Dear,
Building a multi-dimensional P&L facilitating the analysis of the companies profitability as per market segments by integrating the sales, profit/loss and cost related data from other modules like Sales and Distribution , Production, Materials Management, etc. has always been one of the greatest SAP capabilities.
The Profitability Analysis module of SAP has delivered this functionality in two structures, the Account Based and Costing Based Operating Concern.
In a nutshell the Account Based PA stores costs and revenues in GL Accounts and Costing Based PA stores costs and revenues in Value Fields.
Value Fields are more flexible than GL Accounts as they represents cost and revenue splits (condition and flow types) and groups, but they also generate reconciliation challenges with Financial Accounting as it is based in GL-Accounts.
SAP Analytical Banking has always had some parallelism with Profitability Analysis. SEM Banking , the precursor of Bank Analyzer more than 20 years ago, offered a multi-dimensional P&L Account of Financial Instruments using Characteristics and Value Fields in an Operating Concern. The technical parallelism with Cost-Based Operating Concern of Profitability Analysis was clear.
When some years later, SAP released Bank Analyzer Accounting for Financial Instruments (Merge Scenario) they included a multi-dimensional Financial Statement for Financial Instruments, which obviously included a multi-dimensional P&L.
In this case, SAP also included the Account-Based (GL-Accounts) Financial Statement, and not only the Costing-Based Financial Statement.
Additionally, the SAP architects of Bank Analyzer included something new, the consistency between Posting Key Figures (Value Fields in SAP-Financial Database terms) with GL-Accounts.
As a difference to “classic” Profitability Analysis in which there was no technical link between Value Fields and GL-Accounts, SAP Bank Analyzer forced a technical link between GL-Accounts and Posting Key Figures (Value Fields) facilitating the reconciliation between the Costing-based and Account-based Financial Statement.
Note, that this concept of a technical link between GL-Accounts and Posting Key Figures (Value Fields) was available in the Bank Analyzer space more than 15 years ago.
Sadly, even today, there are some so-called “Bank Analyzer consultants” who do not understand the business sense of the Posting Key Figures and how they must guarantee the reconciliation between the Account-based and Costing-based Financial Statement of Financial Instruments in Bank Analyzer, but this is due to their lack of knowledge and not to any technical limitation of SAP Bank Analyzer.
The concept of Posting Key Figures remained in the Bank Analyzer Subledger-Scenario which integrated the Financial Statement of Financial Instruments in the SAP ECC General Ledger providing a complete Financial Statement in SAP-ECC.
The main difference between the Subledger Scenario and the Merge Scenario of Bank Analyzer is that the second did not have integration with the General Ledger, and the complete Financial Statement (including Financial Instruments and other GL-Accounts) was delivered in Business Warehouse.
With Smart-AFI, SAP offered an improved integration between Posting Key Figures (now they are called Subledger Accounts but they are basically the same concept), and GL-Accounts, including a new concept called Financial Statement Sub-Item Category which determines how the Subledger Account (Posting Key Figure or Value Field) and the GL-Account must behave, and assuring the consistency between the Account-based and the Costing-based Financial Statement of Financial Instruments.
When it comes to the last evolution of Bank Analyzer which is FPSL, it does not present any major change infront of Smart-AFI on this area. They both use the same concept of Financial Statement Subitem Category for guaranteeing the reconciliation between the Account-based and the Costing-based Financial Statement of Financial Instruments. There are some improvements in the integration with the General Ledger, but nothing new in the reconciliation between Subledger Accounts (Posting Key Figures or Value Fields) and GL-Accounts.
Finally, SAP has brought this topic to the new concept of Profitability Analysis of S4 HANA (and last Enhancement Packages of ECC) with the release of the new Combined Profitability Analysis.
Combined Profitability Analysis offers a multi-dimensional P&L with both Account-based (GL-Accounts) and Costing-based (Value Fields) approach, but instead of bringing the two structures in separated data-models which do not guarantee the reconciliation between GL-Accounts and Value Fields, it does offer a technical link between GL-Accounts and Value Fields for providing the flexibility of the two approaches, but without the reconciliation issues of the classic Profitability Analysis.
This is just the beginning; the integration capabilities of the SAP architecture will facilitate a seamless integration between the Financial Statements of Financial Instruments and other Analytical elements of the company, and the new functionalities in Profitability Analysis are just an advancement.
Looking forward to read your opinions.
K. Regards,
Ferran.
www.capitency.com
Join the SAP Banking Group at: https://www.linkedin.com/groups/92860
Visit my SAP Banking Blog at: http://sapbank.blogspot.com/
Let's connect on Twitter: @FerranFrancesGi
Ferran.frances@capitency.com
Building a multi-dimensional P&L facilitating the analysis of the companies profitability as per market segments by integrating the sales, profit/loss and cost related data from other modules like Sales and Distribution , Production, Materials Management, etc. has always been one of the greatest SAP capabilities.
