Document Split - zero balancing

[former_member692055]

Dear,

We are just enabling document split in our company - the split will based on two characteristics - profit center and segment, but business does not want to enable zero balancing. Could you please let me know what consequences will that have (not having zero balancing enabled when having two characteristics?)

Second question - how the zero balancing GL account is reflected on the financial statement? Is there any balance on that account?

Thank you very much

[sanilbhandari · Accepted solution]

Hello ikyuss

The main purpose of document splitting in new GL is to enable a financial statement at other dimensions like profit center and segment in addition to a company code. If you do not have zero balancing, your financial statements will not be balanced. A simple example.

Prepaid Exp Accrual A/c Dr PC1

To Service Exp Cr PC2

If we look at this accounting journal itself, the debit and credit do not match at Profit center level. Enabling zero balance account, the above entry in New GL View would look as below:

Prepaid Exp Accrual A/c Dr PC1

Zero Balance Clearing A/c Dr PC2

To Service Exp A/c Cr PC2

To Prepaid Exp Accrual A/c Cr PC1

The zero balance account will balance out the GL Accounts at all levels. This is one of the improvements in New GL over classical GL with document splitting. Why would you want to do this at month end manually, when the system can automatically take care of everything and reduce your month end closing efforts? You should explain this to your customer

The zero balance account in financial statement should ideally have zero balance at company code level but will have balances at Profit center or segment level, so that trial balance at that level will have equal debits and credits.

Hope this helps.

Thanks & Regards,

Sanil Bhandari

[former_member692055 · Accepted solution]

Dear Sanil Bhandari, thank you, that asnwers my doubts and questions