Planning Investment Projects and Depreciations with Integrated Financial Planning for SAP Analytics Cloud

[hartmut_koerner]

Introduction

Integrated Financial Planning is a comprehensive content package for SAP Analytics Cloud that covers planning of operating expenses, of product costs, of sales and profitability, of CAPEX, and of financial statement. With the CAPEX module, capital expenses are planned on an aggregated level, not on single investment projects. Therefore, depreciations only can be taken into account on a global level but not forecasted from the single investment projects.

In this blog post I want to show how this content package can be extended with an investment project planning and a depreciation forecast. The proposed solution does not reinvent the wheel but simply puts existing puzzle pieces together by combining the Integrated Financial Planning content with the existing depreciation forecast in S/4HANA and the transfer programs that bridge between the new SAC based and the classical planning.

Architecture and Solution Idea

1. Create investment projects in SAP S/4HANA


2. Plan expenses for the investment projects in SAP Analytics Cloud


3. Write back WBS plan data to SAP S/4HANA via ACDOCP into the classical planning table (COSP_BAK)


4. Run depreciation forecast on those plan data and include the already capitalized assets. Result is posted into the classic cost center planning (table COSP_BAK)


5. Import resulting depreciations on cost centers via ACDOCP into SAC and combine them with the other cost center expense planning

Solution in Detail

Step 1: Define an investment project and its WBS elements in SAP S/4HANA

• In the project builder in SAP S/4HANA (transaction CJ20N) define an investment project and assign an investment profile. The investment profile determines other relevant parameters like asset class and the depreciation settings.


• Create WBS elements and maintain their depreciation simulation data: Capitalization date, useful life, depreciation key and assigned cost center


• The depreciation parameters can be maintained under Edit -> WBS element -> Investments programs -> Depreciation simulation data:

Step 2: Plan investment costs on WBS element in SAP Analytics Cloud

You can use the story Project Expense Planning (SAP_FI_IFP_IM_OPEX_ProjExpenses) for this purpose. In this example, I plan costs of overall 120.000 EUR for a project:

 

Step 3: Transfer WBS plan to ACDOCP and classical planning

• Export the WBS plan data to SAP S/4HANA into table ACDOCP. Please look at the documentation how to configure this write-back


• Run transfer program R_FINS_PLAN_TRANS_CO_S4H_2_ERP to move the WBS plan data from table ACDOCP to the classical planning. For details see here and also the program documentation


• You can check the result in transaction CJR2 (Cost element planning for WBS elements😞

Step 4: Run Depreciation Forecast

Run depreciation forecast (Transaction AR13, Program RAKOPL02). The depreciation forecast can include both capitalized assets and planned capital investments. It is important to include both because otherwise a part of the planned depreciations will be missing.

• Check Select assets and filter on the respective capitalized assets (not used in the example here)


• In section Planned capital investments check Select WBS Elements and filter on the respective projects or WBS elements


• In section Settings choose your depreciation area


• In section Planning periods set the year that you want to do the forecast for


• In section Further settings for planning set the plan version and check Activity-type independent planning and Planning on cost centers

You can check the result in the planning report (transaction KSBL) or in the cost center planning itself (transaction KP06):

In the screenshot in step 1 we see that the total amount of 120.000 EUR is depreciated linearly over 10 years (i.e. 1.000 EUR in each period) starting from May 2023 and the depreciation is assigned to cost center LN02_CTR_1. The depreciation account (here: 481000) is determined in the customizing via the account determination of the asset class and the account assignment to the depreciation area.

Step 5: Transfer Depreciations on Cost Centers to ACDOCP and SAC

• Run transfer program R_FINS_PLAN_TRANS_CO_ERP_2_S4H to move the depreciations on the cost centers to table ACDOCP. For details see here and also the program documentation


• Import the cost center plan data from ACDOCP into SAP Analytics Cloud. Please look at the documentation how to configure this import


• You can check the result in the story Cost Center Expense Planning (SAP_FI_IFP_IM_OPEX_CCtrExpenses):

Conclusion

Depreciation forecast is an essential functionality for an integrated financial planning solution. Only with the right depreciation values on the production cost centers, the activity cost rates can be calculated properly. This blog post shows how the existing depreciation forecast functionality in SAP S/4HANA can be combined with the Integrated Financial Planning for SAP S/4HANA content in SAP Analytics Cloud to reach this goal.

