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Universal Allocation in SAP S/4HANA 2022

daigo_imai
Advisor
Advisor
‎2023 Jun 14 8:59 AM
19,306
(Created as of release SAP S/4HANA 2022)

This blog post provides you enhancement information on Universal Allocation based on SAP S/4HANA 2022 on-premise/private cloud edition. If you interested in Universal Allocation in SAP S/4HANA 1909, 2020 and 2021, please see SAP blog post (1909),  SAP blog post (2020), SAP blog post (2021). Now let’s focus on the harmonization of allocation functionality within SAP S/4HANA on-premise/private cloud edition and you will see how Universal Allocation impacting the area of Financial accounting and Management accounting.

From a planning perspective, a first step towards a single allocation model and execution framework was launched as Universal Allocation with SAP S/4HANA 1809 focusing on Cost center planning. Universal Allocation is new allocation functionality and plan data is stored in ACDOCP table.

With SAP S/4HANA 1909, Universal Allocation was enhanced. It is not only used to cover the Actual overhead allocations in addition to the Plan allocations use case that was already delivered with SAP S/4HANA 1809. The same Universal allocation is also the basis for molding and executing Top-down distribution of Margin analysis with SAP S/4HANA 1909 FPS01.

With SAP S/4HANA 2020, existing Fiori apps were enhanced with new features and new Fiori app “Allocation Flow” was released.

With SAP S/4HANA 2021, existing Fiori apps were enhanced with new features and new Fiori app “Manage Cycle Run Groups” was released. The same Universal allocation is also the basis for molding and executing Intercompany Allocation and Allocation to Margin Analysis.

With SAP S/4HANA 2022 FPS00, existing Fiori apps were enhanced with new features and new Fiori app “Manage Allocation Tags” was released.

Please note:

  • Universal Allocation does not cover all of the use cases mentioned in the “Vision” slides (“Our vision of Universal Allocation” and “Process harmonization driven by the Universal Journal”).

  • There is no new feature on Universal Allocation with SAP S/4HANA 2022 FPS01/FPS02.

    • Note: There is the closing solution called “SAP S/4HANA Cloud for Advanced Financial Closing (AFC)”, which can manage/monitor closing tasks for SAP S/4HANA. Even though AFC is not a part of S/4HANA core solution and charged as separate product, new template for Universal Allocation was introduced in Advanced Financial Closing at the timing of S/4HANA 2022 FPS02. To use new template for Universal Allocation, you need to have at least S/4HANA 2022 FPS02 as a prerequisite. There is one limitation, that all allocation types are supported in AFC except Top-down distribution.



  • So far SAP has been saying that “No future additions on Universal Allocation will be ported down to earlier S/4HANA release”.

    • However, SAP worked on downporting enhanced excel import template for definitions (“Receiver Basis” excel sheet is added into template for better handling of cycles based on receiver rule Variable portion). This new template can be ported down by SAP Note in coming weeks. (Once SAP Note is released, I'll update SAP Note number in here)





Before going into the details, let's have a look at motivation of Universal Allocation.

As you can see above slide, companies struggle to oversee their complex allocation process and have difficulties to analyze the result. It’s challenging to get a full traceability and clear understanding on how specific costs are allocated through their specific area of responsibility. As a result, there's a necessity for state-of-the-art visualization for both the allocation process as well as the results after the execution. In addition to the overall need for a process transparency and results traceability, today's companies need the ability to simulate how would the results look like by changing allocation rules on their financial data.


As you can see above slide regarding “Our Vision of Universal Allocation”, the overall aim is to simplify Allocations by combining various capabilities under one umbrella providing a single architecture for financial and managerial Allocations, like Cost center allocation, Profit center allocation, Top-down distribution, Intercompany allocation, Allocation to Margin Analysis and so on. A combined approach for actual and plan including simulation capabilities and predictive data as well. Executing this commonly structured Universal Allocation is to include all required reporting currencies providing full traceability of the entire value flow.

As you see right-hand side, Blue parts are in the scope of Universal Allocation (Yellow parts are out of scope). An important note to make is that Universal Allocation is not initially designed for activity allocations nor different types of settlements like for IO and WBS elements.


