Best Practices for R/3

Financial and CO-PA

Reporting

Quentin Hurst
Virtuoso
What We’ll Cover …

Objective: Provide best practices you can implement at home to

get the most out of your R/3 Financials investment and reports

• Looking at R/3 Financials reporting overview

• Getting the most out of FI/CO
• Leveraging CO-PA best practices
What We’ll Cover …

• Looking at R/3 Financials reporting overview

• Getting the most out of FI/CO
• Leveraging CO-PA best practices
R/3 Financials Reporting Overview

• Now more than ever, financial reporting is at the

forefront of an organization’s reporting needs
 Greater visibility to their data (more/better reports)
 Verification that existing reports are timely and accurate
• Driven by such factors as
 Stock market collapse
 New legislation – Sarbanes-Oxley
Building Block
 New board of directors
R/3 Financials Reporting Overview (cont.)

• This places new requirements on financial reporting

teams
 Must think outside the box
 Use new and different reporting tools
 Ensure that documented reporting standards exist and
are followed
 Need additional knowledge on new tools and best
practices
 Increased interaction and pressure from upper
management
For a historical perspective on our current and future economic and
regulatory environment, read Manias, Panics, and Crashes: A History Of
Financial Crisis by Charles P. Kindleberger
R/3 Financials Reporting Overview
Top 5 Pitfalls for R/3 Financial Reporting Tools

1. Not knowing all of the reporting options in R/3

 When all you have is a hammer, everything looks like a
nail
2. Not knowing which tool to use for which report
3. Lack of report performance optimization
techniques
4. Not making advanced configuration settings,
which limits the reporting options
GOTCHA!
5. Bad design decisions in the reporting submodules,
which negatively impact reporting options
R/3 Financials Reporting Overview
FI/CO Reporting Universe

Painter/
Writer

Drill-down Cash
Management

Reporting
CO-PA
submodules

SAP Special
Purpose Ledger
Query
R/3 Financials Reporting Overview
Picking the Right Tool

1. Is a canned report available?

2. Can I make a config. change to use a canned report?
3. Can I use drill-down reporting?
4. Can I make a config. change to use drill-down reports?
5. Can I use Painter/Writer?
Report request 6. Can I make a config. change to use Painter/Writer?

no no no no no no no no no no
1 2 3 4 5 6 7 8 9 10 11

Canned Painter/ Reporting SAP

Drill-down ABAP
report Writer submodules Query
R/3 Financials Reporting Overview
Picking the Right Tool (cont.)

7. Can I use a submodule (CO-PA, SPL, Cash Mgmt.)?

8. Can I make a config. change to use a submodule?
9. Can I use SAP Query?
10. Can I make a config. change to use SAP Query?
11. Can I write the report in ABAP?
Report request

no no no no no no no no no no
1 2 3 4 5 6 7 8 9 10 11

Canned Painter/ Reporting SAP

Drill-down ABAP
report Writer submodules Query
R/3 Financials Reporting Overview
Picking The Right Tool – Don’t Forget Periodicity

Accounting Non-accounting
period period
Painter/Writer Standard Table X

Painter/Writer LIS/SIS structure X

CO-PA X*
Drill-Down X

SAP Query X*

Cash Management X

Special Purpose Ledger X**

R/3 Financials Reporting Overview
In This Session, You’ll Learn...

• Key reporting tools (and submodules) you should be

using
• How to get the most out of these reporting
tools/modules
• How to alleviate common performance problems
• Tips for maximizing your reporting options when
configuring the reporting submodules
• Advanced configuration techniques that will enable
additional reporting functionality (in Appendix B on
the CD)
What We’ll Cover …

• Looking at R/3 Financials reporting overview

• Getting the most out of FI/CO
• Leveraging CO-PA best practices
Getting the Most from R/3 FI/CO

• Explore R/3 drill-down reporting

• Discover the Special Purpose Ledger
• Start using R/3 Cash Management!
• Consider implementing CO-PA
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting

• Powerful, flexible tool that draws data from InfoCubes

 Enables reporting on multiple characteristics at once
 Users can slice and dice data
 A single report can fulfill multiple report requests
 Originally built for CO-PA, but now also usable for other
FI/CO areas
 Foundational technology for BW reporting

See Appendix B for more on how to use this tool for PCA/Costing
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting (cont.)

• Powerful, flexible tool that draws data from InfoCubes

(cont.)
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting (cont.)

• Where can I use it?

