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Flexible Currency Handling

with SAP S/4HANA


Michael Conrad, Christoph Ernst, SAP
February 09, 2017

CUSTOMER
Legal disclaimer

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What is the challenge?
Available Currencies in ERP

In ERP we used to have


– 3 local currencies in FI (including NewGL) FI (BSEG) local Crcy 2nd local Crcy 3rd local Crcy
– 2 currencies in CO
– 3 currencies in Material Ledger CO (COEP) local (Obj) Crcy CO Area Crcy

ML local Crcy 2nd ML Crcy 3rd ML Crcy

Challenges
 Currency conversion not consistent for FI / CO
 Limited number of currencies available in ERP Reporting
 Especially in transferprice scenarios lack of parallel currencies
 Flexible currency handling often implemented separately in SAP BW (high effort,
inaccurate, reconciliation,...) or in FI-SL (different conversion settings,…)

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How does SAP S/4HANA help to overcome the challenges?
Flexible Currency Handling with SAP S/4HANA: Financial Statement

Constant Currency)

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What is the Business value for Parallel Currencies?

SAP S/4HANA provides a flexible, multi-dimensional while still consistent and accurate currency
handling

SAP S/4HANA allows all of the below scenarios at the same time out of one single source of truth in
real-time without manual steps or data transfer to other systems:
– Local Close in local currency
– Group reporting in common currency
– Group reporting with alternative conversion settings (e.g. constant currencies)
– Subgroup reporting in regional currency
– Functional currency
– Hard or index currency for high inflation countries
– Transfer price valuation views

Compared to a subsequent currency conversion in SAP BW or FI-SL, the additional currencies in


Universal Journal are superior, as we provide
– Full audit trail for parallel currencies, as theses are available in the line items of ACDOCA and therefore in all reporting
on top of ACDOCA.
– Consistent currency conversion of journal entries according to conversion settings.
– Integration with process logic for open item clearing, cancellation, allocations.
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More Currency Flexibility: Universal Journal with SAP S/4HANA

In SAP S/4HANA Finance 1605 and SAP S/4HANA 1610 Universal Journal supports additional new
parallel currencies
– Per company code and ledger 2 fix currencies and up to 8 freely defined currencies can be configured.
– New currency types can be configured in customer namespace.
– Freely defined currencies for parallel G/L ledgers do not depend on leading ledger, you can configure the freely defined currencies in each
ledger independently.
– Real-time currency conversion in Accounting Interface with balance zero per document for all currencies
– The freely defined currencies are integrated in several business processes (e.g. Open Item Management), for some specific business
processes differences might occur („Clearing effects“).

Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
(ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

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How to use these new currencies?
Currency Fields of ACDOCA

Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
Entry (ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

Local Currency
– Currency type 10*
– ACDOCA fieldname HSL

Global Currency
– Currency type of controlling area*
– ACDOCA fieldname KSL

Freely Defined Currencies 1 – 8


– You can configure any currency type*
– There is no dependency on currency types of the leading ledger
– ACDOCA fieldnames OSL, VSL, BSL, CSL, DSL, ESL, FSL, GSL

* If you activate parallel valuations with transferprices, then there are additional rules/constraints valid.

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More Currencies in Universal Journal

Compatibility Mapping of Currencies for


FI (BSEG) local Crcy 2nd local Crcy 3rd local Crcy  Compatibility with existing FI / CO /
ML functionality
CO (COEP) Local (Obj) Crcy CO Area Crcy  Migration of transaction data
 Default Mapping is provided
ML local Crcy 2nd ML Crcy 3rd ML Crcy

Mapping examples

Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
(ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

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Configuration of Ledger and Currencies

Viewcluster FINSVC_LEDGER
– Tx FINSC_LEDGER

 Contains Maintenance Views for


– Definition of Currency Types
– Currency Conversion Settings
– Ledger Master data
– Company Code Assignment to Ledgers
– Used Currency Type per Ledger / Company

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Using New Currencies

New Installations
– You can configure the new currencies in the universal journal.
– Please carefully consider, which currencies are integrated with BSEG, FI-
AA, ML, CO and which is generically converted.
Compatibility view of applications
on currency types

