Public

How to perform end-to-end inter-company elimination based on

reconciliation

S/4 HANA Cloud 2008+

S/4 HANA on Premise 2020+ (planned)

6. August 2020

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TABLE OF CONTENTS
PROCESS STEP 0 - CONFIGURATION...................................................................................................... 5
PROCESS STEP 1 - POST INTER-COMPANY TRANSACTIONS............................................................. 18
PROCESS STEP 2 - PREVIEW IC TRANSACTIONS BEFORE RECONCILIATION.................................. 21
PROCESS STEP 3 - RECONCILE IC TRANSACTIONS............................................................................ 23
PROCESS STEP 4 - SIGN OFF RECONCILIATION.................................................................................. 26
PROCESS STEP 5 - PROVIDE TRIAL BALANCE FOR MONTH-END GROUP CLOSE ........................... 27
PROCESS STEP 6 - VALIDATION ............................................................................................................ 29
PROCESS STEP 7 - CURRENCY TRANSLATION ................................................................................... 31
PROCESS STEP 8 - RUN IC ELIMINATION ............................................................................................. 32
PROCESS STEP 9 - ANALYZE CONSOLIDATED IC REPORTS.............................................................. 33

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Tutorial Title End-to-end inter-company elimination based on reconciliation

Tutorial https://education.hana.ondemand.com/education/wa/s4/index.html?library=library.txt&show=book!BO_33F060AE8D3C72A3
Video (acquire license for SAP “Stay Current” for access)
Application FIN-CS-ICR, FIN-CS-GR in S/4 HANA Cloud 2008+ & on Premise 2020+
Component
Tutorial This tutorial / how-to guides users on ways to configure and execute an end-to-end process of running inter-company elimination in S/4 Group Reporting
Synopsis triggered by the inter-company reconciliation in S/4 IC Matching & Reconciliation. It entails a series of process steps on configuration, posting inter–
company (IC) transactions, reconciling IC transactions, month-end consolidation, and reporting analysis.

Benefits Streamlining IC reconciliation with elimination for early detection, analysis, and follow-up on IC transactions during the month-end close.
Pre- Master data:
requisites
Trading partners; breakdown of IC FS items by trading partners and transactional currency (for transaction level reconciliation and difference
split); consolidation document types that allows for posting to transactional currency.

Customizing:

Data source, matching method, reconciliation case, elimination method, posting rule, elimination task, task group.

Roles for business users:

SAP_BR_BPC_EXPERT
SAP_BR_CONSLDTN_SPECIALIST
SAP_BR_GL_ACCOUNTANT
SAP_BR_RECON_ACCOUNTANT
Note • This guide is published shortly after release of S/4 HANA 2008. Expect differences on the data and system behavior over time due to continuous
enhancement.
• The configuration described in this guide serves as examples only and will need to be adapted to the implementation projects case by case.
• The configuration described in this guide is based on SSCUI of S/4 HANA Cloud 2008. On-premise customers can access IMG in S/4 HANA OP for
corresponding transactions.
• Refer to help.com (cloud) and / or help.com (OP planned) for supplement information.

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 Process Step 0 - Configuration

Step description: How to set up typical IC Eliminations in SSCUI / IMG based on IC Reconciliations released in S/4HANA 2008.

Relevant Setting, I – Configuration for running ICMR for both S/4 accounting and non-S/4 accounting data
Step Description Object/Content
1 Ø Go to SSCUI or IMG path for S/4 Group Reporting

Ø You’ll see a list of delivered data souces used in ICMR.

Some are based on S/4 Accounting (table ACDOCA) while
some are based on a combination of both S/4 Accounting
and Group Reporting tables (ACDOCA + ACDOCU).

