Change in SAP-FI enterprise structure after GO -LIVE

[vijay_mahajan]

Dear Experts ,

We have typical issue here. In the current sap org. Structure , the client has defined legal entities as profit centres. !!The company has gone live on sap technically before one year. However the the data entry in SAP is totally in shamble and there are challenges in getting profit and loss account and balance sheets from existing state of data entry in SAP.

I understand that this is completely against the sap best practice recommendation. However to set right the enterprise structure at this juncture is a major decision and we neeed to provide solid supportive points to convince the client for this major change.

Is there a viable way to derive correct profit and loss statement and B/s from sap using profit centre ? Will that be technically a robust solution ?

And if not , what could be the workable approach to redesign org structure ? what timeline ? data entry during transition period where to do ? etc

Request inputs from you experts ...

points will be rewarded for sure

Thanks

Vijay Mahajan

[Former Member]

Hi Vijay,

Yes PnL or Balance Sheet can be derived at Profit Center level, however Profit Center are more at sub-set level rather than legal entity. In your case, what has been defined as Co. Code? Where are the profit center tagged presently? Plus other than SAP FI module which other modules are in use for ex. MM are the inventory/stock.

Redesign of enterprise org. structure depends not only on the base of accounting entries but it will also depend on the impact over other modules plus present data volume. Profit center can definitely be criteria to build Profit and loss Statement and Balance Sheet.

Just a thought, if multiple module aren't getting impacted below option can be thought of -

a) Create a new company code at Legal Entity level

b) Establish all necessary enterprise structure - extended the same Chart of Accounts & GL Accounts to the new co. code.

c) Similar action item for Vendor Master Data & Customer Master data can be performed for extending it to the new co. code.

d) Design the Cost Center/Profit Center hierarchy as the business requirement - for ex. Product Line or Area of Business Operation can be treated as Profit Center. And Profit & Loss plus Balance Sheet can be derived at the same level. Defining of Cost Center/Profit Center depends on at what level an accounting entry can be segregated.

e) Transfer the Open Items from the existing to the new co. code - Vendor/Customer/GL Line Items or balances as appropriate. Make sure the balances/open item should be at profit center level to derive the PnL & balance sheet.

f) Any open Purchase Order or Stock also needs to be migrate to the new co. code

g) Depreciation & Asset Migration might have to adopt the strategy of mid year

f) Post migration - block all the master data and ensure that respective balances are migrated to the new co. code.

A blackout period needs to be determined in case when the balances are transferred from old to new co. code. All the accounting entries during black out period have to be posted manually post migration.

But again the above assumption or option only holds true depending upon the present enterprise structure and complexity.

Seems challenging but interesting.

Jaymin B.

[former_member323034]

Dear Jaymin ,

Many thanks for sharing your views !

Modules affected apart from FI is SD only; which posts revenue entries in SAP through interface from a non- sap system. MM is largely non-operational currently.No other module is currently configured.

So there are 2 options :1 - To Redefine org structure and Re implement the solution - with the road map you suggested above OR

2- To live with existing structure and develop customized z reports for reporting where required.

The first one is clear to me.

About the second option , I am not sure whether it will really be able to build custom reports unto the mark. Because technically a "Company code can not replace Profit Center" as far as Org structure design is concerned. For example currently there is a virtual company code defied which consist of multiple legal entities.Below legal entities there are profit centers. As per standard process ,Profit centers are assigned to company code which in this case is a virtual company code. Hence deriving legal entity wise TB or B/s will depend on identifying group of profit centres which come under one legal entity and then to derive financial statements for legal reporting ...Currently they have custom reports for this but reports are not stable.. We did not got a chance to study the sap system so far due to lot of authorization issues.

Honestly ,I am not able to visualize possible issues which may come across in configuration and reporting by compromizing on the Org Structure design ..Do you think we can go ahead with option 2 with advantage ?

Thanks

Vijay

[Former Member]

Vijay -

I won't prefer to have a customize report solution as bringing all the possibilities into a customize report isn't feasible or possible. Maintenance of Z report might be high.

As only FI/SD module is in scope, I would prefer to go for re-structuring of org. structure. It might be a tough task initially but that would ease the future SAP roadmap in your organization. Expanding SAP module will be lot more easier if a definite Legal entity is defined as Co. Code and subsequent org. elements are re-designed.

Best Luck.

Jaymin B.