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Home > Resources > Exploring ledgers in SAP S/4 HANA Cloud: Mastering Financial Transparency

Introduction:

I’ll go into more detail regarding ledgers in SAP S4 HANA in this blog article. In SAP S4 HANA, ledgers have many kinds of accounting records. By reconciling all company transactions in the SAP Software system, General Ledger Accounting is able to present a complete view of external accounting and accounts. Since the company’s other operating departments and this system are completely integrated. As a result, it guarantees that the accounting data is consistently correct and full. Additionally, the ledger papers are based on financial statements and legal accounting regulations established by several SAP accounting principles. It aids businesses in recording and disclosing their financial data.

Types of Ledgers in SAP S4 HANA:

Ledgers in SAP S4 HANA Finance are two types. These are the following: –

Standard Ledgers (Leading or Non-Leading Ledger)
Extension Ledgers

S4 HANA Standard Ledger in SAP. Leading and Non-Leading Ledger are both parts of Standard Ledger.

Leading Ledger

Each customer has a single leading ledger in New G/L that applies to all company codes. Choosing which accounting standard to apply in the leading ledger is a crucial choice that needs to be made. Once we have defined this assignment, we cannot disable it. Only one ledger can be referred to as the leading ledger. The leading ledger 0L is offered by SAP as standard. Let’s now explore the ledger configuration. To view a list of the ledgers already present in the system, use the menu path Financial Accounting>Financial Accounting Global Settings>Ledgers>Ledger> Define Settings for Ledgers and Currency Types.

Example- A leading ledger “0L” for multiple company codes 1000,2000,3000 & 4000

Non-Leading Ledger:

Along with the leading ledger, the non-leading ledgers are utilized as parallel ledgers. Within a general ledger, we maintain ledgers called parallel ledgers.

These can be used to apply several accounting rules, like IAS/IFRS or US GAAP, among others. Both Classic GL and New GL are standard Ledgers. The two methods for implementing General Ledger Functionality are as follows. We can gain a lot of advantages by implementing the New GL.

Extension Ledger in SAP S4 HANA:

Understanding that SAP further developed Extension Ledgers in addition to the Leading and Non-Leading Ledgers is crucial to understanding the notion of SAP S/4 HANA FINANCE Ledgers. Options for CO Reporting include extension ledgers. These ledgers are stapled on top of an underlying ledger, which can be either a leading or non-leading ledger (Standard Ledgers). There are no data duplicates as a result. Ledger types for SAP S/4 HANA are Standard Ledgers (Leading or Non-Leading Ledgers) and Extension Ledgers, as previously mentioned. The system automatically creates a Ledger Group in the background whenever a Non Leading Ledger or Extension Ledger is established. This ledger group cannot be changed, indicating that no new ledgers may be added to the group. However, you can make more ledger groups that are made up of several non-leading ledgers. Using the Transaction codes FB50L, FB01L, FV50L, KB11N, and FAGL_FCV, manual postings can be made to Non-Leading Ledgers or Extension Ledgers. In order to make the Non Leading Ledger or Extension Ledger comply with the Accounting Principle assigned to the Ledger, these manual postings are deviations from the Leading Ledger. As a result, postings that are specific to a ledger only impact that ledger; postings that are not specific to a ledger post to the leading ledger. In contrast to individual Ledgers, Ledger Groups are where postings are made. Therefore, if you wish to publish manually to several Non-Leading Ledgers at once, you can construct a Ledger group that includes all of these Ledgers.

Ledger reports:

Ledgers can be used to obtain reports, as seen below:
Table ACDOCA contains all postings to the Leading Ledger.

Non-Leading Ledger: Table ACDOCA includes both automatic and manual postings to the non-leading ledger.

Extension Ledger: all Leading Ledger postings and any manual Extension Ledger postings are represented in Table ACDOCA.

Example Extract of ACDOCA and reporting from Ledgers

The colors represent the Ledger to which the records in ACDOCA are relevant to.

Differences and Similarities:

The features of Extension Ledger and Non-Leading Ledger are strangely similar.

Both permit the application of parallel accounting, which uses a separate accounting
principle.
The transactions FB01L, FB50L, and FV50L can be used to manually post transactions to
both ledgers.
Subledger accounts or GL that are managed as open items may not have manual postings
made to either of them.
The posting period and the underlying Ledger’s posting period may differ.
Both ledgers’ currencies ought to be identical to those of their underlying ledger.

The most important thing is to decide which ledgers are necessary for your company right
now, adding ledgers later might be challenging and time-consuming. The business must be
well informed of the accounting and tax reporting standards. The group’s primary
accounting structure should be reflected in the Leading Ledger.

Conclusion:

The key to SAP S/4 HANA’s financial prowess are ledgers, which give businesses access to
unprecedented clarity, accuracy, and efficiency in their financial processes. This blog seeks
to equip readers with the knowledge and confidence they need to effectively navigate the
dynamic world of ledgers inside SAP S/4HANA by analysing the specifics of various ledger
kinds, configuration procedures, and advanced reporting features. Mastering ledger
management will continue to be a crucial component of financial excellence as technology
develops, advancing firms toward a more promising, data-rich future.