This post is the continuation of my previous post “What is the Data Migration process about ? (Data Migration 101)? where I was explaining the process of Data Migration.
In this post, I will talk about the SAP Finance Migration objects which is my key area of expertise. I will describe the specifics of each objects, its strategy, dependencies and how they fit together in this whole big puzzle.
I will describe them in order, sequence how they need to be created. Some could be created in parallel and some need to be created after others have been created.
The first pre-requiste to start doing Data Migration is that your whole configuration has been transported into Production or your Target environment that you are migrating too.
Extracted Data from the Legacy system should be done all at the last day of the closing period prior to the go-live date. If the go-live is March 1st, then data should be extracted as of the books being closed on February 28th (or 29th for a leap year).
The ideal time of the year for a go-live from a Finance perspective is the 1st day of the new Fiscal year as it simplifies several of these conversion objects, specially GL Balances and Fixed Assets with its values.
Bank Master (Bank Keys)
This is the whole list of Bank numbers, with its names and in some cases their addresses too. This is needed in SAP to be able to perform electronic payments (or Direct Debits too) and register Vendors / Customer Bank account details. SAP normalizes all these data in order to avoid issues while generating payments that could result in payments being rejected by Financial Institutions. If you have a small volume, this information could easily be validated online in many web pages and also in each Bank list of branches. If you have a large volume or anticipate it, there are companies that provide this Bank Directory for specific countries or worldwide ($$$). Ex. Accuity or SWIFT. Bank Keys is a pre-requisite to load Business Partner Vendor / Customer.
Bank Keys Master Data can be migrated using a standard SAP delivered object in the new S/4 HANA Data Migration Cockpit in case you did not purchase the services to obtain Bank Directory Data.
My personal preference: SWIFT Service
Chart of Accounts
This is the heart of the Finance Module in SAP. Without it almost nothing can happen. This contains every single General Ledger account. It can be loaded with the old LSMW, it can be Transported (see this post post that I did in the past) or it can be replicated from your Golden environment into other environments through ALE (this other post too). The chart of accounts is a MUST for all Finance transactional data that will come after, like Fixed Assets values, AR/AP Open Items, GL Balances, Standard Cost calculation and Inventory load.
For S/4 HANA 1909 version, SAP has finally delivered a Migration object for GL Account within the Data Migration cockpit. This is something much awaited since the 1st S/4 HANA version.
My personal preference: create everything in the Golden configuration environment with LSMW or Cockpit and then ALE to other environments.
Another Finance object that is key for SAP Finance. Depending the size of the company and operations they have, this could be a small number of Profit Centers Centers or a large number of records. Based on that if we are talking about a handful of records they can easily be created manually; but it is almost never the case. For a large volume of data, we could always use LSMW or the new S/4 HANA Data Migration Cockpit which it comes out of the box with a Migration Object ready to use. Also another alternative to keep all your environments in synch., you could use ALE to Distribute the Profit Center Master Data (see this post that I did in the past). Profit Centers are a pre-requisite for Cost Centers as Cost Centers need to be assigned to a Profit Center.
My personal preference: create everything in the Golden configuration environment with the Cockpit and the ALE.
Another Finance object that is key for SAP Finance. Depending on the size of the company and operations they have, this could be a small number of Cost Centers or a large number of records. Based on that if we are talking about a handful of records they can easily be created manually; but it is almost never the case. For a large volume of data, we could always use LSMW or the new S/4 HANA Data Migration Cockpit which it comes out of the box with a Migration Object ready to use. Also another alternative to keep all your environments in synch, you could use ALE to Distribute the Cost Centers Master Data (see this post that I did in the past).
My personal preference: create everything in the Golden with the Cockpit and then ALE
Fixed Assets (Master Data & Values)
This is where it all ends for Inventory. Your MM or WM Team will load their Inventory Quantities and based on the Material Master Cost assigned in prior steps for the different materials (S or V), the system will do Qty * Cost and post a Journal Entry for that Inventory Initial load process.
