How adjustments to accounting objects affect HCM integration

Many companies take the move to SAP S/4HANA as an opportunity to streamline their systems. In doing so, they modify accounting objects in ERP that HCM also uses. This leads to various requirements for changes within the HCM system.

ERP and HCM are closely linked and share data. If you're adjusting accounting objects in ERP, you'll also need to modify data in HCM.

Cutoff date or historical adjustment?

An important decision in such an adjustment project is choosing the appropriate strategy. You can either carry out the transition using a defined cutoff date, where both old and new structures remain in the system; or you can choose the historical adjustment approach, in which the history of accounting objects is completely replaced in the system. This decision has a significant impact on how ERP and HCM will work together in the future. Both approaches offer advantages and disadvantages, depending on your company’s specific requirements.

Cutoff date approach: duplicate customizing and extensive testing

The cutoff date approach specifies that, from a certain date, the system’s customization is duplicated. This means that both the old and new personnel areas, company codes, controlling areas, cost centers, WBS elements, and/or internal orders exist in parallel. From the cutoff date, the new customization is activated via organizational assignment (IT0001), while the old structures remain in place.

The advantage of this approach is that historical data remains unchanged, and the new system is fully implemented from a defined point onward. However, this method requires extensive testing, as you'll need to check all processes – from payroll to time management, interfaces, and the B2A Manager. This is the only way to ensure that the transition runs smoothly. The testing effort and required consulting are particularly extensive in this approach, as duplicate customization is necessary.

A major disadvantage of the cutoff date approach is that retroactive payroll calculations in the HCM system cannot be performed on the old accounting objects. After the cutoff date, all payrolls and postings must be aligned with the new company codes and cost centers in the ERP system. This means that retroactive payroll calculations for periods before the cutoff date can no longer be performed using the old accounting objects in HCM.

Historical adjustment approach: simplification with full replacement

In contrast, the historical adjustment approach replaces the entire system history with the new accounting objects. As a result, there is no need to maintain old and new customizations for accounting objects in parallel. This approach significantly reduces the amount of testing work required, as processes such as the B2A Manager and subsequent activities do not need to be revalidated.

Another advantage of the historical adjustment approach is that retroactive payroll calculations remain possible in the HCM system, as the old accounting objects are completely replaced with the new ones.

With the historical adjustment approach, consulting effort is reduced, as duplicate customizing is not necessary. Additionally, the old accounting objects are no longer needed in the system, simplifying it and eliminating obsolete data.

In both approaches – cutoff date and historical adjustment – schemas, rules, and characteristics must be thoroughly reviewed and adjusted as needed.

Comparison of variants

Support with the Natuvion Data Conversion Server (DCS)

For companies opting for the historical adjustment approach, the Natuvion Data Conversion Server (DCS) is a valuable tool. This specialized software supports the transformation process and simplifies the conversion. The Natuvion DCS ensures a smooth data migration, replacing old accounting objects with new ones, while ensuring that all necessary adjustments are made within the system.

The benefits of using Natuvion DCS are numerous:

• Lower testing effort: Fewer tests are required due to the direct remapping of old accounting objects.
  
  
• Only one iteration: A single comparison payroll run is sufficient.
  
  
• Less customization: Since duplicate customization is not required, the consulting effort is reduced.
  
  
• No legacy data: The system remains free of outdated data structures, improving performance and maintainability.
  
  
• Utilization of existing Natuvion DCS templates: Prebuilt Natuvion DCS templates reduce project risk and implementation time.
  
  

Conclusion: historical adjustment approach as an efficient path to the future

The transition to SAP S/4HANA is a challenge for any company, but also provides a unique opportunity to realign the ERP system and eliminate outdated processes and structures.

When choosing between the cutoff date and historical adjustment approaches, the latter often proves to be the more efficient solution, especially when ensuring seamless ERP-HCM integration. When you use Natuvion DCS, the system history can be seamlessly converted without requiring duplicate customization or extensive testing.