Maintaining the Chart of Accounts

In the ever-changing world of business, it's crucial for companies to regularly update their chart of accounts (COA) to align with evolving business needs. This could involve adding new General Ledger accounts, modifying existing account attributes, or adjusting or creating new financial statement versions (FSVs).

Here are some common business scenarios that may prompt changes in a company’s chart of accounts:

Regular Updates in Daily Business Operations: As the day-to-day operations of your business evolve, so should your chart of accounts. In response to new journal entries in your production system, G/L account master data will require the addition of new accounts or changes to existing ones. For instance, when the attributes of existing accounts need modification, it might impact the financial statement versions. Regular maintenance helps your business to adapt smoothly to its changing needs.

Initial Configuration of SAP S/4HANA Cloud: When you implement SAP S/4HANA Cloud, your implementation team's first task is to adjust the standard chart of accounts (COA) provided by SAP to better suit your needs. This step occurs in your development system and is the first customization made to your chart of accounts.

Updates for New Scope Item or Country/Region: If you decide to add a new scope item or expand to a new country or region, your chart of accounts should also be updated. This ensures that your financial reporting continues to accurately reflect your business operations.

Changes During Special Cases: Special situations, like system upgrades, call for specific procedures. Following these procedures ensures your chart of accounts stays accurate and complete across all systems.

The chart of accounts in SAP S/4HANA Cloud is flexibly designed, a significant advantage. By customizing and regularly updating their chart of accounts, organizations ensure that it evolves in sync with their business. This enables organizations to maintain accurate and comprehensive financial reporting.

In the following sections, we will explore the procedures for maintaining charts of accounts under different scenarios.

Let's begin with the basics of maintaining the chart of accounts in the SAP S/4HANA Cloud systems.

In most cases, maintaining and updating a chart of accounts involves a variety of users performing various tasks in the development (D), test (T), and production (P) systems:

• During the initial implementation stage, the configuration experts will handle the configuration steps in the D system. The modifications are then transported to the test system T, and then to the P system. It’s important to know that the G/L account master data is read-only in both the T and P systems.

• During daily business operations, the accounting users can access and use the accounts in the configured chart of accounts in the P system. They do this using apps available in the SAP Fiori launchpad. If changes are needed in the G/L account master data, they submit a request to authorized users responsible for making these changes in the D system. These authorized users then implement the necessary adjustments in the D system. These changes are then transported to the T system for review and validation and eventually to the P system.

  This process ensures that any changes made to the G/L accounts are transported from the development system to the production system. To create an audit trail for changes to G/L accounts, you should use the Synchronize G/L Account Master Data app. This app can be used to manually transport these changes before the transfer is run. This app is crucial for maintaining an audit trail for these changes.

• In determined situations, such as during an upgrade, users with the appropriate authorization can make emergency corrections to the G/L accounts or financial statement versions first in the D system. These modifications can then be manually transferred to the P system using the Synchronize G/L Account Master Data app.

SAP S/4HANA Cloud aids in simplifying the maintenance of a chart of accounts (COA) by providing a set of standard G/L accounts and related settings. You can use these standard resources to map onto your existing chart of accounts and even expand it if necessary, during implementation.

During your organization's set up of SAP S/4HANA Cloud, a standard chart of accounts, like YCOA, is used. Keep in mind that this standard chart of accounts is a universal template for the Cloud solution and may not fulfill all unique industry or regional requirements.

When it's time to map your organization's G/L accounts to the standard accounts provided in the delivered chart of accounts, you'll define account determination during the Explore Phase of the implementation project. This is a significant part of the Fit-to-Standard Analysis process. Involving an experienced finance consultant in preparing this chart of accounts mapping and starting as early as possible is highly recommended.

The ongoing customization of the chart of accounts (COA) is far more than just an initial setup. It's a process that requires regular updates, including the addition of new general ledger accounts (G/L) and creation of varied financial statement versions (FSVs).

Members of the accounting team can view existing G/L accounts and FSVs in the production system. They do this by using specific applications from the SAP Fiori launchpad, such as the Manage G/L Account Master Data app for G/L accounts and the Manage Global Hierarchies app for managing FSVs.

However, the accounting team members are not authorized to modify these elements within the production system. When they identify a need for change in an existing G/L account or financial statement version, or when there's a requirement for a new G/L account, they must request assistance from a user with the appropriate authorization to perform the change in the development system. The authorized user then implements the change in the development system and loads it in an open transport.

Following this, the changes are transported to the testing system with the next transport. If the results are positive, the changes are transferred to the production system. There, the accounting team can view the adjustments in their applications on the SAP Fiori launchpad.

If a new G/L account or FSV is needed, or if you need to modify an existing G/L account, FSV, or account determination setting, a specific procedure must be followed:

When upgrading or adding a scope item or new country/region, there are certain steps you need to follow to maintain the chart of accounts (COA).

Standard procedures for maintaining a chart of accounts often involve transporting new or modified G/L accounts and financial statement versions (FSVs) from the development system to the test system, and ultimately to the production system.

But what happens when you're in the middle of a system upgrade or just before the transport release to the production system, and you need to make changes urgently? In such instances, an alternative manual method for transporting these changes is available, but this option only works for modifications already recorded in the current open transport. This allows them to be manually transferred to the production system.

The Synchronize G/L Account Master Data app is utilized to transfer these changes to the production system. You can use it to transport changes to the G/L account master data or a financial statement version. The app operates differently for these two types of changes:

• For financial statement version modifications: The app is used in the development system to download these changes to a text file. Then, you upload the text file using the app in the test and production systems and save the changes.

• For G/L account master data changes: In the development system, a direct transfer to the target system is started. The app is then used again in the test and production systems to activate the transferred changes. Even though the downloading and uploading of a text file is still an available option, direct transfer is the recommended method.

By using the Synchronize G/L Account Master Data app, you ensure the creation of an audit trail for changes to the G/L accounts. In fact, using this app is the only way to guarantee the creation of an audit trail for these modifications.

When you've added new scope items or you're branching out into a new region after your initial setup, you might need to introduce new G/L accounts and related settings into the system. Following this, you can execute any modifications, like renumbering the new G/L accounts using the associated configuration steps.

For example, let’s say that your company is expanding its business into Mexico. You would add new G/L accounts specifically tailored for Mexican accounting standards into your system. You could then renumber these G/L accounts to match your global account strategy, using the dedicated configuration steps.

Besides the renumbering and renaming of newly set up G/L accounts, you can also rename and renumber existing G/L accounts in your production system, as long as they have zero postings.

For this type of content, any changes implemented are saved directly in the current open transport.

For better control over the G/L accounts and assigned company codes you use the Implementation Status feature in the system.

This function controls which accounts are transferred to the production system. Three implementation statuses are available:

• I - In Process
• N - Not Used
• P - Productive Use

Accounts created through content activation are set to I by default. You can change these to N or P.

Accounts with N or I remain in the lowest system and are not available in higher systems. In a two-system landscape, these accounts are only available in the quality system, and in a three-system landscape, only in the development system.

Only accounts with status P are transported to the production system. This function enables the control of which accounts should be active in the production system.

You can also use the implementation status to remove unwanted accounts from your production system. As long as no postings exist, change the status to N or I. The accounts will then remain in the lowest system. Changing the status to N or I simultaneously sets a posting block for the account in the production system.