Harmonization of the chart of accounts in SAP

Harmonizations

SAP system harmonizations can be performed when a company is required to reorganize controlling facilities, merge business units, relocate plants, change the chart of accounts, etc. They are often forced by a change in the legal conditions in the country where the business is conducted, or by the desire to organize the data in order to increase the efficiency of reporting. They can also serve as preparation before another major system change.

SAP system harmonizations are characterized by a high degree of process complexity. They typically involve activities performed within a single, existing system. They assume the ordering of data according to certain rules, executed in an appropriate, strictly defined sequence.

Solution

In one of the international capital groups, SNP Poland (now All for One Poland) conducted a project of harmonization of Chart of Accounts for several companies, whose financial and accounting processes are performed in Shared Service Center. The purpose of converting several chart of accounts to one was to standardize processes and simplify financial statement analysis for companies in the region.

SAP Landscape Transformation (SAP LT) transformation tools were used in the project implementation.

There were a number of benefits associated with using the SAP LT tool:

• Harmonization of chart of accounts including: conversion of chart of accounts, General Ledger accounts, secondary cost elements, groups, transaction variants, programs,
• unification of financial and accounting processes and simplification of financial statements analysis,
• short time of unavailability of the production system,
• harmonization conducted in one weekend,
• Project implementation on time, on budget and within the agreed scope.

Conversion process

The first project meetings between SNP consultants and client staff were devoted to gathering basic requirements for the work. The project tasks were divided into phases. During the project, after each of the completed migration test phases, the detailed task plan was continuously consulted and adjusted to the reality.

Project phases:

Part I:

• project preparation;
• business plan;

Part II:

• implementation (a) – customization of SAP system configuration, interfaces and ABAP programs (working on a copy of SAP system) – planned and executed by the customer;
• implementation (b) – configuration and preparation of the SAP LT tool;
• migration tests (unit test + preparatory tests);
• Production system conversion;
• hypercare (+ support after the end of the billing period).

One of the key elements of correct harmonization is account mapping – assigning a new target account from the group chart of accounts to the old source account. During the mapping operation, account control parameters at the level of the so-called segment A (tables SKA1, CSKA) and segment B (tables SKB1, CSKB) should be taken into account. At the analysis stage, there was a need to create additional real-time analysis support programs.

In order to meet customer requirements, the SNP transformation team has prepared the following programs to support the transformation preparation:

• a program that searches the client code for hard-coded strings (e.g., account numbers);
• a program that analyses account mapping against control parameters for a given account (master account data and cost elements);
• a program that compares previously separated master data. Compares data that has been assigned to the same “target account" based on configuration.

By using additional software to detect account mapping inconsistencies, it was possible to correctly map thousands of source accounts to the correct target accounts.

The account mapping process is associated with a high commitment of employees on the client’s side. Therefore, it is a good project practice to schedule recurring meetings to determine details, e.g., regarding G/L accounts and secondary cost elements.

The transformation tool checks the consistency of chart of accounts mappings:

• the existence of an old account value;
• entering the same old account value multiple times;
• the actual assignment of the entered company code to the appropriate chart of accounts.

Additionally, it checks the completeness of the mapping and allows you to answer questions:

• Are all General Ledger accounts and secondary cost elements included in the mapping as original values?
• Are all General Ledger accounts used in the company code included in the mapping as original values?
• Are all secondary cost elements that are used in participating control areas included in the mapping as original values?

The software provided by SNP Poland allowed for quick verification of consistency and completeness of the mapping during each test phase. In total, several thousand General Ledger accounts were mapped).

Conversion of chart of accounts

Due to the significant amount of data being converted in harmonization projects involving a large number of accounts, entities, and company codes, a major challenge of the conversion process is usually the time that systems are unavailable for production harmonization. In this case, the estimated conversion time using SAP LT in the runtime estimation step showed that the transformation should complete in up to 48 hours. The downtime of the production system was also scheduled this way. The use of additional test phases by our consultants to optimize the conversion process made it possible to shorten it. Ultimately, the entire account plan conversion process closed within 23 hours over the migration weekend. The detailed schedule of tasks, as well as the close cooperation of the migration team, contributed to this success. It is worth noting that the work was done remotely.

Chart of Accounts transformation/harmonization projects have a high degree of process complexity. The transformation itself depends heavily on the correct mapping of accounts/cost elements, which can be difficult with a large number of them and a large number of company codes.

After the migration was completed, SNP (now All for One Poland) consultants were available to the client during the support period. During this time, bug reports were actively resolved. Consultants also took part in the closing of the billing month – this is a real test of the correctness of the conversion.

As a result of the project, one group chart of accounts was obtained, along with access to historical data (the data history was adjusted as if the company had always used one consistent group of accounts, the old chart of accounts remained only in the archive system).