoid errors while marking/releasing cost estimate.
Note: For creation of Standard Cost Estimate in CK11N/CK40, it requires to run separately per ledger however in case of Deletion/Reorganization of standard cost estimates (T.Code CKR1), we cannot delete at ledger specific cost estimate. Instead, all the cost estimates per material per period to be reorganized/deleted to avoid data inconsistencies.
Event-Based Postings in Product Costing
Universal Parallel Accounting comes with a concept of Event-Based postings, which allows to post the accounting documents for WIP (Result Analysis) at the time of material consumption & Activity confirmations. It is not required to wait till the month-end for execution of WIP result analysis as a period end activity. Similarly, Variance will also be calculated immediately at the time of Final Good Receipt posting against the production order (During partial Goods receipts, system will not calculate Variance). This helps business to post WIP & Variance in real-time directly to financial accounting for Management Accounting purposes.
Period end closing transactions such as Result Analysis (KKAO), Variance Calculation (KKS1) & Settlement (CO88) of orders are obsolete with Universal Parallel Accounting active as shown below screen.
Now let us go to the required Configuration steps for handling Event based postings. In this UPA solution, SAP simplified the configuration steps to handle the event-based postings.
In this configuration, SAP pre-delivered the RA key RSEBW which supports the Event-Based WIP and Variance Postings.
In WIP sources, You need to define which are actual costs to be included (in G/L Accounts) for orders that should be capitalized as WIP and assign the relevant GL accounts for WIP postings to Financial accounting.
After this, WIP account determination rules must be defined to assign specified G/L accounts for defined sources in financial accounting to which the WIP or Unrealized Costs is posted.
The created WIP account determination rule to be assigned to Company code.
In this step, Document Type is assigned to company code, this document type would be used during the creation of accounting document for WIP postings.
In this step, Result analysis key defined in the above steps will be assigned to Order type parameters using T.Code: OPL8. “Event-Based Posting” check box will be updated automatically after the assignment of Result Analysis key to Order Type Parameters.
Similarly indicator for “Event-Based Posting” will be updated in Control tab of Order master data.
In case of Event based Cost sheets, we manage them to calculate overheads. UPA will create automatic real time postings when the goods issue/production order confirmation posted in the system. No need to execute overheads as a period end closing activity. Below configuration to be maintained to get Event-based postings for Overheads.
Production Cost Controlling Process with UPA:
Now let us post some transactions after configuration of Event-based postings. Start with Goods Issue against production order, we can be able to generate the three documents in real-time i.e. Material Consumption, Overheads (OH on Direct materials) and WIP.
MIGO – Goods issue to production order.
We can check the different ledger wise documents posted in financial accounting.
SAP introduced New SAP FIORI App (F4059 – Event-Based Production Costs) to visualize the cost analysis of the production order as shown below where Ledger is available in the selection screen.
When we check the cost analysis, all the postings including planned cost, actual material consumption and WIP calculations will be displayed.
Activities Confirmation (CO11N) for partial confirmation
Once production confirmation posted, system will update the actual confirmations which automatically posts Overheads (OH on Activity types) based on the value of activities confirmed.
Separate accounting documents posted for activities confirmed, Overheads calculated based on value of activities confirmed and WIP for activities & overheads.
Now we post partial Goods Receipt against production order(MIGO) to display the partial WIP reversal document.
Now, we can able to see the reversal of WIP posting based on the partial GR posting against the production order.
Target costs will be calculated only after posting the Goods receipts.
We are posting the Final activity confirmation of the production order (CO11N).
Along with Activity confirmation, System will post the overheads calculated based on the definition of cost sheets.
As a final step, it requires to post Final Goods Receipt against the production order(MIGO) where it creates Goods receipt, WIP reversal and Variance documents.
Accounting document for Goods receipt.
Accounting for reversal of WIP document
Accounting document for production variance.
In the below document we can observe, different values posted per ledger because of the ledger specific material cost estimates, activity rates maintained in the process.
Now we can visualize the complete postings in Cost Analysis report where WIP posted is reversed & accounting for Production variance posted after posting the Final GR.
Comprehensive Reporting through SAP FIORI:
Throughout all applications SAP provided a Comprehensive reporting based on ledger. SAP has updated the relevant SAP FIORI Apps / created new SAP FIORI apps to support the ledger-based reporting. Though this was available in financial accounting in pre-UPA architecture but extended to other integration modules in the new architecture.
Source: SAP
In Universal Parallel Accounting error management for the transaction posting in product costing is being handled by using a new SAP FIORI App “Event-Based Solution Monitor – Product Costing”. All the errors during process of Over head Postings, WIP & Variance calculation postings would displayed in this SAP FIORI App.
Conclusion: In the above Product Costing process, it is observed almost all the period end activities such as Result Analysis, Variance Calculation & Order Settlements are obsolete and it allows real time postings for the above values which allows improved Product Cost controlling during the period.
After UPA, all the accounting documents from Product Costing period end process will be updated in ACDOCA only, However in case of any postings for external procurements (involves direct consumption of materials/Services) it will also updates BSEG.
For more information on Universal Parallel Accounting, check out the following links:
- Blog series on Universal Parallel Accounting with focus on
- Universal Parallel Accounting in SAP S/4HANA 2022 (On-Premise) Series (Part 1) – Asset Accounting by Prakash Javvadi
- Overhead Accounting by Janet Dorothy Salmon
- Asset Accounting by Astrid Hilgenberg
- Inventory Accounting by Janet Dorothy Salmon
- Event-Based Revenue Recognition by Volkmar Zahn and Gerold Wellenhofer
- Production Accounting by Shuge Guo
- Scope Information Note for SAP S/4HANA and SAP S/4HANA Cloud, Private Cloud Edition
- Business Function Documentation
I would like to thank my colleagues Prakash Javvadi & Dharmendra Nemallapudi for the valid contributions on this blog.
Thank you for reading the blog and please do let me know your thoughts in the comments if this content helps.
Okumaya devam et...