Introduction

Some of ABC’s current legacy applications will be replaced by SAP as part of the ABC SAP Implementation Project. This cutover approach paper outlines the transfer of current ABC business operations, systems, and data to SAP. Along with the interim process, procedures, and governance measures that must be in place by XXXXX (cutover date) in order to ensure a seamless transition, it also focuses on the technical and system processes necessary to have the SAP production system operating.

Purpose

The purpose of this document is to list and discuss each task involved in the project cutover. It also describes the goals, boundaries, strategy, roles, and resources related to cutover activities. This document will be utilised as a crucial tool for communicating cutover actions to project teams.

The terms used to describe the phases of implementation will be as follows to guarantee consistency in communication:

The time just before go-live is known as cutover. It consists of the series of tasks necessary to set up the SAP production system and move processes and data from the legacy environment to SAP production.

Go-live is the moment when end users may access the production system.

Following go-live, the project will be primarily in charge of organising and managing support operations during the post-implementation support phase. Following this initial phase, ABC’s IT support unit will assume major responsibility.

The project phase known as “handover” is when ABC will assume responsibility and receive the project deliverables.

Goals of the Cutover

The main goal of the cutover activity is to switch ABC operations from using older applications and business systems to SAP-based business operations.

Following these general guidelines will help with cutover:

  • Limit the amount of time users are without the Legacy system.
  • Make sure that no parallel data processing takes place after the cutover period.
  • Use methods that have been consistently proven effective.
  • Reduce the impact of the cutover procedure on ABC’s business activities.
  • Throughout the implementation phase, make sure that communication and escalation processes are suitable and timely. This includes a defined procedure for the escalation of issues and timely decision-making during this challenging time.
  • Reduce the possibility that an unanticipated, unplanned, or unmanaged circumstance will arise during the implementation process.
  • Make sure ABC’s stakeholders are appropriately involved and supportive to make it easier to resolve problems, accept risks, and be available for decision-making during the implementation phase.

The precise cutover goals are:

  • To set up the production environments for SAP Enterprise Resource Planning (ERP) for cutover and go live.
  • Business Area or profit centre information Test of balance
  • To transfer all system settings from the testing environment to the production environment.
  • To guarantee the scheduling of SAP batch jobs.
  • To convert every bit of info (albeit on different dates).
  • To guarantee that the right business users and project resources verify and approve the translated data.
  • To retire obsolete, redundant systems.

Cutover responsibilities and roles

Owners of Data

  • Process owners and core group Before the final load files are loaded into SAP, give your approval.
  • Make sure that the project plan’s scheduled data extraction and transformation operations are carried out.
  • Affirm and sign off on all data objects.
  • continuously assess any effects on SAP data from local changes in the enterprise.
  • During the transition time, aid in the facilitation of dual data maintenance tasks in both the legacy and SAP applications.

Validation of Data

  • Creates adequate plans for validation and reconciliation to guarantee that data quality criteria are met within the SAP system.
  • Ensures that the proper cutover procedures are created to satisfy specific requirements by collaborating with the cutover manager.
  • Carries out validation and reconciliation tasks in advance of and after data loading into the system.
  • Continuous data monitoring throughout the migration duration to guarantee optimal data quality
  • Makes sure the data owner and cutover manager are aware of any problems that come up during the validation of the data and helps with the necessary resolution
  • Reports the status and results of the validation and reconciliation tests to the cutover manager.
  • Functional leads will offer uploaded data with SAP code (internally generated) for validation or reference upon master data upload.

Data Transfer

  • Functional Lead prepares data load into SAP by receiving, cleaning, validating, and checking the data.
  • Resolves discrepancies between the defined data and the data’s source
  • Helps to solve data translation and load problems
  • With a SAP Business User ID, all production master and cutover data will be uploaded. Functional leaders won’t be able to visit the production server on their own.

Cutover Techniques

 

Financial Accounting Balances and Open Items

The transition process for Finance will generally fall into the following categories:

  • Open Item Accounts for Vendors
  • A customer account open item
  • Prices for fixed assets
  • Accounts in the general ledger
  • Accounts on a balance sheet
  • Accounts of Profit and Loss

As of XXXXXX, all balances will be transferred (cutover date). Business division or profit centre Business must supply a trial balance. To make reconciliation and error handling easier, the initial values and transactions for each of these categories will be controlled using distinct Initial Data Takeover Accounts.

 

  Account Number  Description  Remarks
   X00000

  X00001

  X00002

 

  (Open balance upload

  – Stock)

  Stock Upload Offset –          Raw Material

  Spare Materials                    Consumables

  Semi-finished Goods            Finished Goods etc.