6. August 2020

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Ø Use or adapt delivered data source
“SC_JOURNAL_ENTRIES_01” when applicable. This data
source is delivered with built-in logic for running IC
reconciliation based on data from tables ACDOCA and
ACDOCU and also retrieving reconciliation to IC
Elimination. It has the following properties:

Main CDS View is “ICA_CONSJOURNALENTRIES_2”

Leading Unit Field is “Consolidation Unit”
Partner Unit Field is “Partner Unit”
Unit Entry CDS View is “ICA_CONSUNIT”

Ø Mandatory Filter Fields:

Once being assigned here these fields are available as
header filters for key ICMR transactions:

o Fiscal year, period

o Consolidation chart of accounts
o Consolidation version

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Ø Convertion profiles:

ICMR uses conversion profile to translate e.g. transactional / local currency

amount to group currency amount. This currency conversion applies during
simulation in IC Reconciliation overview ( Process 2 below) and also during IC
Eliminaiton (Process 8 below).

SAP delivers a few conversion profiles such as “C2” based on closing ex. rate .
You can create your own converions profile on top.
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2 Ø Let’s create a matching method based on the data source
“SC_JOURNAL_ENTRIES_01” .

Define Matching Method

Ø Display matching method “DEMO1” :

Data Source is “SC_JOURNAL_ENTRIES_01”

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 Important:

Filter data selection by specific consolidation document type (s) used for
reconciliation purpose. For demonstration purpose we use the following
document types for flat file load which could differ case by case in real life.

- “0B” to select non S/4 data loaded from the flat file to ACDOCU for
reconciliation
- “0F” to select S/4 accounting data from ACDOCA for reconciliation
before data release.
- “12” to select non S/4 data posted / loaded via group JE to ACDOCU
for reconciliation

In addition if you pull data into ACDOCU for reconcliation purpose with other
options such as GRDC or API you’ll have to adapt the document types in the
matching method here accordingly.

In addition to the document type, posting level and currency translation indicator
are also used to filter the right transactions for reconciliation purpose when’s
needed.

Ø Define Matching Rules

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Matching rule 1020 applies to IC transactions posted to the same invoice
number (in field “Assignment”), the same transactional currency key, and
amount in the respective aggregated AR and AP FS items. These FS items are
assigned to the elimination attributes “S-IUE-BS-AR” and “S-IUE-BS-AP” in the
FS item master data.

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 Matching rule 1030 applies to IC transactions posted to the same invoice
number (in field “Assignment”) and the same transactional currency key while
the TC amount might differ in less than 100 in the respective aggregated AR
and AP FS items. These FS items are assigned to the eliminaiton attributes “S-
IUE-BS-AR” and “S-IUE-BS-AP” in the FS item master data.

3 Ø Open app. “Define Reconciliation Case” :

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Ø Create your own reconciliation case and assign the
matching method created in process step “Configuration”
above.

Matching method “DEMO1” is assigned to reconciliation method “DEMO1” in

this case.

Ø Display Groups

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Display group serves the following purpose:

Threshold defined in tab “Tolerance” and filters defined in tab “Sides”

are used to display IC transactions in reports IC reconciliation
Overview and Balance.

Amount fields starting with “Z” are configured for translating transactional
currency amount or local currency amount of IC transactions to the group
currency (GC). It serves the following use case:

- Translating and simulating GC amount during matching and

reconciliation ( on the fly, no storage of result in the system)
- Calculating transactional differences during IC elimination as an input
for splitting elimination differences

In this case we assign “conversion profile “C2” defined in the data source
SC_JOURNAL_ENTRIES_01 in defining the amount field here.

The intersection of the definition in tab “Side” of the display group

along with the header selection of the matching method determines
the data set used to calculate IC difference upon IC elimination.
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 Relevant Settings II – Configuration for elimination postings

Step Description Object/Content

1. Ø Assign one currency conversion metrics to the
reconciliation case in SSCUI / IMG.

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 The properties defined earlier in the chosen metrics as part of the
reconciliation case will prompt the system to calculate transactional
differences upon IC elimination. In this case it multiplies closing rate to
the TC amount of IC transactions.