On the left-hand side, there are many transaction codes for different types of Allocations in SAP ECC. This caused the complexity of Allocation functionality. When we look at Vision of Universal Allocation, on the right-hand side we expect to see 10 Fiori apps to cover transaction codes in SAP ECC.

As of SAP S/4HANA 2022 FPS00, 6 Fiori apps are available.

  • Manage Allocation

  • Run Allocation

  • Allocation Results

  • Allocation Flow

  • Manage Cycle Run Groups

  • Manage Allocation Tags (New with SAP S/4HANA 2022 FPS00)


Additional application already identified for future development:

  • Import Allocation Data – Values (Planned with OP/PCE 2023)

    • This new Fiori app was first delivered with SAP S/4HANA Cloud 2302 and will be integral part of SAP S/4HANA 2023 (OP/PCE). This app would let user upload fixed values/rates and percentages into allocation cycles in similar way, like we can upload definitions at the moment. So you will be able to upload/update values for multiple cycles/segments at once. So by providing this app, we are closing functional gap for excel import functionality.





As you can see the above slide, it summarized Current Scope of Universal allocation in SAP S/4HANA 2022.

  • Cost Center allocation is enabled for both Actual and Plan data.

  • Profit Center allocation is enabled for both Actual and Plan data.

  • “Allocation to Margin Analysis” (Overhead allocation and Distribution to Margin Analysis) for both Actual and Plan data Top-Down Distribution for Actual data is enabled.



Currently cycles are defined with respect to a ledger and single company code*.

(* Please note: There are exceptions. Regarding Top-Down Distribution cycles, where it is defined by Ledger and Controlling Area (since you can use multiple company codes in definition of the cycles). Also Intercompany Allocations are defined with respect to multiple company codes (directly as company codes in the sender definition of each segment, indirectly through the receiver objects))

 

<Available Fiori Apps in SAP S/4HANA 2022 >


 With SAP S/4HANA 2022 FPS00, existing Fiori apps were enhanced with new features and new Fiori app “Manage Allocation Tags” was released.

Manage Allocations app:

  • Single point for maintenance of allocation cycles and segments

  • Initial screen provides list report of existing cycles for all authorized contexts (If user is authorized only for cost center allocation, other contexts are not available for user)

  • Multiple types of allocation rules manageable on segment level

  • Where used function available for multiple type of objects (Cost Centers, Profit Centers, Statistical Key Figures)

  • New selection field “Allocation Tags” was introduced with S/4HANA 2022 FPS00. Allocation tags assigned to allocation cycles that are used to group and identify the cycles.




Run Allocations app:

  • Single point for triggering allocation run

  • User can define Run worklist containing standalone cycles or cycle groups

  • Cycle groups can be defined in Manage Global Hierarchies Fiori Application

  • Order of cycles in worklist defines order of processing

  • The journal entry type can be selected for Live Run of Actual data in Profit Center context. For others, it is determined automatically

  • Reversal Run (Run type “Reversal”) can be triggered in Run Allocation app and logged in Allocation Result app. Due to specifics of Reversal Runs, there is only limited result report for such run jobs



Allocation Results app:

  • Provides analysis over the completed Allocation Runs/Test Runs

  • 2 user views:

    • By Run – list of completed run jobs and statuses, so as drill down to detailed run report

    • By Cycle - view of cycles run statuses for selected fiscal periods





Allocation Flow app:

  • Generic analytical app for displaying interaction between multiple object types in allocation process

  • App provide multiple perspectives (view types) on data

  • Key elements are Network graph control & T-Account control

  • Following view types available:

    • Cost Center

    • Profit Center

    • Direct Activity Allocation

    • Fund, Grant, Functional Area (Public Sector only)

    • Allocation Tag - New view type was introduced with S/4HANA 2022 FPS00

      • Note: Once you manage tagging in cycles/segments, with this “Allocation Tag” view type you can trace allocation flow cross context/type frontiers. Please see below <Allocation tag view example> screenshot, you have tagged allocations related overhead costs for logistics/distribution and you are able to trace it via multiple step allocation (firstly cost center to cost center allocation, then allocation form DC cost centers to profitability segments and in the end Top-down distribution to customer detail). If users learn to use this tool properly, they can achieve useful analytical insights into allocation costs flow in the organization.