  Will be assigned to                Movement Type 561/562    used for Initial Inventory    Upload.
  X00004

 

  (Open balance upload

  – Vendor)

  Vendor Open Items              Offset Account  Vendor reconciliation          Accounts will be                    automatically updated,        and contra effects will be    posted to this offset              account
  X00005

  (Open balance upload

  – Customer)

  Customer Open Items          Offset Account  Customer reconciliation      Accounts will be                    automatically updated,        and contra effects will be    posted to this offset              account
  X00006

  (Open balance upload

  – GL)

  Other GL Account                Balances Offset Account  Individual GL Accounts      will post and contra              effects will be posted to        this offset account
  X00003

  (Open balance upload

  – Asset)

  Asset open item account  Asset reconciliation              Accounts will be                    automatically updated,        and contra effects will be    posted to this offset              account

 

The following factors will be taken into account as we prepare:

  • It will be necessary to develop a mapping between the SAP Chart of Account and the legacy Chart of Account to:
  • Legacy Accounts that have been individually mapped to SAP COA
  • When a single SAP COA account has been mapped to more than one legacy account.
  • There will need to be a consolidation of the balances in these accounts.
  • Legacy Accounts that have been divided up and, in some cases, SAP COA-mapped to several accounts. These accounts’ balances will need to be divided on this basis.
  • The legacy data that must be transferred to SAP for future comparison and reference relates to balances or initial transactions (in the case of open items).
  • Each balance or open item must be given the proper publishing keys. It is necessary to assign the proper special GL Indicator when dealing with special GL transactions.

 

  40  Debit to GL Account
  50  Credit to GL Account
  01  Customer debit
  11  Customer credit
  09  Debit customer (special      GL)
  19  Credit customer (special      GL)
  31  Vendor credit
  21  Vendor debit
  29  Vendor debit (special GL)
  39  Vendor credit (special          GL)
  70  Asset debit
  75  Asset credit

 

  • All balances and open items will be posted as separate FI documents with an offset line-item entry in the appropriate offset account’s associated debit or credit. The sum of all offset accounts must equal zero (zero) after all financial balances have been uploaded. These accounts will then be netted out with one another and turned off for use in future postings.
  • Prior to data upload, all master data, such as vendor codes and GL Account Codes included in the line items for upload, must be uploaded in SAP. In order to do an existence check as part of the data cleaning and preparation process, a procedure will be built.
  • The system setup must include all master records or other value lists where data is checked against SAP system values (such as Company Code, Plant, Business Area, etc.). All input data must also be clean.

Data in the upload format must include SAP codes.

Open Item Accounts for Vendors

For each plant/business area, vendor balances will be uploaded at the level of open invoices.

  • All initial uploads will be of Document Type XX.
  • After all necessary updates to vendor accounts have been made, open line items would be entered into the system. Prior to uploading the open items, all adjustments pertaining to vendor debit notes, credit notes, and advances should be completed in legacy.
  • Transferring all vendor open items to SAP at the line-item level, whether they date back to the previous fiscal year or earlier
  • Before the cutover data is created, open items resulting from rounding off disparities in the previous system must be cleared.
  • The vendor reconciliation account offset will be handled by a different GL Account.
  • Advances and deposits are examples of unique GL transactions that must be submitted with the proper special GL indications and posting keys.
  • Due to the possibility of several open items maturing at different rates as they approach the payment due date, payment arrangements will need to be carefully considered.
  • The current payment terms have to be accessible in SAP as well.
  • The baseline date will be used to calculate the due date, thus it is important to state it carefully so that the exact due date can be calculated from the payment terms.
  • The exact due date should be provided by legacy data, the field “Baseline Date” should record actual due dates, and the payment terms for all open items should be “Immediately Due, Net.” This will guarantee that all payments are processed by the due dates.
  • There will be no tax deduction for outstanding SAP items. Before taking over a transaction in SAP, all tax deductions should be finished, and the tax deduction line item should be taken over as a regular debit line item. The Withholding Tax will be deactivated at the appropriate company code level while uploading the vendor balances. The withholding tax will be triggered for regular operation once the vendor balances have been uploaded to SAP and validated.
  • Whenever possible, capital and revenue liabilities and advances will be distinguished using the necessary Special GL Indicators that have previously been set up in the system.
  • In order to assist the reconciliation and completion of vendor accounts and open items, it could be required to clear all outstanding payments up to a deadline and halt payment activities. This will ensure that vendor payments resume as soon as possible following go-live.
  • Vendor payments may be put on hold starting at.
  • During this time, procedures may be established to approve and oversee emergency payments as well as the payment of government obligations, as well as to guarantee that these transactions are properly recorded and carried over into SAP.
  • TDS payment entries must be made in SAP and Legacy systems, respectively. The generation of TDS certificates and challans will require the entry in legacy. To invalidate the provisional entry for TDS obligation uploaded at the time of cutover, SAP entries will be necessary.
  • Before data is uploaded into SAP, vendor master data must first be developed.
  • The following details must be provided for vendor upload:
  • Document Date: The date that the initial invoice for the Vendors was posted.
  • Payment method: Document payment
  • Exchange rate at which the original document was posted
  • Refer to: Billing number
  • Posting Key: See above Section 1
  • Accounting code for SAP
  • A special G/L Indicator for deposits and advances
  • Amount: Amount in the currency of the paper.
  • Quantity in LC: Quantity in INR
  • Baseline Date: The payment deadline
  • Business Area: The line item’s business area
  • Assignment: Legacy system PO number, if available
  • Text: Storytelling
  • The vendor’s open item total and the vendor reconciliation account’s balance in the trial balance should match.

