Overview

CO to FI reconciliation is one of the significant process improvements in SAP new GL. Cross
company code postings in Controlling ledger is the main cause of difference between FI ledger and CO
ledger. If users post cross company code in CO ledger, the corresponding legal effect (i.e. cross
company billing and accounting) of this transaction does not reflect in FI. Previously, users had to
process a job at month end to allow the system to reconcile the differences and post corresponding
entries in FI ledger. With new GL, this reconciliation and posting of entry in FI ledger occurs real time. We
will use a cross company allocation example to examine how new GL reconciles CO Ledger with FI
Ledger.

CO FI Ledger Reconciliation
When allocations are made within Controlling, they might post to two cost objects or two cost centres that belong
to different company codes. In legal terms, one company code has charged cost to another company code. Since
this allocation occurs in Controlling, the legal impact of cross company allocation is required to be reflected
in FINANCIAL Accounting.


Cross company code allocation in Controlling

With previous versions of SAP, business users are required to execute a period end job to reflect this posting
in FINANCIAL Accounting.
With new GL, SAP posts documents in FINANCIAL Accounting simultaneously with the cross company
allocation posting in Controlling. The obvious advantage of this is faster period end close because users do not
have to execute the period end job to reconcile the ledgers. New GL ensures integrity of data between the two
ledgers is maintained throughout.

CO FI Reconciliation postings in FI Ledgers
What am I demonstrating?
I will demonstrate how new GL handles COFI reconciliation. As an example, I will process a cross company code
cost centre allocation in Controlling. This posting should generate a real-time cross-company posting
in FINANCIAL Accounting.
Assumptions for this blog
One of the pre-requisites is that SAP new GL is active. It is not essential to have document splitting active; for the
purpose of this blog document splitting is active. All configuration steps documented in blog SAP delivered pre-
configuration for document splitting in SAP new GL are configured for the demonstration in this blog.
Profit Centre 1300 is assigned only to Company Code V001 and Profit Centre 5001 is assigned only to Company
Code V005.
I will demonstrate COFI Real-Time Integration for a cross-company code posting. The similar logic and
configuration step applies to cross profit centre, cross functional area, or any of the other new GL scenario.
For the purposes of demonstration, I will perform a cross-profit centre assessment. However, the logic and the
process described in this blog will work for all processes that post cross-company code eg. distribution, activity
allocation, manual repostings etc
SAP new GL design driving COFI Reconciliation
The below configuration has to be done to enable COFI reconciliation.
o Define Variants for Real-Time Integration
o Assign Variants for Real-Time Integration to Company Codes
o Define Account Determination for Real-Time Integration
o Define rules for selecting CO Line items
o Transfer CO Documents retrospectively

Define Variants for Real-Time Integration
Here we define parameters for Real-Time Integration.
o Select the indicator to activate Real-Time Integration
o Key Date: is the date from when the Integration is active. If you decide to put a date in the past, you can
execute Transfer CO documents retrospectively if no transfer was made previously. It is recommended that
you put the key date as the first date of the next fiscal period.
o Account determination: This will use the account determination rules, which you will configure in the next
step, to post the accounting entry in FINANCIAL Accounting. It is recommended that you always select this
indicator. If you do not select this indicator, and
o Post an allocation using a primary cost element, SAP will use that GL account to post back into FI.
o Post an allocation using a secondary cost element, SAP will not post an entry back into FI.
o Assign Document Type for COFI Reconciliation postings.
o Leave Ledger field blank. FI document will post to all ledgers.
o You could either select scenarios for which you want FI reconciliation documents to be posted; or use BAdI
to select scenarios; or define Rules to select scenarios. You can, for example, select all cross-profit
centre documents (within the same company code) to be posted back to FI as well.
o Avoid selecting transfer of all CO allocation Line Items or Trace this will impact performance of the
processes.
Variant for Real-Time Integration can be defined in IMG menu path
FINANCIAL Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of
Controlling with Financial Accounting > Define Variants for Real-Time Integration

Variants for real time integration CO FI

Assign Variants for Real-Time Integration to Company Codes
Variants for Real-Time Integration can be assigned by Company Code. Assign your variant to all Company codes
within the Controlling Area.
Assignment of Variant for Real-Time Integration can be defined in IMG menu path
FINANCIAL Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of
Controlling with Financial Accounting > Assign Variants for Real-Time Integration to Company Codes

Assign variants to company code

Account Determination for Real-Time Integration
There are two tables to be configured:
o Define Intercompany Clearing
o Define Account Determination for Real-Time Integration
Define Intercompany Clearing
This is generally configured as a part of general Finance configuration. There is no additional configuration
required here. When COFI Reconciliation posting is made in FINANCIAL Accounting, this table is used to
populate the Inter Company customer and Inter Company Vendor account.
You can check this configuration in IMG menu Path
FINANCIAL Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of
Controlling with Financial Accounting > Account Determination for Real-Time Integration > Define Intercompany
Clearing

Define cross company code posting parameters

Define Account Determination for Real-Time Integration
When COFI Reconciliation posting is made in FINANCIAL Accounting, this table is used to populate the COFI
Reconciliation clearing account.
You can define the COFI reconciliation GL account in IMG menu Path
FINANCIAL Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of
Controlling with Financial Accounting > Account Determination for Real-Time Integration > Define Intercompany
Clearing

Define account for automatic posting of CO FI reconciliation

Define rules for selecting CO Line items
You can define your own rules to determine which CO line items should be selected for transfer to FINANCIAL
Accounting. You assign this rule in the variant for COFI Reconciliation. Selection of checkboxes in the variant
is the standard way to activate the transfer; define rules only if you business process has special requirements
(eg. certain cross company code postings should not transfer back to Financial Accounting).

Transfer CO Documents retrospectively
You would only need to perform this if you activate COFI Reconciliation retrospectively in the variant definition for
Real-Time Integration.

Cross Company code Allocation in Controlling
I created a simple cross company allocation cycle to allocate IT costs from Cost Centre 1322 in Company Code
V001 to Cost Centre 5001 in Company Code V005.

Maintain CO assessment allocation cycle

Once the allocation is performed, the system posts an entry into Controlling as shown below.

CO document from assessment

Costs are allocated from Company Code V001 to Company Code V005. This is a charge of costs across legal
entities. Hence, the posting should reflect in the legal books as well.
With COFI Reconciliation active and the tables configuration as shown above, the system has posted a cross
company document in Financial Accounting as shown below.

FI document from CO assessment

The General Ledger view of the two documents in Company code V001 and V005 is shown below.


Conclusion
With new GL COFI Real-Time Integration functionality, users can now expect FI documents posted in real time
for all cross company code (or any of the new GL scenarios) allocations in CO. This eliminates the need to
perform period end job to transfer CO postings to FI and has greatly help reduce the period end processing time.

Please Share
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