Building Consistent Global GL Processes

By Mitresh Kundalia, SAP Practice Director, Quality Systems and Software

Contributing Editor: John Yuva, SAPinsider

When SAP first launched SAP S/4HANA, the latest iteration of its core ERP, the mantra was “Run Simple.” That marketing jargon was born out of a motivating factor for many finance professionals — to create a simplified general ledger (GL) concept, moving from many ledgers down to one for the entire business.

The impact is extensive — not just one particular module or process — everything is related once you have simple finance. The whole organization is impacted — no doubt the value is there, and no doubt the customer appreciates the value.

Many companies have adopted SAP S/4HANA at this point. And given SAP’s looming 2027 mainstream maintenance deadline, most SAP customers will upgrade. The upgrade options are well known — from the total reimplementation of the greenfield option to the more lift and shift nature of brownfield.

Regardless of whether an organization chooses to implement SAP S/4HANA via a greenfield or brownfield strategy, there are baseline preparation steps that need to be completed. Specifically, we recommend a strong focus on process consistency and data cleanup for all finance departments moving to SAP S/4HANA.

Consistent Global Processes

In the classic GL world, you are allowed to have one account, an A/R account in one company code, and Non A/R account in a second company code. Within the new GL world of Document Splitting and SAP S/4HANA, global consistency is expected. You want a consistent footprint of structures, currencies, chart of accounts and more.

Without establishing a consistent global GL process before implementing SAP S/4HANA, clients view the move as just a “technical upgrade. To truly optimize the impact of the investment, finance needs to simplify what it does to match the capabilities of the new system.

As you establish consistent GL processes, focus on infrastructure by building the foundation of your SAP S/4HANA implementation first. This will create a more structured world on the other side of the project when the system is live.

More Time Now Means More Value Tomorrow

It’s normal for companies to worry about how long an implementation of SAP S/4HANA will take — stakeholders will be eager to see a return on investment. It often “takes longer than you think,” but the reality of the timeline is usually predicated on the amount of data cleanup that is required before the implementation.

Perform a quick assessment on your current system data. We have a standard checklist with around 200 different items, such as accounts, profit centers, the core block foundational structures.

Next, determine the different types of targets you have in mind — new GL, document splitting, universal journal, and new fixed assets accounting. And depending on what your target scopes are, you can more accurately assess ballpark estimates for the cleanup work.

What are the metrics for how long an implementation should take? Considering the amount of cleanup involved, it can often be a four-to-eight-week process for global organizations. The more time you spend on cleanup initially, the more value you will ultimately attain in the end.

 

 What Does This Mean for SAPinsiders

• Conduct the necessary preparation work of assessing your GL processes before debating about whether you need a greenfield or brownfield implementation approach.
• It is critical to establish a consistent footprint for your new global GL processes to avoid finance complexities once the move to SAP S/4HANA occurs.
• Companies want to quickly see a measurable ROI on their investments but migrating to SAP S/4HANA and establishing clean and consistent GL processes can take weeks to months. However, the heavy work upfront will lead to greater value from the implementation.

 

Mitresh Kundalia

Mitresh Kundalia heads the SAP practice at Quality Systems & Software, a consulting firm specializing in SAP S/4HANA, SAP General Ledger, and complex System Landscape Optimization (SLO)-type reorganizations. Mitresh is widely acknowledged as a leading SAP expert, with multiple publications and an SAP-PRESS book to his credit. He has published more than 50 peer-reviewed articles and white papers, and he has given presentations at various SAP conferences and events.