Using Manage Global Hierarchies for Balance Validation

Let's now build on Max's understanding of the basic steps in the Balance Validation process by exploring how he can create Balance Validation Rules more effectively. To do this, Max will have to use some additional functionalities

One of these additional functionalities is the 'grouping' or 'aggregation' of values based on specific requirements. In some cases, you may need to aggregate values according to requirements, such as Cost Center or General Ledger Account groups. This is where the Manage Global Hierarchies app can help. The SAP Manage Global Hierarchies app is used for creating and maintaining hierarchies and groups within SAP S/4HANA.

For example, Max wants to validate that the total expense amount in the Administrative Cost Centers does not increase more than 5% from last year. To do this, Max would use the Manage Global Hierarchies app to create a grouping of all the Cost Centers that are considered Administrative that can be used in a Balance Validation rule.

Balance Validation rules are created using criteria that exists in the Universal Journal. This allows you to use any financial accounting or management accounting data that is available.

You can create rules in two ways:

1. By using General Ledger Accounts directly.
2. By using the Manage Global Hierarchies app.

Not only can you use G/L Account Hierarchies, but other Master Data Hierarchies can also be used, such as a Cost Center Hierarchy and Profit Center Hierarchy. As with General Ledger Accounts, you can specify these individual values too.

Let's explore how to create a Global Hierarchy.