Does SAP Simple Finance 2.0 change the Ledger concept in SAP?

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SAP introduced New GL renamed later to SAP GL with

Leading Ledgers and Non Leading Ledgers almost 10 years ago   This

was meant to replace good old  solutions like parallel accounts,

dummy LEs, special purpose ledgers that SAP customers have been using for a

long time to report financials under multiple accounting standards. There are

still quite a few customers who are on latest versions of SAP but still use

parallel accounts approach.   I asked a few why and did not get a

good answer and I surmised that their finance users got used to  the

Parallel accounts approach and did not want to enhance the functionality. Wherever

I designed SAP GL post 2005, I recommended 2 ledgers minimum and 3 ledgers

in few cases : Leading Ledger 0L for US GAAP, One Non leading ledger for local

GAAP and another Non leading ledger for IFRS if there is as dual reporting

requirement in local countries during transition period

In early 2015 SAP released SFIN 2.0 and introduced

Appendix Ledger (AL) concept. I was in a S4/HANA workshop recently with finance

stakeholders who are considering implementing S4/HANA and they had several

questions on what this new AL ledger is and also how the Leading and Non

leading ledgers get impacted with SFIN 2.0. I thought of sharing key changes to

the ledger design with SFIN 2.0. I had to get a bit technical on this topic and

apologies for that.

Leading Ledger 0L 

Leading ledger 0L still stays in SFIN 2.0 and US

Customers should use this primarily for US GAAP reporting. However the two

underlying physical tables in which all the transactions are stored, FAGLFLEXA

(line item table) and FAGLFLEXT (totals table) are no longer there and are

replaced by a new table ACDOCA which is the detailed line item table. This

table has 360 + fields and provides the basis for majority of reporting in SAP

both statutory and managerial going forward.   BSEG table will still

be there though I have a feeling that this is probably temporary and over a

period of time ACDOCA will be the solitary table that stores all

Financial/Managerial data. In a perfect world why we should have more than two

tables in ERP systems for financials - one for master data and one for

transactions. With SFIN 2.0 almost every total table in SAP will go away

because totals can be done on fly as the application logic runs on HANA

database which is fantastically fast. 0L Leading Ledger by default gets

assigned to all legal entities (Co Codes in SAP) and no change to that in SFIN

2.0.  SAP document number that gets generated when you post financials

postings is now unique regardless of which ledger you post which is different

to multiple document numbers in previous versions. 

Non Leading ledgers 

Non leading ledgers still stay and can be used for

select legal entities that need to report in different accounting standards.

Normally when you post an Accounting document, you do not post to a ledger but

to a ledger group. Ledger group is where you group the Leading ledger and

associated Non leading ledgers so that you enter Journal entries only once and

all the ledgers within that ledger group get updated with values. If you have

to make adjustment postings for different accounting standards you do that only

in specific Non leading ledgers. Similar to Leading Ledgers, Non Leading Ledger

financial postings that were previously stored in FAGLFLEXT and FAGLFLEXA in

ECC 6 will be replaced with new table ACDOCA in SFIN 2.0. You can have a different

fiscal calendar for the same Legal entity – one for leading ledger and one for non- leading ledger and there is no

change to that. You can continue to close periods in Non leading ledger though

they are open in Leading ledger and vice versa. So basically the functionality

for Leading and Non leading ledgers did not change though the underlying tables

changed.

Appendix ledgers 

This is a new concept that was introduced in SFIN 2.0.

These are new ledgers that sit on top of the Leading ledger. When you create an

Appendix ledger in SAP, you flag it as “Appendix Ledger” and link that to a base leading ledger. Unlike Non

leading ledger, Appendix Ledger cannot have a separate fiscal year different to

Leading ledger but at the same time, you can open and close fiscal periods

separately from Leading ledger. All the financials postings that happen in

Leading ledger 0L are available for reporting purpose in Appendix Ledger though

they are not physically updated. In addition to that, you can manually post

management reporting adjustments directly in Appendix Ledger. Please note that

in case of Non Leading Ledgers, you can post manual postings and system

generated postings like foreign currency valuations etc but it is not the case

with Appendix ledger 

Now what is the Use case for Appendix ledger? From

what I heard from SAP Architects and my read of partner documentation, the main

use case is to give business a “Management” Ledger without impacting your Financial/Statutory reporting ledgers like

Leading and Non leading ledgers. You do not get AP/AR details in AL and the

only way you update Appendix ledgers is through manual postings with limited

SAP transactions. I am yet to hear from any ramp up Customers on how they used

AL and their experiences. SAP documentation, release notes etc are also still

light on this concept. In my view, the Use cases for Appendix ledger are still

be established with real business benefits and so as of now I am reserving my

recommendation on using AL for new implementations till there is better clarity

on this functionality from SAP and we hear some success stories.