The Profitability Analysis module of SAP has delivered this functionality in two structures, the Account Based and Costing Based Operating Concern.
In a nutshell the Account Based PA stores costs and revenues in GL Accounts and Costing Based PA stores costs and revenues in Value Fields.
Value Fields are more flexible than GL Accounts as they represents cost and revenue splits (condition and flow types) and groups, but they also generate reconciliation challenges with Financial Accounting as it is based in GL-Accounts.
SAP Analytical Banking has always had some parallelism with Profitability Analysis. SEM Banking , the precursor of Bank Analyzer more than 20 years ago, offered a multi-dimensional P&L Account of Financial Instruments using Characteristics and Value Fields in an Operating Concern. The technical parallelism with Cost-Based Operating Concern of Profitability Analysis was clear.
When some years later, SAP released Bank Analyzer Accounting for Financial Instruments (Merge Scenario) they included a multi-dimensional Financial Statement for Financial Instruments, which obviously included a multi-dimensional P&L.
In this case, SAP also included the Account-Based (GL-Accounts) Financial Statement, and not only the Costing-Based Financial Statement.
Additionally, the SAP architects of Bank Analyzer included something new, the consistency between Posting Key Figures (Value Fields in SAP-Financial Database terms) with GL-Accounts.
As a difference to “classic” Profitability Analysis in which there was no technical link between Value Fields and GL-Accounts, SAP Bank Analyzer forced a technical link between GL-Accounts and Posting Key Figures (Value Fields) facilitating the reconciliation between the Costing-based and Account-based Financial Statement.
Note, that this concept of a technical link between GL-Accounts and Posting Key Figures (Value Fields) was available in the Bank Analyzer space more than 15 years ago.
Sadly, even today, there are some so-called “Bank Analyzer consultants” who do not understand the business sense of the Posting Key Figures and how they must guarantee the reconciliation between the Account-based and Costing-based Financial Statement of Financial Instruments in Bank Analyzer, but this is due to their lack of knowledge and not to any technical limitation of SAP Bank Analyzer.
The concept of Posting Key Figures remained in the Bank Analyzer Subledger-Scenario which integrated the Financial Statement of Financial Instruments in the SAP ECC General Ledger providing a complete Financial Statement in SAP-ECC.
The main difference between the Subledger Scenario and the Merge Scenario of Bank Analyzer is that the second did not have integration with the General Ledger, and the complete Financial Statement (including Financial Instruments and other GL-Accounts) was delivered in Business Warehouse.
With Smart-AFI, SAP offered an improved integration between Posting Key Figures (now they are called Subledger Accounts but they are basically the same concept), and GL-Accounts, including a new concept called Financial Statement Sub-Item Category which determines how the Subledger Account (Posting Key Figure or Value Field) and the GL-Account must behave, and assuring the consistency between the Account-based and the Costing-based Financial Statement of Financial Instruments.
When it comes to the last evolution of Bank Analyzer which is FPSL, it does not present any major change infront of Smart-AFI on this area. They both use the same concept of Financial Statement Subitem Category for guaranteeing the reconciliation between the Account-based and the Costing-based Financial Statement of Financial Instruments. There are some improvements in the integration with the General Ledger, but nothing new in the reconciliation between Subledger Accounts (Posting Key Figures or Value Fields) and GL-Accounts.
Finally, SAP has brought this topic to the new concept of Profitability Analysis of S4 HANA (and last Enhancement Packages of ECC) with the release of the new Combined Profitability Analysis.
Combined Profitability Analysis offers a multi-dimensional P&L with both Account-based (GL-Accounts) and Costing-based (Value Fields) approach, but instead of bringing the two structures in separated data-models which do not guarantee the reconciliation between GL-Accounts and Value Fields, it does offer a technical link between GL-Accounts and Value Fields for providing the flexibility of the two approaches, but without the reconciliation issues of the classic Profitability Analysis.
This is just the beginning; the integration capabilities of the SAP architecture will facilitate a seamless integration between the Financial Statements of Financial Instruments and other Analytical elements of the company, and the new functionalities in Profitability Analysis are just an advancement.
Looking forward to read your opinions.
K. Regards,
Ferran.
www.capitency.com
Join the SAP Banking Group at: https://www.linkedin.com/groups/92860
Visit my SAP Banking Blog at: http://sapbank.blogspot.com/
Let's connect on Twitter: @FerranFrancesGi
Ferran.frances@capitency.com
1 comment:
Good blog
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