Purpose of the blog
This blog gives you an understanding about the new feature of regrouping and reclassification in S/4HANA Cloud, and it will also teach you the differences between the old and new solution so that you can make the correct decision for your implementation.
Key point to understand
- This function is required to prepare balance sheet as you need to show your accounts payables and accounts receivable G/Ls aging or maturity wise such Accounts Payable-Current, Accounts Payable- Non-Current or it could be also like Accounts Payable- Short Term, Accounts Payable- Mid Term, Accounts Payable- Long Terms. It depends on the business or accounting standard reporting requirements.
- This function is also used when you must regroup accounts payable and accounts receivable balances due to if Accounts Payable account has a debit balance and Accounts Receivable account has a credit balance. If you show as it is in your balance sheet, then balance will not be accurate and hence you need to regroup.
- It is part of Advanced Valuation in General Ledger, so to use this functionality you need to activate Advanced Valuation function in your system (or better say you would not deactivate it, as by default this Advanced valuation is activated going forward)
- You would need G/L Accounts for Current AR/AP and Current AR/AP G/L Account for mapping.
- However, you would not need Adjustment GLs for this new function. As now the posting will happen directly in Reconciliation G/Ls (earlier for this we used to use Adjustment G/Ls for these postings)
- This function is part of J58 Scope item in S/4HANA Cloud
- It is integrated with the other processes of advanced valuations represented by the following jobs:
- Advanced Foreign Currency Valuation
- Post Discounting of Long-Term Assets and Liabilities
- Post Credit-Risk Based Impairment
|This comparison will help in making the decision in choosing the right option for you.|
|Sr. No.||Base||Regroup Receivables/Payables||B/S Reclassification (New)|
|1||G/L Accounts Need||> G/L Accounts for Balance sheet Adjustment and Target G/Ls required. Additional G/Ls need to be created.
> Original G/Ls are not touched with posting for FCV postings
|> Only Target G/Ls required
> Posting happens on the original G/Ls (e.g., Accounts Payable, Accounts Receivable, Banks, etc.)
|2||Transaction Reversal||> Transaction reversal on the first of the next month||> No reversal posting
> Values are posted as delta to previous run
|3||Deactivation||Once Advance valuation is activated for Ledger company code this feature won’t be available in the system||Once the postings are there in production system, then function cannot be deactivated.|
|5||Support latest and future innovation||No||Yes|
|4||Decision||Compare feature and decide||Decision is very crucial to use or not to use this function as you cannot go back once you’ve activated Advanced Valuation in Financial Accounting for a ledger and company code in an accounting principle, and after that you’ve made postings in the production, you can no longer deactivate Advanced Valuation in Financial Accounting for this ledger and company code.|
|5||Applicable App||> Regroup Receivables / Payables app
> Batch Input Sessions in My Area
|> Schedule General Ledger Jobs app + Job Template: Post B/S Reclassification|
- Define Aging Increment for Advanced Valuation
You can define your own aging also or use the standard one
If you have you regroup your accounts receivable and payables balances as Current (Short Term) and No-Current (Long Term) only then use SGLOBRCL aging
If you have you regroup your accounts receivable, and payables balances Short-Term, Mid-Term and Long-Term then use S3IRCL aging
- Define Rules for B/S Reclassification
- Valuation rule SBSR is used for Current (Short Term) and No-Current (Long Term) grouping
- Valuation rule SLBS is used for Short-Term, Mid-Term and Long-Term grouping
You can create your own valuation or use the standard ones.
Here you need to assign Aging for Liability and Aging for Asset which we have define in the first step of the config.
- You would notice original accounts are used such Accounts Payables and Accounts Receivable. You do not need adjustment account now.
- Source Account column is like outgoing account and Target Account Column is like Incoming account. Rest is self-explanatory.
- Assign B/S Reclassification Rules to Accounting Principle
You need to do change or do this config if you have defined your own valuation, or you want to use the different standard valuation rule your accounting principle.
Execution of this function
Schedule General Ledger Jobs/ Job Template: Post B/S Reclassification
Scheduling the job
Analysing the result