SAP General Ledger

SAP General Ledger: An Overview and Key Considerations

What Is SAP General Ledger?

SAP General Ledger (G/L) accounts support the recording of all business transactions, updating balances in real time to provide an extensive view of an organization’s business activities. The former version of SAP General Ledger is referred to as Classic General Ledger (Classic G/L). New G/L leverages an extended data structure that helps finance managers reduce the need for periodic closing activities to synchronize Financial Accounting (FI) and Controlling (CO) modules. This ensures accurate accounting for financial statements.

New SAP General Ledgers support “parallel accounting” functionality, allowing organizations to maintain multiple ledgers for various statutory accounting standards or introduce a special purpose ledger. SAP customers can integrate SAP General Ledger with all operational areas of the company via SAP ERP components to track external and internal transaction postings and settlements. The transactions include business activities originating from profit centers and subsidiary companies, ensuring complete accounting information for generating accurate internal and external financial reporting across the organization.

Key SAP General Ledger functions for entering and evaluating posting data:

• Group-level or company-level accounting capacity
• Subledger items automatically posted to the appropriate general ledger accounts (reconciliation)
• Tight integration of parallel general ledgers and cost accounting areas, allowing for real-time synchronization
• Multiple balance sheet views and account displays of financial information to provide real-time evaluation of and reporting on current posting data.

Key Considerations for SAPinsiders

SAP General Ledger: An Overview and Key Considerations

What Is SAP General Ledger?

SAP General Ledger (G/L) accounts support the recording of all business transactions, updating balances in real time to provide an extensive view of an organization’s business activities. The former version of SAP General Ledger is referred to as Classic General Ledger (Classic G/L). New G/L leverages an extended data structure that helps finance managers reduce the need for periodic closing activities to synchronize Financial Accounting (FI) and Controlling (CO) modules. This ensures accurate accounting for financial statements.

New SAP General Ledgers support “parallel accounting” functionality, allowing organizations to maintain multiple ledgers for various statutory accounting standards or introduce a special purpose ledger. SAP customers can integrate SAP General Ledger with all operational areas of the company via SAP ERP components to track external and internal transaction postings and settlements. The transactions include business activities originating from profit centers and subsidiary companies, ensuring complete accounting information for generating accurate internal and external financial reporting across the organization.

Key SAP General Ledger functions for entering and evaluating posting data:

• Group-level or company-level accounting capacity
• Subledger items automatically posted to the appropriate general ledger accounts (reconciliation)
• Tight integration of parallel general ledgers and cost accounting areas, allowing for real-time synchronization
• Multiple balance sheet views and account displays of financial information to provide real-time evaluation of and reporting on current posting data.

Key Considerations for SAPinsiders

Leverage New G/L functionality for enhanced transaction drilldown capability and auditability. Online document splitting is standard functionality in New G/L, allowing finance managers to review all business transactions across various levels. Those levels include account information, journals, transactions figures and totals, and balance sheet profit/loss evaluations, to audit individual transactions in real time, supported by streamlined access to original documents, line items, and monthly debits/credits.

Evaluate core reporting requirements before establishing new G/L accounts. Information provided for statutory and management accounting tasks is ultimately governed by G/L master data. Business stakeholders or subject matter experts should confirm business processes and master data dependencies properly align with how GL accounts and sub-accounts are defined, to support automation opportunities and integration initiatives.

Consider migration to SAP S/4HANA as an opportunity to optimize G/L accounts. SAP provides pre-built functionality for standard chart of accounts (YCOA) as best practices for organizations, using existing chart of accounts. Organizations can leverage additional granularity from 350+ fields and dimensions, to achieve business process efficiencies in the areas of account maintenance and financial closing activities. Furthermore, finance managers can benefit from new G/L and Universal Journal functionality to update existing chart of accounts to better align with legal entities and business process needs across industry, operating regions, company size, corporate structure, etc.