Document Splitting

Document splitting is an automatic process of splitting document line items within a document according to selected dimensions. Companies that intend to carry out segment reporting based on high-quality data will benefit substantially from this function.
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Online document splitting involves customizing, migration effort, and system testing. The reason to implement this new function is that it enables you to obtain transparent and detailed insight into the different business activities (areas) of an enterprise. The principles of presenting financial information according to business segments and geographical segments requirement for segment reporting are set forth in IAS 14, which therefore meets the requirement for segment reporting. Previously, the “business area” and “profit center” objects were usually used to create this type of report, provided that—and this often represented the actual challenge—the two objects did not have to meet any other reporting requirements.
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Some postings, such as tax transactions, receivables, and payables cannot be enriched with these characteristics. For those cases, the closing activities in SAP R/3 included adjustments of balance sheet and P&L accounts or a totals posting using the SAPF180 and SAPF181 programs in order to obtain a balance of zero in the business area and profit center statements. Basically, there is no legal requirement for such detailed information that can be met by document splitting.
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From an internal point of view, the approach of providing split documents to support corporate management is rather complex. In the context of closing procedures, high-quality figures represent a considerable added value, particularly if matrix consolidation is used. Moreover, developments of individual segments can be analyzed better, that is, at any time and in more detail. If you implement the document splitting concept consistently, you must consider that this will have a substantial impact on the operations carried out in your accounting department.
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The document splitting concept requires that posting transactions be entered generically for the purpose of future consolidation and reporting. This means that it must be possible to split each posting within a set of rules. If this is not possible, the process cannot be performed. The topics of financial statements for segments and document splitting are relevant not only for large corporations. Mid-sized companies also see the benefits brought about by New General Ledger (New G/L) and the document splitting function. However, in order to reach this goal, operational transactions must not be modified too much or interfered with. Subledger accounts, for example, are entered only once, and despite the fact that document splitting is used, only one open item exists for receivables and payables. Thus, internal splitting of the generic transaction does not affect external business partners and is, in turn, only relevant for reporting purposes in general ledger accounting.