Issue

In Syensqo's current ECC systems, many companies are created as company codes in the system irrespective of whether the company code is operational or not. This added to the complexity of configuring the system and month-end / year-end closures.

Recommendation

Based on the analysis is recommended to go with Option B: Create Company for all the entities and company code only for the operational entities. This will keep the core system much cleaner with an opportunity to configure more company codes / convert non-operational entities into operational entities in future.

Background & Context

A company is a structure within S4 HANA used to identify intercompany relationships and facilitate legal and management consolidation within the consolidations system and a company code is an organisational unit used in financial accounting representing an organisation’s independent legal entity. In Syensqo current systems, all companies are set up as company codes in the ECC system, regardless of whether they are operational or not. This approach has led to increased complexity in system configuration and has made month-end and year-end closures more challenging. The presence of non-operational company codes adds unnecessary layers to financial processes, complicating the overall system management and potentially leading to inefficiencies during critical financial reporting periods.

Assumptions

None at this point

Constraints

None at this point

Impacts

Following are the impacts

Data Conversion and migration: Data from the As-Is systems need to be mapped based on the proposed Company code Structure

Downstream System: There will be an impact on all the downstream systems that use Company code and there should be a one-time remediation or mapping exercise that should be undertaken

Business Rules

Please refer to the Business Rules in the below section.

Options considered

Following are the options proposed for the issue

Option A: Follow the As-Is Structure i.e. Create company and company code for all the entities

As a part of this option the company and company code is created for all the entities that are in scope of consolidation

Option B: Create Company for all the entities and company code only for the operational entities

As part of this option, company code is created only for the operational entities

Evaluation

	Option A: Follow the As-Is Structure i.e. Create company and company code for all the entities	Option B: Create Company for all the entities and company code only for the operational entities
System Complexity	Con: System configuration is complex. Any new entity even non-operational will have to configured as a company code.	Pro: Cleaner system as only the operational entities are in the system
Period end closure	Con: Multiple entities are considered in the PEC activities though not required	Pro: Only the required entities are considered for PEC
Future compatibility	Con: Once the company code is created and needs to be converted into an operational entity, the company code attributes ex: currency etc.. cannot be changed once any transaction is posted	Pro: The company code will be created as an operational entity only when required and therefore the attributes also can be configured at that point in time

See also

Change log

Workflow history