Unearth the Hidden Secrets of Zero-Balancing in the New G/L

  • by Mitresh Kundalia, Director — SAP Practice, Quality Systems & Software
  • July 15, 2007
International financial regulations require you to zero-balance your financial data by certain characteristics, such as segments. See how to zero-balance characteristics in the new G/L, and how the system addresses the varying number of line items you may have.
Key Concept

Using document splitting with zero-balancing, the system posts additional line items so that the document is balanced for specific characteristics in addition to the document as a whole. The number of such additional zero-balancing clearing items depends on the number of unique characteristics in the document. Also, the system populates the partner characteristics to keep track of additional items with reference to unique characteristics.

Document splitting using zero-balancing in the new G/L ensures not only that the document is balanced, but also that the document is balanced for pre-defined characteristics. For example, you can configure a financial document so that it is balanced for the characteristic segment. You can pre-define the characteristics that you use for zero-balancing. In my examples, I use segments as the characteristic. A segment could be a line of business or a geographical location. You may need to ensure that your segments are zero-balanced to comply with International Accounting Standards Board regulations, and this process helps you report financial information by lines of business and/or geographical areas represented by segments.

In simple terms, when you perform document splitting using zero-balancing in the new G/L, the system posts additional zero-balancing clearing items so that the document is balanced for these characteristics. I’ll go through three examples to demonstrate some of the hidden secrets of how the system manages zero- balancing: one simple example to show you some of the basics, and then examples using three and four line items to show you how the system reacts to the different number of line items you may have. First I’ll start by going over some of the fundamentals of zero-balancing.

Mitresh Kundalia

Mitresh Kundalia heads the SAP practice at Quality Systems & Software (www.QSandS.com), a consulting firm specializing in SAP S/4HANA, SAP General Ledger, and complex System Landscape Optimization (SLO)-type reorganizations. Mitresh is widely acknowledged as a leading SAP expert, with multiple publications and an SAP-PRESS book to his credit. He has published more than 50 peer-reviewed articles and white papers, and he has given presentations at various SAP conferences and events. Mitresh is the chief solutions architect of General Ledger Migration Optimizer (GLMO), a leading product to accelerate and jump-start the SAP S/4HANA and SAP General Ledger initiatives; SAP Data Reorganization Optimizer (SDRO), an SLO-type product for managing complex system landscape reorganizations; and Group Currency Activation and Conversion (GCAC), a product suite to manage introduction of parallel currencies and conversion of data in a live SAP system.

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