<Allocation tag view example>



Manage Cycle Run Groups app:

  • Concurrent execution - The run groups allow to steer which cycles can be run concurrently by the users themselves, based on the data on which the cycles depend

  • Speeds-up allocation process during period close activities

  • Cycles organized in run groups determining processing mode

  • Cycles assigned in same run group must be processed sequentially. Cycles in different groups can be processed concurrently

  • Manage Cycle Run Groups app – for maintenance of Cycle Run Groups and so as for assignment of cycles into groups



Manage Allocation Tags app: (New Fiori app released with S/4HANA 2022 FPS00)

  • With this app, you can create, edit, and delete allocation tags

  • Allocation tags are semantic tags - you can assign to allocation cycles and segments that allow you to group and identify those cycles and segments

  • The tags can be used across allocation contexts and types, allowing you to track and label all elements of an allocation process

  • New selection field “Allocation Tags” was introduced in Manage Allocations app.

  • New view type “Allocation Tag” was introduced in Allocation Flow app to analyze flows via cost objects/profitability objects based on provided tagging.




<Recent Innovations>



For details, please see SAP Help for SAP S/4HANA 2022: What’s new: Universal Allocation at first.

The below is additional information for new features/functions.

Manage Allocation Tags Fiori app: (New Fiori app released with S/4HANA 2022 FPS00)

  • As mentioned above, this app can be used to create, edit, and delete allocation tags and then you can assign to allocation cycles and segments that allow you to group and identify those cycles and segments

  • See SAP Help: Manage Allocation Tags (Video is available)




New Features and Functions in Fiori Apps



Let’s have a look at some of new features/functions in below.

Cumulative cycle processing for the cost center allocation context






    • Cumulative cycle processing enabled in Cost center context within Manage Allocations when defining or editing allocation cycles

    • Check-box in cycle Process Indicators section

    • Once checked, allocated amounts will be balanced across periods

    • Cumulative processing can be used to clear any fluctuations in the receiver tracing factors or sender amounts you want to allocate

    • The sender amounts up until the current period are allocated to each receiver based on the tracing factor

    • See SAP Help: Cumulative, Processing Indicators




 


Incremental cycle processing for the top-down distribution allocation type






    • Incremental processing enabled in the top-down distribution allocation type

    • Check-box in cycle Process Indicators section

    • Once checked, allocation cycle can be run multiple times during a period and capture incremental changes to data in your senders

    • This has positive implications for situations, where users struggle with enormous amount of data for processing during period close.

    • See SAP Help: Incremental, Processing Indicators




 


Note field in Run Allocations






    • You can add a note using this field when you run an allocation

    • The note is then displayed in the results of the run (Allocation Result app)






<Situation Handling>



Cross Component Functionality so called Situation Handling is available in Universal allocation from SAP S/4HANA 1909 on-premise. As of now, Situation Framework notifies user if error/warning occurs.


For details, please see SAP Help for SAP S/4HANA 2022:

 

<Additional Information>


SAP Help for SAP S/4HANA 2022:

SAP Fiori Apps:

  • Manage Allocations (App ID: F3338)

  • Run Allocations (App ID: F3548)

  • Allocation Results (App ID: F4363)

  • Allocation Flow (App ID: F4022)

  • Manage Cycle Run Groups (App ID: F4935)

  • Manage Allocation Tags (App ID: F4523)


SAP Best Practices for SAP S/4HANA (on-premise/PCE):

  • Universal Allocation (‏2QL‏)

  • Overhead Cost Accounting (‏J54‏)


SAP Notes (relevant for SAP S/4HANA 2022):

  • 3264926 – F3338 – Cost Element in Overhead Allocation Account

  • 3233837 – F3338 TDD Reference mapping group causes error

  • 3284210 – F3338 Derivation rules (Functional Area) for Margin Analysis context

  • 3255699 – F3338 Import Rec. Weighting factors as integers

  • 3233744 – F3338: It is not possible to create cycle with numerical planning category