2 Ø Define IC elimination methods driven by IC reconciliaiton

o In S/4 HANA 2008 cloud release, users cannot

create their own elmination methods and can use
only SAP delivered elimination method “SC001”,
which is assigned to consolidation task 2042 and
then task group S24 valid as of fiscal year 2019 for
concolidation version “Y10”. They can assign their
own reconciliation case ( “DEMO1” in this case) to
the delivered eliminatin method “SC001”.
o S/4 On Premise customers can create their own
elimination methods.
o Check out help.com (cloud) and / or help.com (OP
planned) for details.

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3. Ø Define posting rule

Assign FS item values, attributes, etc. to each item group. This

definition coupled with built-in split logic determins posting of IC
differences accordingly.

- (A) Totals ifference: IC difference in GC based on LC

amount * standard currency translation (closing rate in
this case). It’s not shown here but calculated in the
background upon IC elimination.

- (B) Transaction difference: IC difference in GC based

on TC * currency conversion assigned to the
reconciliation case for the IC close (closing rate in this
case). Right now the transaciton difference flows from
ICMR upon runnning elimination to trigger the difference
split be it with or without a reason code.

- (C) Translation difference: IC difference in GC based on

LC * currency conversion assigned to the reconciliation
case for the IC close (closing rate in this case) –
transaction difference.

- (D) Other difference: (A) - (B) - (C). This captures eg.

process / timing differences that result in different IC
data being processed between ICMR and GR.
.

- (E) Offset to balance out IC entities

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 Process Step 1 - Post inter-company transactions

Step description: How to post IC transactions incl. key information for reconciliation and elimination purpose for both S/4 and non
S/4 companies. In addition to the data release and flat file load used in this case you can also use other available data collection
options.
App: Various

Step Description What to check / Expected Result Status

1 Ø Let’s first post IC transactions between two non S/4 companies. Open Ø Page can be launched successfully.
data monitor (alternatively use app. “Flexible Upload of Reported
Finanical Data”)

2 Ø Load attached IC transaction file to cons. units H3010 and 1010 for
period 006.2020, version Y10.

CCF392 daily load for CCF392 daily load for

reconciliation purposereconciliation
.csv purpose 1010 .csv

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 o Use “overwrite” mode to ensure delta update on repetitive load
with changes

o Transaction currency key, amount, and invoice no. are in the file
as necessary inputs for IC reconciliation
Ø Task log pops w/o errors and shows
both TC and LC keys and amounts
are loaded correctly for cons. units
H3010 and 1010 respectively

3 Ø Go to app. “Display Group Journal Entries” to display loaded data in the

journal list.

4 Ø Now post IC transactions between S/4 and non S/4 companies. First
load AR accounting journal via app. “Upload General Ledger Journals”.
In this case this will post AR document to company code 1020 (S/4
accounting company ) and trading partner 1010 ( non S/4 company)

CCF392 daily post

S4JournalEntry_TemplateHSU.xlsx

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 Transaction currency key, amount,
trading partner, and invoice no. ( in
field “Assignment”) are posted as
inputs needed for IC reconciliation.
5 Ø Post AP document for cons. unit 1010 & parnter unit 1020 manually via
app. “Post Group Journal Entries”

Transaction currency key, amount,

trading partner, and invoice no. ( in
field “Assignment”) are posted as
inputs needed for IC reconciliation.

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 Process Step 2 - Preview IC transactions before reconciliation

Step description: How to get an overview of IC transactions of the whole corporate group and navigate to details BEFORE you
reconcile them.
App: Reconciliation Status Overview

Step Description What to check / Expected Result Status

1 Ø Launch app. “Reconciliation Status Overview”

2 Ø In the filed of Reconciliation Case, select “DEMO1” in the drop down

list. Enter consolidaiton unit “H3010”, “1010”, “1020” ( or choose a
cons. unit hierarchy), period / year “006.2020”, version “Y10”,
Consolidaiton CoA “Y1”. Hit “Go”.
This gives you an overview of the IC
Ø On the screen for cons. unit “1010” (the receivable company in this tradinings for the whole consolidation
case), right click arrow to go to the next screen. group before you run any further
reconciliation or elimination.

