Best Practices for R/3

Financial and CO-PA

Reporting
Quentin Hurst
Virtuoso

What Well Cover

Objective: Provide best practices you can implement at home to
get the most out of your R/3 Financials investment and reports

Looking at R/3 Financials reporting overview

Getting the most out of FI/CO
Leveraging CO-PA best practices

What Well Cover

Looking at R/3 Financials reporting overview
Getting the most out of FI/CO
Leveraging CO-PA best practices

R/3 Financials Reporting Overview

Now more than ever, financial reporting is at the
forefront of an organizations reporting needs

Greater visibility to their data (more/better reports)

Verification that existing reports are timely and accurate

Driven by such factors as

Stock market collapse

New legislation Sarbanes-Oxley
New board of directors

Building Block

R/3 Financials Reporting Overview (cont.)

This places new requirements on financial reporting
teams

Must think outside the box

Use new and different reporting tools
Ensure that documented reporting standards exist and
are followed
Need additional knowledge on new tools and best
practices
Increased interaction and pressure from upper
management

For a historical perspective on our current and future economic and

regulatory environment, read Manias, Panics, and Crashes: A History Of
Financial Crisis by Charles P. Kindleberger

R/3 Financials Reporting Overview

Top 5 Pitfalls for R/3 Financial Reporting Tools

1. Not knowing all of the reporting options in R/3

When all you have is a hammer, everything looks like a

nail

2. Not knowing which tool to use for which report

3. Lack of report performance optimization
techniques
4. Not making advanced configuration settings,
which limits the reporting options
GOTCHA!
5. Bad design decisions in the reporting submodules,
which negatively impact reporting options

R/3 Financials Reporting Overview

FI/CO Reporting Universe

Painter/
Writer

Drill-down

Reporting
submodules
SAP
Query

Cash
Management

CO-PA

Special
Purpose Ledger

R/3 Financials Reporting Overview

Picking the Right Tool
1.
2.
3.
4.
5.
6.

Report request
no
1

no
2

Canned
report

no
3

Is a canned report available?

Can I make a config. change to use a canned report?
Can I use drill-down reporting?
Can I make a config. change to use drill-down reports?
Can I use Painter/Writer?
Can I make a config. change to use Painter/Writer?

no
4

Drill-down

no
5

no
6

Painter/
Writer

no
7

no
8

Reporting
submodules

no
9

no
10

SAP
Query

11

ABAP

R/3 Financials Reporting Overview

Picking the Right Tool (cont.)

7. Can I use a submodule (CO-PA, SPL, Cash Mgmt.)?

8. Can I make a config. change to use a submodule?
9. Can I use SAP Query?
10. Can I make a config. change to use SAP Query?
11. Can I write the report in ABAP?

Report request
no
1

no
2

Canned
report

no
3

no
4

Drill-down

no
5

no
6

Painter/
Writer

no
7

no
8

Reporting
submodules

no
9

no
10

SAP
Query

11

ABAP

R/3 Financials Reporting Overview

Picking The Right Tool Dont Forget Periodicity

Accounting Non-accounting
period
period
Painter/Writer Standard Table

Painter/Writer LIS/SIS structure

CO-PA

X*

Drill-Down

SAP Query

X*

Cash Management

Special Purpose Ledger

X**

R/3 Financials Reporting Overview

In This Session, Youll Learn...

Key reporting tools (and submodules) you should be

using
How to get the most out of these reporting
tools/modules
How to alleviate common performance problems
Tips for maximizing your reporting options when
configuring the reporting submodules
Advanced configuration techniques that will enable
additional reporting functionality (in Appendix B on
the CD)

What Well Cover

Looking at R/3 Financials reporting overview
Getting the most out of FI/CO
Leveraging CO-PA best practices

Getting the Most from R/3 FI/CO

Explore R/3 drill-down reporting

Discover the Special Purpose Ledger
Start using R/3 Cash Management!
Consider implementing CO-PA

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting

Powerful, flexible tool that draws data from InfoCubes

Enables reporting on multiple characteristics at once

Users can slice and dice data
A single report can fulfill multiple report requests
Originally built for CO-PA, but now also usable for other
FI/CO areas
Foundational technology for BW reporting

See Appendix B for more on how to use this tool for PCA/Costing

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting (cont.)

