Working with Semantic Tags

It is time for Carlo to take a closer look at some of the settings available in a financial statement version. He is particularly interested in the semantic tag parameter, which can be customized to meet Bike Company’s specific reporting needs.

Semantic tags in SAP S/4HANA Cloud are textual identifiers used to highlight key figures in financial statement versions (FSVs).

These tags are linked to structures of financial statement versions (FSVs), easing the calculation of metrics and key performance indicators (KPIs) for analytical reporting.

Standard semantic tags, along with incorporated calculation logic, are provided as a standard feature of the system within the following semantic tag groups:

• BS (Balance Sheet Group)
• IS (Income Statement)
• FIX (Fixed Semantic Tags).

Semantic tags provide a wealth of benefits when applied to financial statement versions in SAP S/4HANA, such as: improved data accessibility, interpretation and consistency, enhanced reporting capabilities and simplified data querying.

The special nodes also use pre-delivered semantic tags, for example, for the calculation of Total Assets or Liabilities and Equity.

Moreover, additional semantic tags can be assigned to structuring components of a financial statement version, such as financial statement hierarchy nodes and G/L accounts. This enables the system to determine and exhibit accurate results in financial statements, like balance sheets, income statements, and cash flow statements.

Beyond the standard semantic tags that are offered, SAP S/4HANA Cloud also allows you to construct your own custom semantic tags to cater to your unique reporting requirements. These custom tags need to be associated with the correct financial statement versions (FSVs).

Advanced technical users can subsequently create customized analytical queries to reference the new semantic tags in order to use them.

For instance, Carlo needs to create a semantic tag that captures data specific to local accounting reporting standards. He can create the custom semantic tag and assign it to the corresponding financial statement version that is used to represent the local accounting reporting standards. Aligning his custom semantic tags with the FSV ensures that those specific metrics are accurately represented in his reports.

However, making these changes in the system might not be enough. Eventually, he will also have to adjust the correlating analytical queries in order to accommodate these modifications. For example, if he created a new semantic tag called 'Local GAAP Adjusted Sales', he would need to update his sales report queries to include this tag. This way, his reports will pull information based on the new semantic tag, providing a more detailed and specific analysis as per Bike Company’s needs.

The advantage of this procedure is that it is very easy to maintain the new semantic tag in the financial statement version, for example, to include or exclude certain accounts. Once this update of the semantic tag is completed, the reports or KPIs using it will not need further modification.

Leveraging the pre-existing semantic tags is a seamless process that can be undertaken directly from the Manage Global Hierarchies app. Within this application, users can readily access the column dedicated to semantic tags, which aptly facilitates the association of existent semantic tags to financial statement items, accounts, or functional areas pertinent to a specific financial statement version. For maintaining consistency in data, these pre-set semantic tags cannot be altered within the financial statement version.

However, for manually created or added items, accounts, or functional areas, it's crucial to manually link them to the existing semantic tags. For example, once the development of the financial statement version is complete, preexisting semantic tags like COGS_MATI (Machine Time) or COGS_PERT (Personnel Time) must be linked to the respective financial statement items or accounts. Linking these semantic tags is necessary if you intend to use them.

Through this process of setting up semantic tags, you pave the way for more efficient, understandable, and streamlined financial operations within SAP S/4HANA.

Now, let's practice adding semantic tags to a financial statement version in the next activity.

In addition to using pre-delivered tags, users can create their own specific semantic tags through the Central Business Console. After setting up the required groups, the system allows the management of semantic tags.

Here is where you can find two key configuration activities required to set up the semantic tags:

• Define Semantic Tag Group activity: Here, you manage semantic tag groups, which categorize the semantic tags. The pre-delivered groups are accessible and can be copied into new additional groups, which can be alternatively manually added, without using the copy function.
• Define Semantic Tags for Financial Statement Versions activity: The pre-delivered tags can be found here, already associated to their correspondent semantic tag group. They cannot be changed or deleted, or else the reports or KPIs making use of them would become inaccurate. However, they can be copied into new semantic tag groups tailored to your individual requirements.

To create a new semantic tag, you need to create an ID and a name/long name, and you need to assign it to a tag group.

As soon as the new tag is saved in the system, it becomes immediately available to be assigned to a financial statement version, as previously explained.

Some analytical apps require financial key performance indicators (KPIs) to be calculated based on financial statement version nodes. These KPIs are calculated using semantic tags assigned to these nodes.

For this purpose, the Manage KPI and Reports app can be used by authorized users in charge of this setup.

The Manage KPIs and Reports app is a comprehensive app that allows designated users to create analytical applications using key performance indicators (KPIs), reports, multidimensional reports, and stories. These applications can then be accessed directly from the SAP Fiori launchpad. The app allows users to configure metrics in the KPIs, visualize data in charts or tables, and analyze the data to improve the performance of different business units within an organization.

The Manage KPIs and Reports app is integrated with SAP Analytics Cloud. This integration enables you to analyze and interact with real-time data, enhancing the value they can derive from SAP S/4HANA Cloud systems.

The KPIs are based in semantic tags. Remember that semantic tags are short text identifiers representing key figures, which provide stability across reports and KPIs. Semantic tags can be used to create KPIs to improve your financial management. Instead of rebuilding your reports every time you generate a new FSV, the semantic tags maintain consistency, consequently reducing your workload. To change the selection, all you need to do is choose the relevant FSV during runtime.

Any changes to your FSV structure are automatically updated in the reports and KPIs via semantic tags, reducing your coding tasks. You can also perform multi-dimension drill-downs using semantic tags, for example, by G/L account, cost center, profit center, and fixed asset transaction type.

As an example, Carlos needs to gather Bike Company's working capital data from various reports. Any addition of a new G/L account would typically require him to adjust all his structures and queries – a process that is not only tedious and time-consuming, but also prone to errors. Thanks to semantic tags, he can now assign these semantic tags to sections of the hierarchy. This eliminates the need to rebuild his queries for each report as the tags will do it for him. This ensures that the data returned by his pre-existing and newly created queries is always accurate.

Let’s have a look at the available key performance indicators (KPIs) that are built using two main components, measures and dimensions:

With SAP S/4HANA embedded analytics, the Manage KPIs and Reports app allows you to generate financial statement-based KPIs. These KPIs serve as a valuable tool for monitoring and addressing business issues proactively. By leveraging the semantic tags, the analytical CDS view C_FinancialStatementKPI, in conjunction with the analytical CDS view I_ActualPlanLineItemSemTag, calculates a range of standard financial KPIs.

The resulting KPIs provide a comprehensive description of the KPIs and their association with the corresponding financial statement-based measure in the analytical CDS view.

The related measures for this KPI:

• KPI Working Capital
• Current Assets
• Current Liabilities

The assigned semantic tags for this KPI:

• Current Assets: CURASSET
• Current Liabilities: - CURLIABEQU * -1

We can see with this example how semantic tags are the basis for an optimized setup and maintenance of KPIs in the system.