For additional information, please see the following references:

Integrated Financial Planning - An Overview

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Find all Q&A about SAP Analytics Cloud and feel free to ask your own question

 

 

 

[glenn-chamuel]

Hartmut,

Thank you for a very well written post, as it addresses a pressing open area within the best practices content.

We implemented Integrated Financial Planning for a client recently and used an approach very similar to what you've proposed above. It is a great component to an overall solution, that needs to also meet these following typical and expected scenarios:

• planned early retirement or disposal of capital assets


• planning for assets and their depreciation for projects not yet existing in S/4


• synchronizing between S/4 and SAC to prevent double-counting between existing and planned assets and their depreciation

While we were able to accommodate these additional scenarios, it required some end-user manual processes and maintenance, that we wish we could have automated.  Automation could be possible once additional views are created and/or made available from S/4 for SAC to consume, unless SAP has suggestions in these areas now.

Keep up the great work! We always appreciate learning from SAP's examples and how to best leverage S/4 as it evolves, through the use of Integrated Financial Planning and the Rapid FP&A Suite content.

- Glenn Chamuel

[rachugh]

Hartmut

 

Amazing article and this is what we are doing for our business but facing 1 challenge and could not find any solution.

We are looking for a program or API to transfer the numbers from ACDOCP to Real Estate tables. Is there any existing API or program we can use?

[hartmut_koerner]

Hi Ravi,

as far as I know there is no such program delivered from SAP.

Best regards

Hartmut

[glenn-chamuel]

UPDATE:  Universal Parallel Accounting contains some helpful updates in this area that is worthy of further exploration.

[dennis_freese]

Dear Mr. Koerner,

we're currently checking on the SAC investment planning. Is it possible to execute step 1 "Define an investment project and its WBS elements in SAP S/4HANA" triggered by the SAC? Especially by creating the project definition and WBS elements out of the SAC?

We'd love to keep the "planners" in one system (SAC) and only submit investment measures from the SAC e.g. by calling an API.

Kind regards,
Dennis

[hartmut_koerner]

Hi Dennis,

unfortunately it is not possible to create a project and WBS elements within the investment planning content.

But as part of your own implementation this might be possible: If there is an OData service available (or custom created) to create these objects in S/4HANA you could call this from your custom Analytical App in SAC.

Best regards
Hartmut

[dennis_freese]

Dear Hartmut,

thanks for the immediate answer.

For the planning we will work in the SAC with a dimension similar to the PS structures. After release we will then transfer this into a project structure via oData Call into the backend. So I was just hoping for a reference to an SAP standard oData or API or at least some practical experiences. 🙂

Kind regards, Dennis

[erno_n]

Hi Dennis, I don't have any practical experience with this but have you had a look at this Project API: https://api.sap.com/api/OP_API_PROJECT_V3_0001/overview.

Also we struggled with the solution for planning on projects not yet created (and didn't find even find a really good solution in the end) in S/4 so I think this is one are where customer experiences are something we can really learn from.

[erno_n]

Hi Glenn, how did you solve the process for planning for assets and their depreciation for projects not yet existing in S/4?

[dennis_freese]

Dear Erno, we found this API last week too. We'll try to figure something out in the upcoming weeks.
I keep this blog updated. KR, Dennis

[glenn-chamuel]

That's the easy part ... planning for projects not already in S/4 is included within the standard content under the project planning, as well as the depreciation planning. If you are familiar with that content already, then I'm likely not understanding your question.

You may be referring to the lack of syncing SAC data back to S/4? If so, then we kept with the client's S/4 governance model, which only allowed SAC to writeback to ACDOCP.  So, we needed to manually reclass within SAC after the actuals were realized in S/4. Some of this was automated by manually maintaining SAC dimension properties between projects and assets to corelate SAC with S/4.

[erno_n]

Yes exactly, the planning in SAC would work but then the question is that how to match that plan with the actual project when it's created and actuals are coming in. For us, there were too many small projects that would be too much manual work to reclassify to the actual projects so we went with a "dummy" project in SAC on which a lumpsum would be planned and adjusted when actual projects flowed in.