The Next Generation Intercompany Solution: Intercompany Matching & Reconciliation” for the new ICMR capabilities in SAP S/4HANA Cloud 2008 and OP 2020, my favourite of which is the Reconciliation to Elimination, is continued in this blog. With the addition of this feature, ICMR can now support a continuous process that starts with daily matching and ends with the generation of intercompany elimination entries for Group Reporting.
Elimination
In order to create the group view, the intercompany AR and AP must be removed. However, in practise, the AR and AP from two companies might not balance out. Thus, elimination difference could be occurred. In the past, the difference could only be divided into currency translation difference and other difference. because the consolidation system is unaware of the “other difference”. Now that the other difference has been broken down, ICMR can do so with more precision.
Items from AP and AR are matched at the transaction level during matching. In the event that a mismatch is discovered, a corresponding reason code is assigned to indicate a potential cause. The reason code will be carried to consolidation if the disparity cannot be cleared up before consolidation. As a result, the reason code can be used to analyse the elimination difference. Additionally, one can dig down to the specific AR and AP products.
Posting policy
A new Fiori App called “Define Posting Rules” is distributed to instruct the system how to publish elimination submissions. Four item groups are used to categorise elimination entries. You can enter values for the accessible fields in each category. Values may be constants or may be converted using a variety of functions. For instance, the FS Item is returned from the original FS Item’s attribute “S-ELIMINATION-TARGET” using the function “DERIVE FROM TARGET ATTR(‘S-ELIMINATION-TARGET’)”.
Posting Elimination Rule
Please refer to the online help, which also includes examples, if you want to learn more about how the four item groupings function.
Posting rules can be used for adjustment posting in addition to elimination posting. Eliminating the difference in elimination during consolidation can be avoided by resolving the inconsistencies using automatic adjustment postings in Accounting. A different posting rule variation is shown below. Two item groupings are present, however there are additional control possibilities. With it, you may establish supple posting guidelines to eliminate variance.
Rule for Adjustment Posting
For variance adjustment in the previous release, posting document templates were employed. Now that posting rules are more strong and adaptable, we advise using them. To learn more, use the online assistance.
Process from End to End
Let’s now connect the existing functions. First, the daily transaction matching is performed by the local accountants using the ICMR Apps. On occasion, they look at the balance and state of the reconciliation to acquire an overall picture. Then, at the end of the term, they decide to close the reconciliation status and maybe gain the supervisor’s approval. They then provide the group accountants access to the reconciled data so they can execute currency conversion and elimination in the consolidation system. Finally, the group reporting includes the reconciliation information and links it to the original postings.
Process of Reconciliation to Elimination
The App’s Reconciliation Management As a new connecting element between elimination and reconciliation, close is introduced. In the app, leading unit and partner unit pairings are listed along with intercompany variances and a breakdown of discrepancies by reason code. The information is clear enough for the judgement of reconciliation close. Additionally, it can be utilised for auditing needs. After then, the data is sent to Group Reporting for deletion. With that, the month-end close, consolidation efforts, and day-to-day operations can all be streamlined.
Control reconciliation Finish
Online assistance has further details about Mange Reconciliation Close. To feel more intuitively guided, watch the video below.
Outlook
In SAP S4HANA, the intercompany accounting saga is still ongoing. From reconciliation to elimination, we have already completed some work. However, there is still more to be done in terms of recording and preparing intercompany data. The intercompany procedure will be more efficient because to the planned capabilities in Parallel Accounting (such Group Valuation).
Related Resources
The list keeps on update.
- The main source of information:
- https://help.sap.com/s4 ce icmr SAP S/4HANA Cloud
- https://help.sap.com/s4 op icmr SAP S/4HANA
- Video introduction
- YouTube, ICMR
- SAP Media and YouTube are eliminated in Recon 2.
- FAQ: OP with SAP Note for Cloud(2815332) (2815304).
- Launchpad.Support.SAP.COM/#/notes/2916087 Configuration Guide
- Intercompany Matching & Reconciliation: The New Intercompany Solution