CONCEPT OF THE NEW GENERAL

LEDGER IN SAP

FIGURE 1 (NEW GENERAL LEDGER ACCOUNTING IN IMPLEMENTATION GUIDE)

The classic general Ledger contains all the financial transactions of a

business. Besides using the classic general Ledger, businesses make use
of the Special Ledger and other components like Profit Center Accounting
(PCA) in order to meet statutory as well as internal requirements. SAP
Profit Center Accounting and the special Ledger reside in separate
applications. Therefore, these modules were not automatically reconciled
with the classic general Ledger. Due to this there was a need to perform
additional closing activities in order to reconcile these additional modules
with the classic general Ledger.

The new general Ledger uses the same familiar interface as the classic
general Ledger but overcomes the difficulty encountered while carrying out
the closing activities in the classic general Ledger.

ADVANTAGES OF USING THE NEW SAP

GENERAL LEDGER
• The new general Ledger covers all the functions that were previously implemented by the
use of separate ledgers like the Costs of Sales Ledger, Special Purpose Ledger, the
Reconciliation Ledger or the Profit Centre Ledger. Therefore, businesses need not maintain
the separate ledgers in separate applications. This makes the recording at Administration of
transactional data easier.
• The user interface of the New General Ledger is similar to that of the Classic General
Ledger. Therefore users already familiar with the Classic General Ledger require very little
training in order to migrate to using the new general Ledger.
• The New General Ledger eliminates data redundancy by storing all the transactional data in
a single totals table. This improves the efficiency of the database.
• With the New General Ledger, there is no need to use separate ledgers like the Special
Purpose Ledger, Profit Center Ledger, etc. It eliminates the need of Profit & Loss and
Balance Sheet adjustments with online splitting functionality. Due to this there is no need to
 carry out additional reconciliation activities with other applications during closing. This helps
in saving a lot of time and effort on the part of the end user.
• The use of the new General Ledger makes it easier to include additional fields in order to
provide flexible reporting as per the requirements of a business.
• Reconciliation ledgers postings are eliminated by the use of the New General Ledger. In
case of cross company code postings, the information was initially stored in controlling and
then transfer to the FI module at period close. The controlling data was stored in the
Reconciliation Ledger. At the period end, this data was transferred from controlling to create
FI documents so that are reconciliation between controlling and FI was carried out. The
New General Ledger provides real-time reconciliation between the controlling and FI
modules.
• The Total Cost of Operations for a business is reduced due to the advantages provided by
the New General Ledger.

CHARACTERISTICS OF THE NEW GENERAL

LEDGER
The Classic General Ledger was primarily intended to provide a
comprehensive mechanism for external reporting purposes by recording all
the transactions of a business. However, for internal reporting purposes
data needs to flow to the various controlling modules like Profit Centre
Accounting, Cost Element Accounting, etc. The linkage between the
Classic General Ledger and the controlling module was weak. Due to this
there was automatic reconciliation between the Classic General Ledger
and the various controlling applications. The New General Ledger provides
the following features:

FIGURE 2 (DOCUMENT SPLITTING IN NEW GENERAL LEDGER)

• PARALLEL ACCOUNTING: The New General Ledger allows several parallel ledgers to be
maintained in order to record transactions and provide reports to meet different accounting
requirements. This eliminates the need to use the Special Ledger application separately in
order to fulfill these requirements.
• INTEGRATED STATUTORY AND MANAGEMENT REPORTING: The New General
Ledger enables a business to perform internal management reporting along with supporting
the traditional purpose of legal reporting. It allows financial statements to be generated for
any dimensional in a business. Therefore, the New General Ledger may be used to produce
 the balance sheet which is required for external reporting purposes or the Profit Centre
analysis report which is required for internal reporting purposes.
• SEGMENT REPORTING: The New General Ledger allows reports to be prepared on the
basis of segments based on the International Financial Reporting standards (IFRS) and
Generally Accepted Accounting Principles (GAAP)
• COST OF SALES ACCOUNTING: The New General Ledger allows the costs of sales
accounting to be implemented.
• DOCUMENT SPLITTING: Document splitting helps to create balance sheets for entities
that extend beyond the scope of the company code.
• NEW TABLES: the new general Ledger makes use of the tables FAGLFLEXT (totals),
FAGLFLEXP (plan line items), FAGLFLEXA (actual line items) and FAGL_SPLINFO
(splitting data).

LEDGER CONCEPT IN THE NEW G/L

The New General Ledger uses the Special Purpose Ledger to save total
values in the tables. All company codes are assigned to a leading Ledger.
For each client, additional ledgers for each company code can be added.
These additional ledgers can be used for different purposes such as
parallel accounting or management reporting. With the New General
Ledger it is now possible to perform postings that previously required
several components. This is also true with regards to the transfer postings
between profit centers that were previously stored and the Special Ledger.

The new general Ledger makes use of additional tables and fields as
compared to the classic general Ledger once the new Gen functionality is
activated, the previous financial accounting menu is replaced by the
financial accounting (new) and the general Ledger (new) menu. It is
required to activate the new general Ledger accounting so that the
transactional data is written to the new tables rather than the classic
general Ledger tables.

FIGURE 3 (ACTIVATE NEW GENERAL LEDGER ACCOUNTING)

ACTIVATING THE NEW GENERAL LEDGER IN

THE SYSTEM
For all the new installations, the New General Ledger is activated by
default. SAP recommends the use of the New General Ledger functionality
because of the many advantages it has to offer. However, for existing
customers it is optional. Existing customers can continue to use the Classic
General Ledger or they can migrate to the New General Ledger. The New
General Ledger is activated automatically during an upgrade.