Reduce Time-Consuming Reconciliations with Real-Time FI/CO Integration

  • by Manish Dharnidharka, Director, SAP, PwC
  • June 15, 2008
In SAP ERP Central Component (ECC) systems, you can use a different process for reconciling FI and Controlling (CO) documents than what you did in R/3. FI and CO were often out of sync in R/3 because costs that were moved or altered in CO did not automatically translate into FI. See how to set up real-time FI/CO integration so that the two modules are in sync in real time.
Key Concept

Starting with the release of SAP ERP Central Component 5.0, you can configure zero-balancing clearing accounts to balance cross profit center postings as a part of the new G/L and document splitting configuration. Combining this with real-time FI/CO integration settings enables the system to sync FI and CO by profit center in real time.

The Controlling (CO) module is widely used for internal cost allocations. These costs are moved around using assessments, distributions, activity allocations, internal order/work breakdown structure (WBS) element settlement, and so on. Many times, these costs cross company codes, segments, profit centers, business areas, and functional areas. As a result of such CO transactions, CO and FI can become out of sync. This results in a time-consuming reconciliation process and often delays the period-end close process. Automatic real-time FI/CO integration enables the companies to complete a faster period-end close.

To sync FI and CO, in R/3 (until Release 4.7), you needed to activate the Reconciliation Ledger. This ledger keeps track of these internal cost flows. As a part of the period-end close process, you execute transaction code KALC to reconcile FI and CO. This syncs up by company code, business area, and functional area, but not by profit center. The old reconciliation process occurs at period end, so FI and CO are not in sync during the period.

With the release of SAP ERP Central Component (ECC) 5.0 and onward, FI and CO can be in sync in real time. The system automatically triggers real-time FI/CO integration posting when the CO postings cross company codes, segments, profit centers, business areas, and functional areas. Whenever a CO posting crosses any of these parameters, the system triggers an FI posting in real time.

To achieve this, you need to configure for real-time integration of CO and FI. I’ll take you through the required configuration steps in detail, and briefly discuss the preparations for a switch from the R/3 FI/CO Reconciliation Ledger to ECC real-time FI integration that I learned from experience. I’ll also discuss two CO example scenarios that result in real-time FI posting.

Manish Dharnidharka

Manish Dharnidharka has an MBA in finance and information systems and more than 16 years of experience in financial and management accounting. For the last 12 years, he has been working on SAP systems and has led several implementations in FI and CO, including New General Ledger Migrations and implementation. He is currently a Director at PwC.



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