Fiscal year and profit center for different countries

[former_member681006]

Dear Expert,

We are using SAP ECC 6.0

There is a airline company (ABC) who is having 7 subsidiaries company in different country, which they have made a company code in SAP.

Company Code:-

1. Bhutan (Jan-Dec.)

2. Bangladesh (Jan-Dec.)

3. India (Apr.-Mar.)

4. Nepal (Jan-Dec.)

5.Thailand (Jan-Dec.)

6.Singapore (Jan-Dec.)

7.Dubai (Jan-Dec.)

As we are using 1 COA for all company code and 1 Controlling Area. But fiscal year will be different for each company codes.

-For India company code it will be V3 and all other company code it will be K4.

QUES 1:- How we can we use fiscal year V3 for india company code and K4 for other company code parallely?

QUES 2:- Whai is the concept of parrallel currency? Will it be helpful and How? How it is to be configured?

QUES 3:- Which fiscal year is to be defined in Controlling Area?

QUES 4:- Which Currency Type and currency will be defined in Controlling Area?

QUES 5:- Does every company code can use same Profit Center? if yes, then what will be the benefit? If not, then what will be the implication? what will be the better option (to use one profit center or to define 7 profit center for every company code)?

Regards

[sanilbhandari]

Hello pv098741

Please find the responses below:

QUES 1:- How we can we use fiscal year V3 for india company code and K4 for other company code parallely?

You can use the concept of parallel ledgers in New GL in ECC or S/4HANA. Each ledger can have it's own fiscal year. The below blog should help you set up parallel ledger

https://blogs.sap.com/2018/04/04/ledgers-ledger-groups/

QUES 2:- Whai is the concept of parrallel currency? Will it be helpful and How? How it is to be configured?

In your case, i see two currency set up for every company code, (010) being the local currency and (030) being the Group Currency or the currency of the controlling area. The below blog explains the concept of currency type and the set up of parallel currencies in S/4HANA.

https://blogs.sap.com/2018/01/02/sap-s4hana-currency-setup/

QUES 3:- Which fiscal year is to be defined in Controlling Area?

The fiscal year for controlling area should be one in which your management would want to see reports for internal purposes in ideally. Off course it also depends on legal requirements. Ideally given that most of your countries have a calender year as Fiscal year, the controlling area optimally should have that as a fiscal year and for india set up a non leading ledger with fiscal year corresponding from April to March

QUES 4:- Which Currency Type and currency will be defined in Controlling Area?

Since you plan to use same COA and Controlling area across 11 countries, set up Controlling Area currency as Group Currency. if your management is interested in seeing internal reports in INR, than you should set up your controlling area currency as INR

QUES 5:- Does every company code can use same Profit Center? if yes, then what will be the benefit? If not, then what will be the implication? what will be the better option (to use one profit center or to define 7 profit center for every company code)?

All company codes can use the same profit center if the controlling area is same. However, if you do that you will loose one of the dimension or key characteristic for Financial reporting. I would not use a single profit center across all the countries. You should decide on set up for profit centers on depending on key parameters like Product Groups, Line of Business or may be other clusters. In case of airline industry i could even think of as revenue channels as well. You need to discuss this with your business on the reporting requirements

Thanks & regards

Sanil Bhandari

[former_member681006]

Dear Sir,

Thaks for your reply.

As you gave the answer of question 5:-

""All company codes can use the same profit center if the controlling area is same. However, if you do that you will loose one of the dimension or key characteristic for Financial reporting.""

So, which type of dimension or key characteristics you are taking about?

Regards,

[sanilbhandari]

Hello pv098741

The below is a screen shot of a standard report, which is used to draw trial balance at a company code and other dimensions such as PC or Segment. In one of my previous projects, a PC represented a manufacturing location and group of PC a country. So if you need financial reports or trial balance at that level and you create only one PC, you loose the capability to report. This is what I meant by PC being a key characteristic

In your case for eg, you may want to represent various airports as profit centers and if you want to derive financial statements, you create one PC, than you will not be able to do that.

Regards

Sanil