Format

Format for LTMC

Open Item Accounts for Customers

Customer balances will be posted for each Profit centre or business sector at the level of open invoices.

  • All initial uploads will be of Document Type XX.
  • After making any necessary revisions to customer accounts, open line items would be entered into the system. Prior to uploading the open items, all adjustments pertaining to Customer debit notes, credit notes, and advances should be made in legacy.
  • Transferring all customer open items to SAP at the line-item level, whether they date back to the previous financial year or earlier
  • Before the cutover data is created, open items resulting from rounding off disparities in the previous system must be cleared.
  • Customer reconciliation account offset will be done using a different GL Account.
  • Advances and deposits are examples of unique GL transactions that must be submitted with the proper special GL indications and posting keys.
  • Due to the possibility of several open items maturing at different rates as they approach the payment due date, payment arrangements will need to be carefully considered.
  • The current payment terms have to be accessible in SAP as well.
  • To enable the reconciliation and completion of customer Accounts and Open Items and to guarantee that customer Payments resume as soon as possible after go-live, it could be required to clear all due payments up to a cut-off date and halt payment activities.
  • Before data is uploaded into SAP, Customer Master Data must first be developed.
  • The customer’s open item total and the balance of their reconciliation account in the trial balance should line up.

Format

Format for LTMC

 

Values of Fixed Assets

  • The data migration application for asset master upload and initial values upload will be used to upload Fixed Asset values for Gross Block and Accumulated Depreciation as of XXXXXX> at the main asset master records level.
  • The GL Account Balances for Assets and Accumulated Depreciation will be compared to a report on Asset Balances for the initial transfer amounts.
  • The associated GL balances from the legacy accounts will be uploaded into the corresponding asset GL accounts in SAP when reconciliation and agreement between the uploaded values and GL Accounts in legacy have been confirmed.
  • There won’t be any previous periods or years’ depreciation recalculations in SAP, and the configuration settings will be adjusted to assign the proper transfer date and period up to which depreciation is posted.

The following details are necessary for inventory upload: xxxxxxxx

  • Asset Type
  • Capital Block
  • Asset details
  • Main asset number text
  • Serial number of the item
  • Quantity
  • Measurement Unit
  • Vendor
  • Date of asset capitalization
  • Business Sector
  • Plant
  • Location
  • Price Center
  • Book Depreciation Area Values
  • Key to Depreciation
  • Life of Asset in Use
  • Cost of acquisition
  • Revaluation (if any) (if any)
  • As of XXXXXXXX, AccDep
  • Revaluation amount as of XXXXXXX
  • XX to XXXXXX departure
  • Dep on Rev between XXXXX and XXXXX
  • Depreciation Area Values under the Companies Act
  • Key to Depreciation
  • Life of Asset in Use
  • Cost of acquisition
  • Revaluation (if any) (if any)
  • The trial balance’s GL Account balances and the sum of the account determination balance should match.

