Is it time to move to New GL?
SAP introduced New General Ledger functionality with the Enterprise release (ECC 5). The SAP FI/CO components for Classic General Ledger, COS Ledger, Reconciliation Ledger, Special Purpose Ledger and Profit Center Accounting have been merged to provide an integrated solution known as New GL. New GL provides document splitting functionality that enables generation of financial statements for Segments (As per IAS 14 Accounting Standard, segment reporting is a legal reporting requirement for specific business or geographical segments). New GL supports multiple ledgers, hence, reducing the need to rely on Special Purpose Ledgers for parallel valuation. New GL facilitates real time FI-CO Integration resulting in real-time legal and management reporting. An integrated solution like New GL ensures better SOX compliance and Fast Period End Close resulting in reduced TCO.
Classic GL has been around for years; we understand it and are so comfortable using it. New GL sounds like a bag full of goodies, but we may need to understand New GL features completely before we can implement it. Implementation New GL would also have a change management impact. So is it time as yet to move away from classic GL?
Reasons for upgrading to New GL may not be justified if we are planning to use limited functionalities of New GL. I am documenting some of the other reasons that build a strong case for upgrading from Classic to New GL.
(1) Reduced Total Cost of Ownership (TCO) with New GL
New GL provides real time integration between various Financial and management functionalities. It eliminates execution of reconciliation ledger and reconciliation across FI/CO sub-modules resulting in fast close and reduced TCO.
(2) Future enhancements only for New GL
SAP will continue to support classic GL till the planned phase out of SAP 4.7, but support packs and future enhancements will be released for New GL only.
(3) Legal Compliance with New GL
New GL provides system solution for legal requirements relating to segment reporting and a phased movement from US GAAP to IFRS. Among other things, Integration and transaction flow across GL, CCA, PCA sub-modules also improve SOX compliance.
(4) New GL is inevitable
It is not very clear at this point in time if classic GL will be supported after maintenance support for SAP 4.7 comes to an end. If SAP decides to support classic GL, it may result in an increased maintenance fees. New GL is inevitable and on a product roadmap is the successor to classic GL. We can be either proactive and implement it now or wait till it becomes a necessity.