FI Scenario - Period End Procedures 

Purpose

This topic discusses the implications of the fiscal period end for a corporation or companies with plants located in multiple time zones.

Prerequisites

You may have one or both of the following situations:

  1. Companies located in multiple time zones.
  2. Separate entities within a corporation (for example, with plants which are located in separate time zones).

Either situation requires that you consider certain factors surrounding period end procedures in order to minimize the impact of the period change on all locations.

Process Flow

Consider the following when defining your period end procedures:

  1. System Date – What is the system date? Which users have a local time equal to the system date? Which users have a local time zone that is different from the system date?
  2. Time Zone Function – Without enabling Time Zone functionality, the date that is defaulted when processing transactions is the system date. This default date may be in the incorrect posting period for a large number of users depending on the structure of your business. The default date with Time Zones enabled is the local date of the user entering the transaction (as defined by the user master record). Your period end procedures may differ depending on whether or not you have enabled Time Zones. If you do not have Time Zones enabled, you may wish to do so as a result of the period end analysis.
  3. Plant Location – If you have plants within a company code that are located in various time zones, your procedures for month end will have to take into account the different operating times of these plants in order to minimize potential down time of some locations around period end.
  4. MM Close Period – If you have plants within a company code located in distant time zones, the determination of when to close the MM period becomes more complex. For information on minimizing material blocking during the execution of the MM period close, see MM Scenario - Period Close.
  5. FI Close Period – The FI posting periods are determined by the Fiscal Year Variant associated with the company code. You can open/close posting periods based on a company code’s local time if you have a unique Fiscal Year Variant defined for each company code. Authorizations can be used to prevent unwanted postings into open periods other than the current period.
  6. Intercompany/Interplant Transactions – All intercompany transaction in R/3 update the participating company codes with the same posting date. The determination of the posting date is dependent on many factors including the type of transaction and whether or not you are utilizing Time Zone functionality. When working with company codes in distant time zones, intercompany postings may be something you wish to monitor. To report cross-company code documents posted during a specified range of dates, follow this menu path.
      1. From the General Ledger menu, choose Document ® Cross-CC transaction ® Display.
      2. Click on the List button transaction.
      3. Enter the appropriate range of posting dates and/or other criteria.
      4. Choose EXECUTE
  1. Transaction Cutoff – For work in an environment where each plant/location has its own system, processing can be cutoff for a period based on the local time of the location. When multiple locations in varying time zones are working using one system time, one cutoff time based on the system time may need to be enacted in order to minimize the risk of financial misstatement. The use of the Time Zone function allows users to work in their respective local times as opposed to working using the system time. The Time Zone function may negate the need for a centralized cutoff time at period end.

Result

When you work with multiple entities across distant time zones, the determination of when to open/close posting should be carefully analyzed. Many factors should be considered, including those stated above.