 General Ledger (G/L)
 Accounts Payable (A/P)
 Accounts Receivable (A/R)
 Profit Center Accounting (EC-PCA)
 Treasury (TR)
 Enterprise Controlling Consolidations (EC-CS)
 Controlling-Profitability Analysis (CO-PA)
 Project Systems
 Product Costing
 Special Purpose Ledger
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting (cont.)

• There is no single place to access drill-down reporting

 You must go to the specific application area you want to do
drill-down reporting on

See the handout on drill-down reporting for transaction code

characteristics and value fields for each area
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting – Output Types
• In 4.6C, there are new output types that you can use
 Standard drill-down layout
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting – Output Types (cont.)

 New layout options

Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting – Output Types (cont.)

Graphical output
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting – Output Types (cont.)

ALV output
 Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting – Output Types (cont.)

You can give your users the option of selecting which output
Tip type to use when executing the report
Getting the Most from R/3 FI/CO
Tips for Drill-Down Reporting

• Don’t include too many characteristics in your report

 Hinders performance
 A good rule of thumb is to limit characteristics to six or less
• Use report-to-report interface to link to other reports
 Line item report for reconciliation
 Other drill-down reports that have additional characteristics
 Other SAP report types that are useful for your report
• Use frozen data for reports that take a long time to run
 See Appendix A for details!
• Use mass print settings when you need hard copies
Getting the Most from R/3 FI/CO
Explore R/3 Drill-Down Reporting (cont.)

Creating and
using drill-
down
reports
Getting the Most from R/3 FI/CO
Discover the Special Purpose Ledger

• The Special Purpose Ledger is a user-defined,

flexible ledger
 Captures only what you want, for the activities you want, in
the time frame you want
 In very general terms, SPL can be thought of as the CO-PA
of FI
• What can I do with an SPL?
 An SPL can update based on any activity
 You can pick up FI accounts as well as cost elements
 You can set up a series of ledgers that roll-up into one
another for consolidated reporting

R/3 Profit Center Accounting is actually a Special Purpose Ledger!

Getting the Most from R/3 FI/CO
When is the SPL a Good Fit?

• The SPL is particularly good when you need to:

 Report off of a different fiscal year variant
 Report off of a different organizational structure
 Report on a different accounting basis (cash basis)
 Combine data from different parts of the system that
aren’t normally available in a single transaction or
reporting tool
 Consolidate data that falls outside of EC-CS or SEM
Consolidations
 Stage data for export to an external consolidation tool
 Report off a subset of system activities
 Handle complex foreign currency reporting issues
Getting the Most from R/3 FI/CO
Special Purpose Ledger – Best Practices

• Include all currencies you need when defining the

ledger
 It is hard to add them later! At a minimum, include transaction
currency and local currency
• Research how your data flows before trying to set up an
SPL
 Make sure you identify all of the activity types that you need to
map
• Use user exits in movement types
 To capture all of the characteristic data you need
 You will also have to maintain integrated master data via
transaction code GCS1
Getting the Most from R/3 FI/CO
Special Purpose Ledger – Best Practices (cont.)

• Use Painter/Writer and drill-down to create SPL reports

 Your SPL totals table is available as a reporting table in
Painter/Writer
 Use transaction code GCRE1 to activate drill-down reporting
for your SPL
 You will also have to maintain integrated master data via
transaction code GCS1

See also: “How to Tap into the Power of the Special

Purpose Ledger” – Quentin Hurst
Note
Getting the Most from R/3 FI/CO
Start Using R/3 Cash Management

• What is Cash Management?

 Submodule within Treasury
 Used to report short-term and medium-term cash
position and forecast
• Key Cash Management features you should use
 Electronic bank statement
 Lockbox processing
 The Cash Management Position (CMP) report
 The Liquidity Forecast (LF) report

We’ll cover the CMP and LF reports since they’re particularly

Note important!
Getting the Most from R/3 FI/CO
What Is the CMP Report?

• Used to forecast cash position in the short-term

 Based on banking transactions entered in R/3
 Looks at actual cash transactions only
 Great tool to help manage float – timing differences of
when different deposits, outgoing checks, wires, etc.,
clear the bank

T code
FF7A
Getting the Most from R/3 FI/CO
What Is the LF Report?

• Used to forecast liquidity position over short/medium term

 Forecasts future obligations and receipts
 Based on business transactions entered in R/3
 Includes transactions to “convert” outgoing/incoming documents
to cash
Purchase orders, A/P invoices
Sales orders, A/R invoices
Getting the Most from R/3 FI/CO
What Is the LF Report? (cont.)

