SAP New General Ledger

Definiton

The SAP New General Ledger (SAP New GL) has been integrated in various SAP applications for several years, in particular in the area of finance and controlling. Being a fundamental established component in most SAP landscapes, the General Ledger must be transitioned to the new concept as a prerequisite with the introduction of SAP S/4HANA. The SAP New General Ledger replaces the existing ledger in SAP FI with its various subledgers such as profit center ledger, reconciliation ledger, cost of sales ledger, and special purpose ledger (SAP-SL) from other SAP applications.

All functions of the classic general ledger are to be found in the SAP New GL, supplemented by new capabilities. This is why it is also broadly known as the extended ledger. The integration of various subledgers eliminates the additional effort caused by reentering business transactions in different ledgers and the resulting cross-verification during preparation of financial statements.

While the SAP New General Ledger continues to be the cornerstone of the balance sheet, it optimizes existing functionality and extends capabilities in Financial and Management Accounting.

The SAP New General Ledger allows for unification of previously separate data sources (profit center ledger, reconciliation ledger, cost of sales ledger, special purpose ledger) into one database. The complexity of combining various dimensions is addressed through two new tables: FLAGFLEXT for period totals and FLAGFLEXA for data on document level. The new table structure now holds additional fields such as charge type, cost center, profit center, functional area, and segment. 

All finance accounting and controlling optimizations use the new unified data structures where all benefits unfold in combination with the SAP HANA database performance.

Overview: SAP New General Ledger

Implementing the SAP New General Ledger provides you with the following functionality.

• Real-time integration of Financial Accounting and Controlling (Universal Journal)
  • For advanced financial closing, the system offers Fast Close, the automated split of documents when posted, and of follow-up costs and tax charges for retroactive accounting for automatic payments. This results in not only an accelerated monthly close without manual adjustments but ensures consistency in finance and controlling in real-time.
    
    
• Simplified parallel accounting in different ledgers
  • While the leading ledger follows corporate standards, you may set up several other ledgers configured according to local standards. This concept allows for the implementation of different accounting principles, fiscal year variants, and for each accounting principle a completely separate general ledger.
    
    
• Document splitting for select dimensions
  • First, the document split is pre-processed according to individual settings for each business transaction. Then, passive document splitting is done automatically based on existing account assignments, followed by active splitting and zero balance setting.
• Settlement and reporting options for profit center, segment, and business area
  • Evaluation, reconciliation, and settlement can be achieved from various viewing levels on the unified data basis without any additional effort at any given time.
• Simplified data model and no redundancy
  • With the data consolidation, not only is a significant decline in processing effort notable, but also the reduced data volume. Less redundancy leads to much improved data consistency. Consequently, the improved data situation lowers your operating cost at better performance.

What’s the difference?

The SAP New GL differs from its classic predecessor in terms of its structural design.

In accounting, the SAP New GL seamlessly merges areas that were previously implemented in subledgers separated from the general ledger. This means that all functional areas of SAP Finance share a common database and data can be automatically reconciled.

Data reconciliation and the synchronization effort which happened to be manual with every closing become obsolete. With the reduced amount of data, business transactions are being processed at accelerated speed.

With the new GL concept financial accounting becomes real-time by design. It enables real-time integration with applications in the controlling area and business decisions can be based on accurate current company data. 

How to introduce the SAP’s new general ledger

Migrating the general ledger from classic to SAP New GL can be achieved as one independent project, or as part of an SAP S/4HANA-Transformation. Eliminating additional reconciliation activities and integrating Fast Close in Financial Accounting in the context of the general ledger migration means increased efficiency through redesigning and optimizing of business processes in financial accounting and possibly controlling.

Additionally, the consolidation of general ledger and subledgers during the process of migrating to the SAP New GL offers the opportunity to standardize financial accounting procedures such as account assignments.

You may also add parallel accounting to the scope of your migration project by implementing parallel accounts or parallel ledgers. When activating this method in SAP S/4HANA, you can select the solution for multiple accounts both ledgers.

SAP New GL projects can be categorized in scenarios. There are five standard scenarios and for each of these SAP offers a scenario-specific General Ledger Migration Cockpit.

The General Ledger migration in three phases

The SAP phase model for the GL migration consists of the following three phases with distinct activities.

Phase 1: Pre-configuration and Testing

While the classic general ledger is still in use, the SAP New GL is configured and tested on a newly set up test and quality assurance system.

Phase 2: General Ledger transition

The SAP New GL is being transferred to the production system. Transport is always possible retrospectively to the first day of the fiscal year. As a prerequisite for replacing the GL, the closing of the previous fiscal years must be completed. Until the year-end close, the SAP New GL validates the documents in the production system for conformity with the new general ledger concept.

Phase 3: Introducing the SAP New GL

Following the previous fiscal year’s closure, the new general ledger can take over as the leading system within the following month. The open items and balances are transferred to SAP New GL and the new fiscal year’s first months’ document items are migrated. After that, the entire functionality of the SAP New GL is available.