  • 3287540 – F3338 – Excel Template – Add Statistical Key Figure Group

  • 3270467 – F3338 Import Receiver Weighting factors as integer

  • 3248320 – Manage Allocations: Navigation to the app does not work correctly

  • 3329661 – F3338 Add descriptions (text) to combinations

  • 3324481 – Manage Allocations: Excel uploads additional phonetic texts

  • 3294475 – Manage Alocations: Extended DCL for Excel Upload

  • 3194675 – Important notes for Universal Allocation in OP 2020

  • 3282267 – Manage Allocations: No combinations are build for Key Field with Group value

  • 3232842 – Manage Allocations: Elements are not saved

  • 3264604 – Manage Allocations: Misleading error message with Receiver Weighting Factors is　raised during Save process

  • 3266713 – Manage Allocations: Enable GL accounts of type “N” in Receiver Basis

  • 3282572 – Manage Allocations: Extended Authority Check for File Upload

  • 3296306 – Manage Allocations: Improper authority check for Cost Center – KOSTL field

  • 3281190 – Universal Allocations: enable Scale Negative Factor code 7 (Positive Tracing Factors to Zero) in Receiver Basis

  • 3332928 – Manage Allocations: The user is unable to edit old cycles with Receiver Weighting Factors due to the issue of decimals (089)

  • 3308648 – Universal Allocation – error GU142 in cycle check

  • 3282986 – Universal Allocation: Cycle check confuses fields for segments

  • 3247811 – Manage Allocations: No combinations are visible after upload of Cycle with Group Values

  • 3245002 – Manage Allocations: Incorrect calculations of Receivers in Receiver Weighting Factor

  • 3321169 – Universal Allocation – dump/numerical overflow in checking sender percentages

  • 3238043 – Manage Allocations Excel Import: Extended Overhead Allocation Account validations fix and Field Base of Unit incorrectly mapped to Account Number

  • 3270758 – F3548 – An Exception was raised

  • 3291141 – F3548 Company Code authorization check for TDD

  • 3283237 – F3548 Run Allocations – Incorrect message type for empty set

  • 3303101 – F3548 Distribution cycles cannot be executed due to incorrect fiscal year period determination

  • 3334577 – Run Allocations – Posting authorizations fix for ledger

  • 3298296 – Run Allocations: Suppres backend dialogs during run trigger

  • 3334714 – Run Allocations: Company code authorization check for intercompany allocation

  • 3302626 – Universal Allocation: Incorrect reversal document type

  • 3273486 – Universal Allocation: Provide longtext for message FINS_ONE_ALLOCATION075

  • 3261776 – Universal Allocation: skip segment check when profit center reorg active

  • 3323556 – Universal Allocations – substitution of Functional Area

  • 3259431 – Run Allocations – Performance issues with many Senders/Receivers

  • 3226625 – Universal Allocation: Set default production month if enabled in JV accounting

  • 3324736 – F4523 – Duplicated Cycle in Adapt Filters

  • 3216317 – Universal Allocation - Enable Custom fields for silent inheritance from sender to receiver


Current Limitations:

Universal allocation is under development and currently does not support:

  • Allocation to IO (Internal orders as a receiver)

  • Allocation from/to Functional Area

  • Intra-company allocation in Intercompany cycles

  • Custom fields are still not yet fully supported (but only partly supported. Namely Margin Analysis extensibility - Allocation to custom fields on receiver side enabled)

  • Cycles are defined with respect to ledger and single company code (Note: Top-Down Distribution is exception, since instead of company code, there is controlling area as part of cycle definition. Intercompany Allocation is another exception, since it is defined with respect to multiple company codes)

  • Extension ledgers are not supported (Standard ledgers only) at the moment in Universal Allocation (Extension ledger can not be selected for cycle definition, nor for processing) and it is scope for future development


 

Finally, I would like to thank experts at SAP for their support.

Brought to you by the S/4HANA RIG
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