Powerful, flexible tool that draws data from InfoCubes

(cont.)

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting (cont.)

Where can I use it?

General Ledger (G/L)

Accounts Payable (A/P)
Accounts Receivable (A/R)
Profit Center Accounting (EC-PCA)
Treasury (TR)
Enterprise Controlling Consolidations (EC-CS)
Controlling-Profitability Analysis (CO-PA)
Project Systems
Product Costing
Special Purpose Ledger

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting (cont.)

There is no single place to access drill-down reporting

You must go to the specific application area you want to do

drill-down reporting on

See the handout on drill-down reporting for transaction code

characteristics and value fields for each area

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting Output Types

In 4.6C, there are new output types that you can use

Standard drill-down layout

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting Output Types (cont.)

New layout options

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting Output Types (cont.)

Graphical output

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting Output Types (cont.)

ALV output

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting Output Types (cont.)

Tip

You can give your users the option of selecting which output
type to use when executing the report

Getting the Most from R/3 FI/CO

Tips for Drill-Down Reporting

Dont include too many characteristics in your report

Hinders performance
A good rule of thumb is to limit characteristics to six or less

Use report-to-report interface to link to other reports

Line item report for reconciliation

Other drill-down reports that have additional characteristics
Other SAP report types that are useful for your report

Use frozen data for reports that take a long time to run

See Appendix A for details!

Use mass print settings when you need hard copies

Getting the Most from R/3 FI/CO

Explore R/3 Drill-Down Reporting (cont.)

Creating and
using drilldown
reports

Getting the Most from R/3 FI/CO

Discover the Special Purpose Ledger

The Special Purpose Ledger is a user-defined,

flexible ledger

Captures only what you want, for the activities you want, in
the time frame you want
In very general terms, SPL can be thought of as the CO-PA
of FI

What can I do with an SPL?

An SPL can update based on any activity

You can pick up FI accounts as well as cost elements
You can set up a series of ledgers that roll-up into one
another for consolidated reporting
R/3 Profit Center Accounting is actually a Special Purpose Ledger!

Getting the Most from R/3 FI/CO

When is the SPL a Good Fit?

The SPL is particularly good when you need to:

Report off of a different fiscal year variant

Report off of a different organizational structure
Report on a different accounting basis (cash basis)
Combine data from different parts of the system that
arent normally available in a single transaction or
reporting tool
Consolidate data that falls outside of EC-CS or SEM
Consolidations
Stage data for export to an external consolidation tool
Report off a subset of system activities
Handle complex foreign currency reporting issues

Getting the Most from R/3 FI/CO

Special Purpose Ledger Best Practices

Include all currencies you need when defining the

ledger

It is hard to add them later! At a minimum, include transaction

currency and local currency

Research how your data flows before trying to set up an

SPL

Make sure you identify all of the activity types that you need to
map

Use user exits in movement types

To capture all of the characteristic data you need

You will also have to maintain integrated master data via
transaction code GCS1

Getting the Most from R/3 FI/CO

Special Purpose Ledger Best Practices (cont.)

Use Painter/Writer and drill-down to create SPL reports

Note

Your SPL totals table is available as a reporting table in

Painter/Writer
Use transaction code GCRE1 to activate drill-down reporting
for your SPL
You will also have to maintain integrated master data via
transaction code GCS1

See also: How to Tap into the Power of the Special

Purpose Ledger Quentin Hurst

Getting the Most from R/3 FI/CO

Start Using R/3 Cash Management

What is Cash Management?

Submodule within Treasury

Used to report short-term and medium-term cash
position and forecast

Key Cash Management features you should use

Note

Electronic bank statement

Lockbox processing
The Cash Management Position (CMP) report
The Liquidity Forecast (LF) report
Well cover the CMP and LF reports since theyre particularly
important!

Getting the Most from R/3 FI/CO

What Is the CMP Report?

Used to forecast cash position in the short-term

Based on banking transactions entered in R/3

Looks at actual cash transactions only
Great tool to help manage float timing differences of
when different deposits, outgoing checks, wires, etc.,
clear the bank

T code
FF7A

Getting the Most from R/3 FI/CO

What Is the LF Report?

