Universal Journal
The universal journal is the book of original entry for business transactions in Financial Accounting (FI) and Controlling (CO). It contains the journal entries generated by these transactions and thus represents the single source of truth in SAP Simple Finance. Integrity of financial data is guaranteed by design, eliminating reconciliation effort between FI and CO and ensuring that everyone can always access the most current data.
Line items are written only once, keeping the memory footprint at a minimum and optimizing system throughput rates. Totals are calculated on-the-fly when needed, further reducing the memory footprint while ensuring high performance for analytics and period closing processes.
Features
Permanently Reconciled Financials
The universal journal is the basis of an integrated accounting system in which financial accounting and management accounting data are recorded in a single chart of accounts. Since all financial data is based on the same line items, no reconciliation between financial accounting and management accounting is ever required.
Permanent reconciliation is achieved by bringing together the following components:
General Ledger Accounting
(FI-GL)Asset Accounting
(FI-AA)Controlling
(CO)Profitability Analysis
(CO-PA)The universal journal is integrated only with account-based profitability analysis. It is not integrated with costing-based profitability analysis. However, costing-based profitability analysis can be run in parallel.
Material Ledger
(CO-PC-ACT)
All business transactions, both external and internal, are recorded on G/L accounts. Drilldown to the same line items from key figures and reports of both FI and CO is possible without the need for mapping rules.
The chart of accounts contains all balance sheet accounts and income statement accounts, including accounts for secondary costs. The ledger entity provides multi-GAAP reporting capabilities, enabling reporting based on different accounting principles in parallel, such as US GAAP and IFRS.
The complete set of Controlling entities (such as cost center, project, and internal order) that comprise the coding block are integrated into each journal entry. Secondary cost elements are a special type of G/L account rather than a separate entity in CO.
Since the different application components often use the same dimensions (such as profit center, cost center, or fund), these dimensions do not need to be stored redundantly in each component but are integrated in the journal entry. This provides many benefits, for example:
G/L accountants can drill down from a fixed asset account in the balance sheet to the individual fixed assets (balances) assigned to that account.
Cost center managers can easily determine which fixed assets are incurring depreciation costs for their cost centers.
The universal journal enables the preparation of balance sheets for multiple dimensions by means of document splitting. Document splitting ensures balanced journal entries for entities other than the complete company. For instance, you can prepare a full balance sheet for each segment.
Enhanced Reporting
The universal journal optimizes the reporting and financial analysis process since no time-consuming reconciliation activities are necessary. The enhanced reporting features include:
Flexible analysis of financial statements
You can drill down from any balance sheet item to entities such as fixed assets or materials.
Income statements can be broken down based on any dimension available in the journal entry. Market segment analysis is possible for any item of the income statement. The income statement is fully reconciled with profitability reports.
If any data is not entered when a transaction is recorded in the journal, the data is derived automatically. This enables you to analyze data using characteristics from different components. For example, you can create a balance sheet at the segment level.
Real-time profitability analysis
Market segments are included in journal entries as additional attributes, allowing you to continually analyze profitability rather than having to wait for settlement runs at period close.
For example, when salary costs are posted to a cost center, the corresponding market segment can be derived instantaneously and is immediately available for analysis.
Profitability attributes are provided for each income statement item, ensuring that the profitability data is always reconciled with the income statement. Market segment fields are filled through derivation of profitability attributes (for example, a posting to a cost center derives the product group). Attributes can be enriched by further processes such as settlement or allocations.
Comparability of costs
Costs in the income statement can be compared directly with the costs in a CO report since both are based on the same underlying data. There is no need to map G/L accounts to cost elements or ensure that the ledger in G/L is adapted to the CO version.
Easier to meet financial reporting requirements
The integration of financial and management reporting enhances your ability to meet financial regulations, such as the requirement to include operating segments in statutory reports.
Merge of OLTP and OLAP
Replication of data to an OLAP system is not necessary in most cases, since SAP HANA provides multidimensional access to line items almost instantaneously. Even in cases where data is needed in an OLAP system, the data only has to be extracted from one data source rather than different data sources in each component.
Extensibility
The integration of the coding block extension (structure CI_COBL
) allows input of customer fields on many user interfaces. The CO-PA extension technology is used as well in order to bring customer-defined market segment information into the new structure.