Note that this pic. is taken after repeating

ICMR run a few times. Each time you
might get different status depending on
what you’ve run in ICMR.
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3 Ø Toggle currency conversion field on the upper right. We’re interested in the
GC amount converted at closing rate from the TC amount. So, choose
“ZCM_TSL_CLOSING RATE”

4 Ø Check if TC amount posted in step

2 are translated correctly to GC
amount. In this case a difference of
-9 EURO appears – this is the
transactional difference.

5 Ø Optionally toggle to the conversion field “ZCM_HSL_CLOSING RATE”. Ø Check if LC amount posted in step 2
This translates local currency amount to the GC amount at closing rate. are translated correctly to GC
amount. In this case a difference of
20 EURO appears – this is the
totals difference for this specific IC
transaction

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 Process Step 3 - Reconcile IC transactions

Step description: Reconcile the IC transactions posted in process step Post inter-company transactions before month end.

App: Manage Assignment

Step Description What to check / Expected Result Status

number
1 Ø There’re 3 ways to reconcile IC transactions:

a. Fom process step 3.3 above right click on the arraw on the
reconciliation balance detail to app. “Manage assignment by
reconciliation case”.

b. Open app. “Management assignment by matching method”

c. Open app. “Manage assignment by reconciliation case and

display group” ( same app. as a. )

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2 Ø Enter matching method “DEMO1”, consoidation unit “1010”, perod Ø IC transacitons posted in process
/year “006/2020”, consolidation version “Y10”, consolidaiton CoA” Y1”. step 1 appear correctly with status
“New” or “Unassigned” depending on
if you’re running it before.

3 Ø Roll in IC transactions by hitting tab “auto match”.

An assignment document is generated

with the following properties:
Ø “Process status” change from “New”
to “Assigned “.
Ø Matchign rule, match type, reason
code, etc are also updated in the
assignment document
4 Ø The line item (s) of the IC JE appears showing trading partner, TC and
LC amount, invoice number in the field “assignment”, etc.

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Ø We’re done now with the reconciliation before month end. Let’s
navigate on matching screen – slice left and right, drill to IC documents,
send email or notification, etc. Let’s e.g. drill to one of the IC
transactions posted to group JE in step 1 by right clicking on one of the
“Accounting documents”. Note that the accounting documents here
refer to the source IC transactions posted to either ACDOCA or
ACDOCU.

Ø You can communicate with your peers by emial, sendin note, etc.

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 Process Step 4 - Sign off reconciliation

Step description: How to close matching and reconciliation before month-end. This will prevent users from running further matching
or reconciliation in ICMR.
App: Manage Reconciliation Close

Step Description What to check / Expected Result Status

number
1 Ø In release 2008 IC close has no impact on periond end close in S/4
Accounting or task close in Group Reporting. It stops users from
running transactions in ICMR.

Ø Launch app. “Manage Reconciliation Close”

2 Ø Let’s close IC reconciliation for cons. unit 1010 and its trading partner
H3010. Flag it and hit “close” tab directly. You can also preview it first
by hitting the arrow first and close it.

3 Ø Hit “Yes” to confirm the close

4 Ø Reconciliation status changes to “closed”. This will stop you from

running further reconciliation in ICMR until you re-open it.

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 Process Step 5 - Provide trial balance for month-end group close

Step description: How to submit financial statements to the corporate group to kick start the group close at month-end. In
addition to the data release and flat file load used in this case you can also use other available data collection options for the
same purpose.

App: Data Monitor

Step Description What to check / Expected Result Status

number
1 Ø Release trial balance data for S/4 companies with the task “Rel. Uni.J”
You can run it in test or update mode.

2 Ø Load trial balance data for non S/4 companies with flat files. (repeat
process step 2. for the following files)

o Simplified trial balance file for cons. unit H3010

o Simplified trial balance file for cons. unit 1010

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 CCF trial balance loadCCF trial balance load
no TC.csv no TC for 1010.csv

Note that the trial blance files include also the aggegated IC transactions
that were posted earlier to ACDOCU for reconciliation purpose. To avoid
duplicate of data in ACDOCU, use upload mode “delete all” in the trial
blance file to reverse these IC transations into document type “00”. The IC
transactions posted to DT “0B” for reconciliation purpose remain
unchanaged in ACDOCU.

