Document Splitting and the Balance Sheet in SAP New GL

In all of our previous posts about the SAP New General Ledger, we've only looked at P&L accounts.  But what about the balance sheet? Using the New GL will eliminate either the accounts approach or the company code approach to IFRS compliance using SAP. A somewhat complicated feature is the use of document splitting, which we'll touch on next.

Let's suppose a vendor is paid with invoice line items charged to both generation and transmission on the same invoice, but with only one offset to the vendor account on the balance sheet. Using document splitting, the offset account charged to accounts payable is allocated or "split" between the generation and transmission lines. So, if $300 is charged to generation and $500 charged to transmission on the same invoice, the offset for the total of $800 is split to "follow" the P&L accounts that were charged originally.  By doing this split, separate balance sheets can be generated for each segment (i.e., generation and transmission) below the company code level. This will save time during document entry, as the preparer doesn't have to be affected by a process change. An employee in Accounts Payable doesn't change his SAP business process. Rather, in the background, SAP will split the transactions entered to create the separation by segment.

Document splitting can be a complicated undertaking and shouldn't be conducted without ample testing. In fact, a utility's New GL conversion scenario should consider the impact of document splitting when determining a migration data and activation date. Since most large utilities can have thousands of open items during a New GL migration, it is suggested—and we highly recommend—to set an activation date as close to the migration date as possible to limit the amount of documents (and line items) that will need to be split.