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Motivation
Standard hierarchies for cost and profit centers are still available in S/4HANA Cloud. When creating a cost or profit center, you need to specify a standard hierarchy node.
Standard hierarchies are still based on cost and profit center groups, not on Global Hierarchies, and you need to be maintain them in the apps Manage Cost Center Groups and Manage Profit Center Groups.
Especially in S/4HANA Cloud, public edition, this can sometimes cause confusion since the top nodes are predelivered (“0001” for cost centers and “YBPH” for profit centers) and you (as an end user) are typically used to working with the app Manage Global Hierarchies where the standard hierarchies cannot be found and maintained.
The main goal of a standard hierarchy is to ensure there is one hierarchy which contains all cost centers or profit centers and represents the whole enterprise structure. Thus, they can be used to get an overview of the whole enterprise, for example in reporting.
In this blog, I would like to show you how to use flexible hierarchies to achieve the same goal. In the example, I’m using cost centers, but the same procedure can also be applied to profit centers.
Creating a flexible hierarchy based on standard fields
You can generate flexible hierarchies based on the attribute values maintained for the cost or profit center master data. The attributes used are specified in a defined order. This already offers you a way to represent an enterprise structure based on attributes which are already maintained in the master data.
One simple example for cost centers is to use the following attributes:
- Country
- Company code
- Cost center category
You can also specify any other combination and order of attributes can.
Figure 1: Creating a flexible hierarchy for cost centers based on Country/Region Key, Company Code and Cost Center Category
If you don’t enter any further filter criteria (for company code or validity date), the hierarchy will contain all cost centers existing at the time of creation of the hierarchy. You can check the generated hierarchy by using the “Preview” button.
Figure 2: Preview of generated hierarchy
You (as the end user) can now check the results. If any of the attributes used for the hierarchy generation (in our example, country), have not been maintained in the master data, the respective entries will be displayed under “Unassigned”. They will still be included in the generated hierarchy under the node “Unassigned”, but not in the desired node structure.
You can avoid this by using mandatory fields like “Company Code” and “Cost Center Category” only or by ensuring that the necessary fields are maintained in the master data.
If the results are fine, you can submit the flexible hierarchy and use it anywhere where global hierarchies (without compatibility mode) are used, for example in reporting.
You can update existing hierarchies at any time. This is necessary, for example, if new cost centers were created and need to be included in the hierarchy. You need to make sure this is done during the master data creation process. This approach is one shortcoming compared to the standard hierarchy which always contains all entries in real time since they are assigned during creation.
You might want to have an additional department structuring in such a flexible hierarchy which represents the enterprise. In fact, both cost and profit centers contain a “Department” attribute which you can use for this purpose. However, it is a free text field, and it would require manual effort to maintain only existing department values.
Thus, I would like to show you how to use a custom field with an additional value list.
Using a custom field in flexible hierarchies
You can enhance both cost and profit center master data with additional attributes in the app Custom Fields and Logic. The following example shows a cost center that is enhanced with a “Department Code” attribute and used in a flexible hierarchy.
Adding a custom field with value list
To add a custom attribute to a cost center in the App Custom Fields and Logic, select the following “Business Context”: “Cost Center Master Data (FINS_COST_CENTER)”.
Specify the length of the field and choose the field type “Code List”. Then, you can maintain screen text and code values with texts. For more information, please see here: SAP Help
Figure 3: Custom field with code values for cost center Department Code
Make sure you enable the custom field in the cost center master data and in the flexible hierarchies.
Figure 4: Custom field enablement in required CDS views
Once published, you can add the field in the Manage Cost Center app (in this example in “Organizational Units”).
You can maintain the values by using the value list.
Figure 5: Custom field Department Code with value list in cost center master data
Using custom fields in flexible hierarchies
If you have created the custom field as described above, you can use it as a standard attribute in the flexible hierarchy generation.
Figure 6: Creating a flexible hierarchy for cost centers based on Company Code and Department Code
You can check the results with the preview function.
Figure 7: Flexible hierarchy for cost centers based on Company Code and Department Code
Conclusion
Using flexible hierarchies with any combination of standard and custom attribution are a powerful way to generate enterprise structure hierarchies.
In addition, you can create global hierarchies for other purposes in reporting or in Universal Allocation (in compatibility mode).
If this approach works for you, there is no need to maintain the standard hierarchies anymore. Instead, you can just use the delivered top nodes when you create cost or profit centers.
We would highly appreciate your feedback on this blog, especially if you have any use cases in which a manually created standard hierarchy is still needed.
More Information on SAP S/4HANA Cloud:
- Finance Collection Blog (roadmap, quarterly release highlights, microlearnings) here
- openSAP Microlearnings for SAP S/4HANA for Finance and GRC here
- SAP S/4HANA Cloud Customer Community for Finance here
- SAP S/4HANA Cloud, public edition release info here
- SAP S/4HANA PSCC Digital Enablement Wheel here
- Early Release Webinar Series here
- Inside SAP S/4HANA Podcast here
- Best practices for SAP S/4HANA Cloud here
- SAP S/4HANA Cloud Community: here
- Feature Scope Description here
- What’s New here
- Help Portal Product Page here
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