T code
FF7B
Getting the Most from R/3 FI/CO
Cash Management Best Practices

• The CMP and LF can be combined

 You can merge the two reports together to get a
consolidated picture of your cash and liquidity positions
 Provides the optimum view of short-term cash position
and forecasted cash position
• Use a proper bank account G/L structure
• Set up the appropriate number of planning groups
 You can always combine
• Key to a good CMP is value dating timely
transaction entry
What We’ll Cover …

• Looking at R/3 Financials reporting overview

• Getting the most out of FI/CO
• Leveraging CO-PA best practices
Leveraging CO-PA Best Practices
Consider Implementing CO-PA

• Why Implement CO-PA?

 R/3 module for tracking and analyzing profitability
 Helps you understand where your profits come from
 Captures revenue and cost of goods sold conditions from
Sales and Distribution (SD)
 Can also capture variances and assessments
 Materials Manager (MM) variances, Production Planning (PP)
variances, CO assessments, and FI journal entry activity
• Gives you the information you need to make strategic
decisions
 Which are the most profitable customers?
 What product lines give me maximum contribution margin?
Leveraging CO-PA Best Practices
Top CO-PA Pitfalls

• Poor report performance

• Bad design decisions limits what data you can
report on
• Inconsistent value for the same key figure on
different reports
• Difficult or erroneous reconciliation

GOTCHA!
Leveraging CO-PA Best Practices
Getting the Most from CO-PA

1. Choose value fields strategically

2. Ensure consistency with key figure schemes
3. Boost performance with summarization levels
4. Hasten runtimes with report splitting and Report/Report
Interface (RRI)
5. Reconciliation tools

In the Appendix on the CD, there are five more CO-PA

best practices!
Leveraging CO-PA Best Practices
Strategically Choose Your Value Fields

• Many teams skimp on the number of value fields they

set up
 Example: setting up a single field called “Net Revenue”
instead of the components as separate fields
• R/3 won’t allow you to break the data out later
 It’s indivisible once it’s posted
 As time goes on, you will be asked to break out Net
Revenue to its individual components for analysis
Leveraging CO-PA Best Practices
Strategically Choose Your Value Fields (cont.)

• Break potentially useful conditions into their own fields

 Even if you don’t have a current requirement to justify the
field, in the future someone will probably ask
 You can always add value fields together when detail isn’t
needed
Leveraging CO-PA Best Practices
Ensure Consistency with Key Figure Schemes

• Key figure schemes are groupings of value fields

 You set them up once and use them across your reports
 Ensures line items have the same definition across
reports
Net revenue, total cost of goods sold, etc.
 When creating your report forms, you have the option of
using value fields or key figures
Leveraging CO-PA Best Practices
Ensure Consistency with Key Figure Schemes (cont.)
• Set up key figure schemes via transaction KER1
Leveraging CO-PA Best Practices
Ensure Consistency with Key Figure Schemes (cont.)
Leveraging CO-PA Best Practices
Ensure Consistency with Key Figure Schemes (cont.)
• How to use them in reports
 When creating the report form, you will be prompted on
whether to use characteristics, value fields with
characteristics, or a key figure scheme
Leveraging CO-PA Best Practices
Boost Performance with Summarization Levels

• Summarization levels speed up report runtimes

 You define summary levels (tables) and specify an
update frequency
 R/3 generates, loads, and updates the summary tables
 When designing reports, you tell R/3 to use the
summarized data
 R/3 fills in any missing data from original table (new with
4.5!)
• The best tool for maximizing CO-PA report
performance!
Leveraging CO-PA Best Practices
Boost Performance with Summarization Levels (cont.)

• Summarization levels speed up report runtimes

SL

First
SL SL

Report R/3

If no
ne fo
und
CE3
Leveraging CO-PA Best Practices
Boost Performance with Summarization Levels (cont.)

• How to set them up

1. Define summarization levels using transaction code
KEDV
2. Then tell R/3 to load the level by executing report
RKETRERU
 Transaction code KEDU
3. Schedule report RKETRERU to periodically run to
update your levels
 Create variant in KEDU, then schedule a batch job
to run off of that variant
Leveraging CO-PA Best Practices
Boost Performance with Summarization Levels (cont.)

Tcode
KEDV
Leveraging CO-PA Best Practices
Boost Performance with Summarization Levels (cont.)