Accounts in the general ledger

Accounts on a balance sheet

 

Managed non-open item accounts

  • Most balance sheet accounts won’t be handled on an open item basis. These balances must be uploaded as of XXXXXXXX, properly segmented per profit centre assignment.
  • Prior to data being uploaded into SAP, GL Master Data must be generated.
  • The following details are necessary for GL upload:
    Payment method: Document payment
  • Exchange rate at which the original document was posted
  • Posting Key: See above Section 1
  • Account: GL code for SAP
  • Amount: Amount in the currency of the paper.
  • Quantity in LC: Quantity
  • Business Area: The line item’s business area

Item controlled accounts available

  • Some GL Accounts will be kept as open item controlled accounts, including TDS Payable, other statutory liability accounts, clearing accounts, provision accounts, and bank accounts (cheque issuing and check deposit) to be utilised for bank reconciliation statements in SAP.
  • The accounts listed above for which open item management is requested, as well as any additional accounts, if any, must all be specified.
  • It is suggested that an effort be made to settle all such liabilities prior to the deadline in order to bring the balance in these accounts to “NIL.”
  • Balance If necessary, open items in these accounts must be moved at the line-item level to SAP.
  • When dealing with banks that are subject to reconciliation, the entire book balance will initially be moved to the primary bank account. Non-reconciled items must be moved to the appropriate bank sub-accounts (incoming/outgoing payment) with initial upload documentation after the bank reconciliation for XXXXXXX is finished. The difference in the main bank account will then be transferred to the G/L Account upload offset account. This will make the reconciliation process easier starting from XXXXXX. When entries are discovered in the Bank Statement for certain items, SAP’s automated and/or post-process functionality must be used to handle them. To make bank reconciliation easier, line-item data will be uploaded in the subaccounts while total balances will be submitted in the main bank accounts.
  • Prior to data being uploaded into SAP, GL Master Data must be generated.
  • The following details are necessary for GL upload:
    Document Date: The date the customer’s initial invoice or order was posted.
  • Payment method: Document payment
  • Rate of exchange: The rate at which the original document was posted.
  • Posting Key: See above Section 1
  • Account: GL code for SAP
  • Amount: Amount in the currency of the paper.
  • Quantity in LC: Quantity
  • Business Area: The line item’s business area
  • Assignment: Legacy system order number
  • Text: Storytelling

Items in the profit and loss account

  • The balance in the profit and loss account would need to be uploaded, and profit and loss accounts would need to be prepared as of XXXXXXX. The line items of expenses from XXXXXXX +1 would be displayed in the SAP system’s expense and revenue ledger.
  • At each Cost Center, profit and loss account balances would be necessary, as well as an Internal Order (in the event that a GL Account has an Analysis key).

The following details are necessary for GL upload:

Payment method: Document payment

Rate of exchange: The rate at which the original document was posted.

Posting Key: See above Section 1

Account: GL code for SAP

Amount: Amount in the currency of the paper.

Quantity in LC: Quantity in INR

Business Area: The line item’s business area

Cost Center: The line item’s cost centre.

Internal Structure: Creation of IO for Analysis Key

Format

Format for LTMC

Manual tasks must be carried out.

  • Create the necessary master date.
  • Keep the numbers within a certain range.

Required Checklist

  • Plan and verify the necessary tasks.
  • Validate the Order of Transport Requests
  • Verify the customization of the organisational structure (Controlling Area, Credit Control Area, Company Codes, Chart of Accounts, Cost centers, Profit centers, Plants, Storage Location)
  • Ensure that the appropriate settings are in place for the House Banks & Bank Accounts.
  • Creation of Number Ranges for Bank, Business Partner, Customer, Vendor, Material (Sequence Numbers, Requests)
  • Make Document Types Valid
  • For GL, AA, CO, and MM posting periods, verify and maintain them.
  • Validate the pricing and tax configuration processes.
  • There must be a Master Data checklist completed:
  • Verifying pre- and post-data load

Verification of the master data load includes the following: Controlling Area, Company Codes, Chart of Accounts, Fixed Assets, Business Partner, Material, Cost Centers, Profit Centers, Banks, House Banks, and Bank Accounts.

  • Planning and carrying out the Initial Upload are required:
  • Permissions to upload files to and download them from the server
  • Check user system profiles before initiating uploads (date format, decimal, point)
  • Post any pertinent past exchange rates (including those for initial uploads)
  • Upload of initial balances and consistency check
  • Upload of open objects after verification: Particular focus on asset accounting Accounts Payable, Accounts Receivable, Banks, and Fixed Asset Values (Useful Life, Depreciation)

Post-launch activities

Following the successful upload of all cutover data into the production client, the tasks listed below must be completed.

  • For G/L accounts where entries are coming from other modules (for example, a change in stock G/L), “Post Automatically Indicator” is assigned.
  • To alter the Vendor Master’s number range settings from External to Internal (if required so).

Risk

  • Data flow quality from legacy to SAP
  • Inadequate business involvement in transitional activities
  • Extended blackout period compared to the original
  • Operations after going online will be hampered by inaccurate financial balances as of the cutoff date.
  • Misalignment of materially-related GL balances

 

The general FI cutover actions listed above may be useful for understanding and wrapping up your cutover plan.

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