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Does SAP recommend to go for Alternate Fiscal Year? If not, why?

Jan 12, 2017 at 04:51 AM

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Hi,

I am involved in an SAP Implementation in an Indian Govt. Organization where the financial year as per current practice is March - Feb. I understand that the SAP standard fiscal year for Indian Govt. is Apr - March. I am told by the System Integrator that it is recommended to go by the SAP standard fiscal year Apr-March. The reasons given were:

1) SAP Patches that come for the HCM (Payroll or financial year related) module may not work as expected if we go for an alternate fiscal year. And that lot of customizing would be required to be done if there are some policy changes by the Govt. Can some expert from SAP throw light on this?

2) Mid-year Go Live is not possible if we alter the fiscal year. - Why?

I have also gone through the link https://blogs.sap.com/2012/01/03/alternate-financial-year-in-payroll-india/.

I would also like to understand what, if in future the organization changes its fiscal year. In that case, we should be able to go back to Apr-March, Whereas the blog says it cannot be done.

It would be really helpful if somebody could throw light on the above.

Many Thanks

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3 Answers

Mukesh Kumar Jan 16, 2017 at 06:46 AM
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Dear SAP experts,

Please throw some light on the above. I am in need of this urgently.

Thanks in advance.

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Aman Tyagi
Feb 06, 2017 at 09:45 AM
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Hello Mr. Mukesh,

Please note that Alternate Financial Year is mostly recommended for Public Sector companies and for most other companies default Financial year should be used. However, nothing is stopping you specifically from using the Alternate Financial Year solution. You should however note that you CANNOT and SHOULD NOT change the Financial Year type mid-year as that would impact tax and income projection/calculation and your payroll cluster might become irrevocably corrupted.

You also CANNOT change your Financial Year back to standard financial year once you've already gone to Alternate Financial Year. Also, usually Financial Years are configured during system go-live and you should NOT try to change from Standard to Alternate Financial Year after Go-Live. This is again due to the nature of the payroll periods generated for each of them.

Best Regards,

Aman

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BALASUBRAMANIAN AP Feb 09, 2017 at 01:13 PM
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Hi,

Correctly said by Aman.

1) SAP provides the solution for AFY. The decision is based on the client's requirement. SAP cannot recommend anything. We need to choose our solution based on the requirements.

2) Changing from AFY to normal FY, it will be a new project. Probably you can think of when you are going for a major upgrade or re-implementation. But, you may need to adjust the 1 month delta changes for at-least one financial year. As Aman mentioned, payroll calculation data is stored in cluster tables, and you cannot manipulate. Only adjustments will help.

regards,

Bala.

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