Initial Inventory load Movement Type 561 will trigger FI-MM Account Determination GBB-BSA.
When loading Inventory, the system will do the following Journal Entries:
Credit Inventory Balance Sheet Initial load / Conversion Account (Ex 399999) GBB-BSA
The total of your Inventory load resulting from the Quantity load should be equal to the Sum of all Inventory Balance Sheet accounts that you will load in your GL Balances. If not you have an issue and should reconcile it.
As a suggestion, I strongly recommend this approach before loading inventory quantities… Once you have Moving AVGs and Standards in your system, you should extract them and put them in Excel. Then before loading the Inventory Quantities, ask for that file and dump it in Excel. Do a quick Vlookup to populate all Materials with prices. Then do Qty * Cost and do the full sum. If it Balances to your GL, you should go buy yourself a lottery ticket. If it does not balance, which is most likely the situation, start a reconciliation process Material by Material. As said before, in many Companies some sort of dollar threshold is established prior to this exercise to accept differences. In some other cases, there are Management calls right after to discuss these differences and sign-off on them.
Now we reached the last of the SAP Finance Conversion objects, the most important one and the one that closes the whole loop and series of conversion accounts. After posting the GL Balances, all your 39999x Conversion accounts will go down to zero. If not, you have an issue derived from any of the previous conversion objects that you need to analyze and reconcile.
As previously described in each individual object, you cannot map your GL Balances for the different subledgers and/or modules (AR, AP, Inventory, Assets, Projects and Internal Orders) directly to the subledger accounts, instead you need to map those GLs to the 39999x Conversion accounts. Each subledger loaded have posted the offset to the conversion account. Then the GL Balance upload will come to offset those GL Conversion Accounts (39999x).
Remember, GL Balances needs to be done with a posting date as of Dec-31st (in case your go-live is Jan 1st).
Note: always pay attention to your Parallel Currencies amounts, not just your Local / Company Code currency amounts. This is normally a challenge because not many Legacy systems have Parallel Currencies capabilities like SAP.
My personal preference: Migration Cockpit object delivered by SAP.
Inventory load will happen right during the go-live weekend as Inventory quantities are crucial to be able to start Producing and Shipping in the new system after go-live.
AR/AP Open Items load, will most likely happen during the go-live weekend. These Open items are needed right after you start operating in the new system so you can pay your Vendors and apply cash received from Customers. There could be a minor delay of 1 or 2 days max, but more than that will have an impact on the business.
Project and Internal Order values will happen with the load of the GL Balances.
The load of your GL Balances (or the whole Trial Balance), cannot happen during the go-live weekend. No Accounting / Finance department closes their books in a weekend or during the go-live. So, information to load the balances will come no sooner than mid-month after the go-live date. Only once the books have been closed, all JEs posted, everything reconciled; then Finance will be able to produce a file ready to upload the whole Trial Balance. This needs to happen before you start your 1st Month End exercise in SAP, otherwise you will not be able to produce proper Financial Statements.
Note on LSMW
Before people start jumping at me … I want to clarify something on this.
SAP has released notes that LSMW is not the preferred Migration tool for S/4 HANA, that they will not support it anymore, it is at your own risk and you should use instead the new S/4 Migration Cockpit. All good with that. But …. Where I see an issue is in trying to use LSMW in Objects like BP where you cannot use recordings in those screens and some other screens (like ABLDT for Fixed Assets values) where you have tables and you cannot manage that properly with recordings.
But LSMW is not only about recordings. You can use BAPIs and IDOCs with it and still be 100% S/4 HANA compliant, as those BAPIs and IDOCs have (most likely) been updated to be used in S/4 HANA. So using them will not break anything and data will still be properly created. LSMW with BAPIs and IDOCs is still way more performant than the Migration Cockpit, way faster. I have lived that 1st hand. The only thing that you need is people like us (old SAP Consultants) that know how to use it for each an every single object.
If your Company and/or Project needs to implement this or any of the functionalities described in my Blog, do not hesitate to reach out to me and I will be happy to provide you my services.