Migration of Customer Installations


– Migration from ERP
– Old currency configuration is migrated without changes
– S/4H Migration is not able to introduce new currencies.
– Currency configuration of installation with Transfer Prices active makes
use of the new currency fields (see EKT for Transfer Prices or details).
Migration will set up at multivaluation ledger.
– Usage of additional currencies is not possible without a SLO project, which
is currently not yet available.
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How does the currency conversion work for these new currencies?
Currency Conversion for New Currencies

– Real-time currency conversion for all currency types is available


– Balance zero per document guaranteed
– Some processes with a sequence of related postings require that the amounts are selected from historical
data. This is not yet supported for all processes. As fallback the amounts are converted with the current
exchange rate. In such a case the process might leave a leftover, caused by rounding differences or
different exchange rates.
Currency conversion provided by processes for new currencies is available for:
 Open Item Management FI-AR, FI-AP, FI-GL
 Reversals
 CO Allocations
 GL Allocations
– Foreign currency valuation is possible for new currencies

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Document wise Currency Conversion

HSL KSL OSL BSL CSL DSL …


10
HSL 30
KSL 40
OSL 60
BSL Z1
CSL DSL …
10 90,- 30120,- 40 60,- 60 30,- Z1 10,-
90,-
- 30,- -120,- 80,-
40,- - 20,- -10,- - 3,34
Journal Entry 1
Journal Entry 1 60,-
- 30,- 80,- -- 20,-
- 40,- 40,- -10,- - 3,33
- 30,- - 40,- - 20,- - 10,- - 3,33

Provided by process Generic “document wise”


currency conversion
• Balance zero per document
• Currency conversion with relevant
exchange rate according configuration

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Document wise Currency Conversion in a Process Chain

HSL KSL OSL BSL CSL DSL …


10 30 40 60 Z1
Journal Entry 1 90,- 120,- 80,- 30,- 20,-
Journal Entry 2 60,- 84,- 38,- 23,- 15,-
Journal Entry 3 -150,- -204,- 118,- - 56,- - 37,-
Balance: 0,- 0,- 0,- 3,- 2,-

Provided by process Differences when summarizing


journal entries of process chain
• Caused by rounding effects
• Caused by changes in exchange rates
for different posting dates

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Process Integrated Currency Conversion

HSL KSL OSL BSL CSL DSL …


10 30 40 60 Z1
Journal Entry 1 90,- 120,- 80,- 30,- 20,-
Journal Entry 2 60,- 84,- 38,- 23,- 15,-

Journal Entry 3 -150,- -204,- 118,- - 53,- - 35,-


Balance: 0,- 0,- 0,- 0,- 0,-

Provided by process Provided by process

Process integrated currency handling for all currencies available for


– Open Item Management (AP, AR and GL)
– CO Allocations
– GL Allocations

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Currency Conversion for New Currencies - Limitations

 Process integrated currency conversion currently only for “classic” currencies in the following processes:
– CO settlement, reposting
– Fixed Asset processes
– Material Ledger processes

 New currencies are converted document wise also for these processes.

 We plan to enable process integrated currency conversion for more processes in coming releases, but we
cannot communicate a concrete release date as of today.

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Summary
Summary

SAP S/4HANA provides a flexible, multi-dimensional while still consistent and accurate currency
handling.

Customers find a common currency configuration for the Universal Journal for FI / CO / FI-AA and ML with
consistent currency conversion for common currencies.

SAP S/4HANA provides substantially more flexibility in currency configuration, especially for new installations.

All currency constellations of ERP can be migrated automatically to the universal journal.

The former strict limitations for parallel currencies installation using transfer pricing are overcome.

Compared to a subsequent currency conversion in SAP BW or FI-SL, the additional currencies in Universal
Journal are superior, as we provide
– Currency conversion real-time in the posting, according to conversion settings.
– Full audit trail for parallel currencies, as theses are available in the line items of ACDOCA and therefore in all reporting
on top of ACDOCA.
– Integration with process logic for clearing, cancellation, allocations.
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What do you think?
Contact:
Michael Conrad
SAP SE
Michael.Conrad@sap.com

Christoph Ernst
SAP SE
Christoph.Ernst@sap.com