2 Ø Use app. “Display Group Journal Entries” to display released / loaded

trial balance data in the journal list:

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 Process Step 6 - Validation

Step description: How to validate submitted financial statements before running currency translation and IC elimination. This will
help identifying discrepancy between data set used for ICMR and consolidation.
App: Validation rule, validation method, data monitor

Step Description What to check / Expected Result Status

number
1 Ø At the time of preparing this scenario for release 2008 there’s no
standatd content delivered for this purpose. Customers can create their
own validation rules for early detection.

2 Ø Define two validation rules: one for validating IC receivables and the
other rule for validating IC payables. Add the following in the rules:

o FS item attributes : S-IUE-BS-AR, S-IUE-BS-AP, etc.

o Document types for reconciliation (should be identical to the

document type filters defined in the matching method in process
step 0 above) and elimination respectively (should include all
assigned to posting level 10 or less).

o You can add additional filters applicable to your scenarios

when’s needed.

o Assign validation rules to the method, task and cons.unit (skip

detials here as these are existing functions)

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Ø Run validation, analyze gap, and take actions

In this scenario we have a discrepancy of 768 AUD in the reported data of

cons. unit H3010. This discrepency points to the gap betwene data that’s
processed by reconciliation v.s. data that will be processed by the
eilmination. Upon seeing this gap users can analyze the details by drilling
on the validation log to the JE and re-running the reconciliation or re-
submitting the reported data to reduce the gap. Failing to do this at this
stage users will see a bigger “other IC elimination difference” after running
IC elimiantion in process step 8 below.

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 Process Step 7 - Currency Translation

Step description: How to translate the submitted financial statements loaded / released in process step Providing trial balance for
month-end group close to group currency amount.
App: Data monitor

Step Description What to check / Expected Result Status

number
1 Ø Open app. “Data monitor” for period /year “006/2020”, version “Y10”,
consolidation CoA “Y1”.

2 Ø Right click on cons. unit “H3010” for currency translation task. Run it in
update or test mode.
Ø Task log pops with details. Verify If LC amount is translated to GC
amount correctly.

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 Process Step 8 - Run IC Elimination

App: Consolidation Monitor

Step description: Run IC elimination based on a new task in the consolidation monitor and analyze IC difference.

Step Description What to check / Expected Result Status

number
1 Ø Launch app. “Consolidation Monitor” for period /year “006/2020”,
version “Y10”, consolidation CoA “Y1, consolidation group “DEMO”.

2 Ø Right click on task “ IC EL BS.” and choose “update run”. Ø A blank screen w/o error pops. The
new task log with details will be
available after release 2008.
3 Ø Let’s display the eliminaiton journal in app. “Display Group JE”.

o An elimination journal is posted for the IC companies that

includes these line items :

§ Off-set of the receivable against the payable amounts

§ The difference between the receivable and payable ( so

called “Total IC differences”) is split and posted to
various FS items defined in step “Coniguration”.

§ Reason code (s) are derived from IC reconciliation ( step

“Run IC reconciliation”) and posted to the corresponding
IC difference FS items.

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 Process Step 9 - Analyze consolidated IC reports

Step description: How to run consolidated financial statements and analyze details of inter-company eliminations.

App: Group Data Analysis

Step Description What to check / Expected Result Status

number
1 Ø Run app. “Group Data Analysis” to analyze the difference split.

2
In analyzing the consolidated report, you notice the following:

Ø The IC transactions among the consolidaiton units used in this tutorial

are offset by the elimination.
Ø IC eliminations appear in column posting level “20” (“Two-sided
elimination”).

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 Ø Reason codes derived from IC reconciliation for transactional
difference (“FS item - transaction”)

You can analyze further by right click on a cell to drill to the IC elimination
journal entries and / or matching documents.

Legend: = Correct, = Bug, = Open Question, Fixed

Change Log

Date Status Change Author Agreed with

2020.08.07 Final SAP S/4 HANA Product

Development

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www.sap.com/contactsap