Used to forecast liquidity position over short/medium term

Forecasts future obligations and receipts

Based on business transactions entered in R/3
Includes transactions to convert outgoing/incoming documents
to cash
Purchase orders, A/P invoices
Sales orders, A/R invoices

Getting the Most from R/3 FI/CO

What Is the LF Report? (cont.)

T code
FF7B

Getting the Most from R/3 FI/CO

Cash Management Best Practices

The CMP and LF can be combined

You can merge the two reports together to get a

consolidated picture of your cash and liquidity positions
Provides the optimum view of short-term cash position
and forecasted cash position

Use a proper bank account G/L structure

Set up the appropriate number of planning groups

You can always combine

Key to a good CMP is value dating timely

transaction entry

What Well Cover

Looking at R/3 Financials reporting overview
Getting the most out of FI/CO
Leveraging CO-PA best practices

Leveraging CO-PA Best Practices

Consider Implementing CO-PA

Why Implement CO-PA?

R/3 module for tracking and analyzing profitability

Helps you understand where your profits come from
Captures revenue and cost of goods sold conditions from
Sales and Distribution (SD)
Can also capture variances and assessments
Materials Manager (MM) variances, Production Planning (PP)
variances, CO assessments, and FI journal entry activity

Gives you the information you need to make strategic

decisions

Which are the most profitable customers?

What product lines give me maximum contribution margin?

Leveraging CO-PA Best Practices

Top CO-PA Pitfalls

Poor report performance

Bad design decisions limits what data you can
report on
Inconsistent value for the same key figure on
different reports
Difficult or erroneous reconciliation
GOTCHA!

Leveraging CO-PA Best Practices

Getting the Most from CO-PA

1.
2.
3.
4.

Choose value fields strategically

Ensure consistency with key figure schemes
Boost performance with summarization levels
Hasten runtimes with report splitting and Report/Report
Interface (RRI)
5. Reconciliation tools

In the Appendix on the CD, there are five more CO-PA

best practices!

Leveraging CO-PA Best Practices

Strategically Choose Your Value Fields

Many teams skimp on the number of value fields they

set up

Example: setting up a single field called Net Revenue

instead of the components as separate fields

R/3 wont allow you to break the data out later

Its indivisible once its posted

As time goes on, you will be asked to break out Net

Revenue to its individual components for analysis

Leveraging CO-PA Best Practices

Strategically Choose Your Value Fields (cont.)

Break potentially useful conditions into their own fields

Even if you dont have a current requirement to justify the

field, in the future someone will probably ask

You can always add value fields together when detail isnt
needed

Leveraging CO-PA Best Practices

Ensure Consistency with Key Figure Schemes

Key figure schemes are groupings of value fields

You set them up once and use them across your reports
Ensures line items have the same definition across
reports
Net revenue, total cost of goods sold, etc.
When creating your report forms, you have the option of
using value fields or key figures

Leveraging CO-PA Best Practices

Ensure Consistency with Key Figure Schemes (cont.)

Set up key figure schemes via transaction KER1

Leveraging CO-PA Best Practices

Ensure Consistency with Key Figure Schemes (cont.)

Leveraging CO-PA Best Practices

Ensure Consistency with Key Figure Schemes (cont.)

How to use them in reports

When creating the report form, you will be prompted on

whether to use characteristics, value fields with
characteristics, or a key figure scheme

Leveraging CO-PA Best Practices

Boost Performance with Summarization Levels

Summarization levels speed up report runtimes

You define summary levels (tables) and specify an

update frequency
R/3 generates, loads, and updates the summary tables
When designing reports, you tell R/3 to use the
summarized data
R/3 fills in any missing data from original table (new with
4.5!)

The best tool for maximizing CO-PA report

performance!

Leveraging CO-PA Best Practices

Boost Performance with Summarization Levels (cont.)

Summarization levels speed up report runtimes

SL

First

Report

SL

SL

R/3
If no
ne fo
und

CE3

Leveraging CO-PA Best Practices

Boost Performance with Summarization Levels (cont.)

How to set them up

1. Define summarization levels using transaction code
KEDV
2. Then tell R/3 to load the level by executing report
RKETRERU
Transaction code KEDU
3. Schedule report RKETRERU to periodically run to
update your levels
Create variant in KEDU, then schedule a batch job
to run off of that variant

Leveraging CO-PA Best Practices

Boost Performance with Summarization Levels (cont.)

Tcode
KEDV

Leveraging CO-PA Best Practices

Boost Performance with Summarization Levels (cont.)