• Keys to success
 Choose a frequent update strategy to get the most boost –
normally a nightly update strategy is used
 Set up and transport your levels from your Gold/CTS client
 Include dependent characteristics in summarization levels
 Don’t define too many summarization levels (8-20 suffice)
 Avoid “redundant” summarization levels
 Make sure to periodically delete unused summarization
levels
 Use the delivered summarization level tools
You can also use the summary tables created by summarization
Tip levels to hasten custom ABAP reports
Leveraging CO-PA Best Practices
Hasten Runtime with Splitting and RRI

• Report splitting and report/report interface

 Both improve performance
 Break one report into multiple reports
 Useful with large number of characteristics or high data
volume
• What’s the difference?
 Report splitting – one report automatically calls the other
 RRI – from the first report list you use, manually navigate
to the lower-level report using a menu path
Splitting
RRI

Original slow report Faster runtime: 2 smaller reports;

one calls the other when needed
Leveraging CO-PA Best Practices
Hasten Runtime with Splitting and RRI (cont.)
• How to split reports
 Use transaction code KE3L
Leveraging CO-PA Best Practices
Hasten Runtime with Splitting and RRI (cont.)
• How to set up a report/report interface
 For drill-down reporting, go to the Options tab in either
the create or change mode and click on the Report
assignment button
Leveraging CO-PA Best Practices
Hasten Runtime with Splitting and RRI (cont.)

• When to use splitting

 Reports that use a lot of characteristics or
characteristics that have a lot of values – performance
becomes an issue
Users typically do the same drill-down, e.g., company
code, then product line, then customer
• When to use RRI
 When you want to link different types of reports, such as
ABAP programs to Painter reports or SAP queries to
drill-down reports
 Users don’t use a single drill-down approach, so splitting
isn’t a viable option

When splitting a report, users are limited to specific drill-downs

Leveraging CO-PA Best Practices
Reconciliation Tools

• Standard delivered CO-PA reconciliation report in R/3 4.5+

 Name was derived from its transaction code KEAT
 Tries to reconcile FI, PCA, SD, and CO-PA at an SD
condition/account level
 Provides a quick overview of any discrepancies
 Offers drill-back functionality for out-of-balance entries
Leveraging CO-PA Best Practices
Reconciliation Tools – KEAT

T code
KEAT
Leveraging CO-PA Best Practices
Ease Reconciliation with KEAT

• Unfortunately, KEAT has some drawbacks

 Not completely reliable, especially in make-to-order
environments
 FI initiated updates aren’t tracked well or consistently
 Report output isn’t customizable
• The verdict:
 Use as a quick check to identify errors
If KEAT shows an error, generally it is an error
Doesn’t always show all errors
 Still need a more reliable reconciliation tool for detailed
reconciliations
Leveraging CO-PA Best Practices
Set up COS for Easier Reconciliation

• What is Cost of Sale (COS) reconciliation?

 Simply stated, it is the creation of a COS cost element in
CO, coupled with the necessary configuration to force a
CO-PA segment update during any COS activity
 The solution provides
Dual update into CO-PA – delivery and billing
A separate value field for each update
 A low-data alternative to setting up account-based CO-
PA
Leveraging CO-PA Best Practices
More Best Practices in the Appendix!

1. Benefit from R/3’s frozen data feature

2. Boost performance with summarization data
3. Use realignments for mass changes
4. Leverage line item reports
5. Start using characteristic hierarchies
Resources

• Dig into your system...

• On CO-PA or financial reporting: help.sap.com
• The R/3 Reporting Made Easy Guidebook
• Configuring SAP R/3 FI/CO, by Quentin Hurst and
David Nowak – Sybex 2000
• On your CD
 Drill-down reporting handout
 Appendix A: More CO-PA best practices
 Appendix B: Using Drill-Down for PCA and Product
Costing!
7 Key Points to Take Home

• Drill-down reporting isn’t just for CO-PA anymore

• Search for the node “information system” in the IMG
 You may be surprised at the tools you will find
• There are report optimization techniques in CO-PA
that aren’t available to other reporting tools
• There are specific reasons why you would use a
Special Purpose Ledger
7 Key Points to Take Home! (cont.)

• SAP Query has been given a bad wrap – give it a try

• Cash Management Position and Liquidity Forecast
are two strategic reporting tools that are often
overlooked
• Don’t forget the Appendices
Your Turn!

Questions?

How to Contact Me:

qahurst@virtuosollc.com