Keys to success

Tip

Choose a frequent update strategy to get the most boost

normally a nightly update strategy is used
Set up and transport your levels from your Gold/CTS client
Include dependent characteristics in summarization levels
Dont define too many summarization levels (8-20 suffice)
Avoid redundant summarization levels
Make sure to periodically delete unused summarization
levels
Use the delivered summarization level tools
You can also use the summary tables created by summarization
levels to hasten custom ABAP reports

Leveraging CO-PA Best Practices

Hasten Runtime with Splitting and RRI

Report splitting and report/report interface

Both improve performance

Break one report into multiple reports
Useful with large number of characteristics or high data
volume

Whats the difference?

Report splitting one report automatically calls the other

RRI from the first report list you use, manually navigate
to the lower-level report using a menu path
Splitting
RRI
Original slow report

Faster runtime: 2 smaller reports;

one calls the other when needed

Leveraging CO-PA Best Practices

Hasten Runtime with Splitting and RRI (cont.)

How to split reports

Use transaction code KE3L

Leveraging CO-PA Best Practices

Hasten Runtime with Splitting and RRI (cont.)

How to set up a report/report interface

For drill-down reporting, go to the Options tab in either

the create or change mode and click on the Report
assignment button

Leveraging CO-PA Best Practices

Hasten Runtime with Splitting and RRI (cont.)

When to use splitting

Reports that use a lot of characteristics or

characteristics that have a lot of values performance
becomes an issue
Users typically do the same drill-down, e.g., company
code, then product line, then customer

When to use RRI

When you want to link different types of reports, such as

ABAP programs to Painter reports or SAP queries to
drill-down reports
Users dont use a single drill-down approach, so splitting
isnt a viable option
When splitting a report, users are limited to specific drill-downs

Leveraging CO-PA Best Practices

Reconciliation Tools

Standard delivered CO-PA reconciliation report in R/3 4.5+

Name was derived from its transaction code KEAT

Tries to reconcile FI, PCA, SD, and CO-PA at an SD
condition/account level
Provides a quick overview of any discrepancies
Offers drill-back functionality for out-of-balance entries

Leveraging CO-PA Best Practices

Reconciliation Tools KEAT

T code
KEAT

Leveraging CO-PA Best Practices

Ease Reconciliation with KEAT

Unfortunately, KEAT has some drawbacks

Not completely reliable, especially in make-to-order

environments
FI initiated updates arent tracked well or consistently
Report output isnt customizable

The verdict:

Use as a quick check to identify errors

If KEAT shows an error, generally it is an error
Doesnt always show all errors
Still need a more reliable reconciliation tool for detailed
reconciliations

Leveraging CO-PA Best Practices

Set up COS for Easier Reconciliation

What is Cost of Sale (COS) reconciliation?

Simply stated, it is the creation of a COS cost element in

CO, coupled with the necessary configuration to force a
CO-PA segment update during any COS activity
The solution provides
Dual update into CO-PA delivery and billing
A separate value field for each update
A low-data alternative to setting up account-based COPA

Leveraging CO-PA Best Practices

More Best Practices in the Appendix!

1.
2.
3.
4.
5.

Benefit from R/3s frozen data feature

Boost performance with summarization data
Use realignments for mass changes
Leverage line item reports
Start using characteristic hierarchies

Resources

Dig into your system...

On CO-PA or financial reporting: help.sap.com
The R/3 Reporting Made Easy Guidebook
Configuring SAP R/3 FI/CO, by Quentin Hurst and
David Nowak Sybex 2000
On your CD

Drill-down reporting handout

Appendix A: More CO-PA best practices
Appendix B: Using Drill-Down for PCA and Product
Costing!

7 Key Points to Take Home

Drill-down reporting isnt just for CO-PA anymore
Search for the node information system in the IMG

You may be surprised at the tools you will find

There are report optimization techniques in CO-PA

that arent available to other reporting tools
There are specific reasons why you would use a
Special Purpose Ledger

7 Key Points to Take Home! (cont.)

SAP Query has been given a bad wrap give it a try
Cash Management Position and Liquidity Forecast
are two strategic reporting tools that are often
overlooked
Dont forget the Appendices

Your Turn!

Questions?

How to Contact Me:

qahurst@virtuosollc.com