Best Practices for

Generating Accurate,
Efficient, and High-Quality
Financial and Enterprise
Performance Management
Reports
Matt Christensen
PRAGMATEK Consulting Group
2005 Wellesley Information Services. All rights reserved.

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

Financial and Performance Reporting with SAP BW

The ultimate goal of most initiatives and strategies is to

improve financial results

To consistently do this, however, you need to closely monitor

changes and trends in financial analytics ...
And then reconcile these results with other sources to
produce a single version of the truth

Unfortunately, R/3 offers limited performance, flexibility,

and formatting for financial reporting

Financial and EPM Reporting SAP BW vs. SAP R/3

Better add-hoc query tools

Enables financial analysts to maintain their own reports

Better reporting performance

Eliminates transactional system performance impact on
operations caused by financial reporting
Better formatting and flexibility over Report Painter

Financial and EPM Reporting SAP BW vs. SAP R/3 (cont.)

Excel workbook integration

Web-based reporting
Better push distribution capabilities

Information Broadcasting (see Bjarnes session from Day 1)

Off-line reporting of point-in-time information

Forward-looking calculation capabilities
More manageable, exception-based reporting and
notification options
Lays the groundwork for future SAP Strategic Enterprise
Management (SEM) initiatives
6

However, Youll Face Three Key Challenges

Picking the right source(s) of financial data

Storing the data accuracy, performance, flexibility

R/3 Profit Center Accounting? General Ledger?

Profitability Analysis?
In an ODS? In Infocubes? How to use MultiProviders?
Hierarchies? Virtual Key Figures?

Creating accurate, meaningful, auditable reports

Flexibility is important
Must consider ease of maintenance
Maintain a sound audit trail from source to report and back

In This Session ...

Key benefits and considerations of each data

source option
Proven techniques to strike a balance between flexibility
and data integrity
Tips and tricks to efficiently deliver meaningful results
On your CD:

Note

Examples of good and poor financial reports and screencams

of the demos
These concepts and techniques apply to all functional
areas not just finance!
8

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

Picking the Best Data Source Key Considerations

What reports are you producing?

Where is your existing R/3 data?

Constantly return to the requirements in validating solution

Have you implemented Profit Center Accounting?
Is Profitability Analysis utilized? Is it reconciled?

How easily can the data be accessed?

Will existing data suffice or do we need to supplement?

Are efficient delta extraction methods available?
Delta extracting only new or updated records
Are there other systems besides R/3 that need to
be integrated?

Picking the Best Data Source Key Considerations (cont.)

Where are existing reports sourced?

Do you trust them?

What types of reports are required (balance sheet, cash flow)?

What would you like to get in the future?

Near-term future requirements may drive implementation of

Profitability Analysis
Split Standard Cost into cost components
Analyze variances by category or cost component

Key Sources for Financials Data

1 Profit Center Accounting

2 Profitability Analysis
3 Enterprise Controlling
4 General Ledger (G/L)
5 Special Purpose Ledger

1 Profit Center Accounting Benefits

May be trusted as a source for existing R/3

financial statements
Some detailed information (material sold-to customer) is
populated in line items
Delta extraction by entry time (as of R/3 PI 2003.1)
enables frequent updates (R/3 DataSource 0ec_pca_3)
Keys are available to enhance extracted data with
logistics information

Transaction SMOD, user exit rsap0001

Solid jump-back target for navigating back to

original documents

Jump to R/3 transaction KE5Z PCA Line Item Display

1 Profit Center Accounting Considerations

You need to create an index on R/3 table GLPCA for

efficient delta processing

PCA is often limited to Income Statement accounts

The key should be rclnt cpudt cputm (see SAP Note 597909)
Building this index may conflict with ongoing transactions
Consider doing this during system downtime
You can configure it the transfer of additional balance
sheet accounts

Month-end transfer processes

i.e., Inventory, WIP, Receivables, Payables, Assets

May override line items collected during fiscal period
Require a single full load each period

2 Profitability Analysis (PA) Benefits

You can generate custom DataSource, InfoSource,

and InfoCube
Relevant characteristics and value fields may already be
populated in costing-based PA

Depending upon your configuration

Delta extraction by entry time enables frequent updates

Existing PA users are familiar with analytical reporting
concepts and will find the terminology intuitive
Reporting performance improvements over R/3
Is a solid jump-back target (transaction KE24)

2 Profitability Analysis Considerations

Costing-based PA often not suitable as source of

financial results due to timing differences

Secondary characteristics are posted at time of entry

e.g., sales representative, material group, product hierarchy

Doesnt offer balance sheet information

You must create an index for efficient delta updates

Cost of Sales is recognized with invoice, rather than upon

inventory movement

See SAP Note 210219

Costing-based PA follows a key figure model

Even basic key figures contain intelligence

e.g., revenue or material cost of sales vs. just amount

2 Profitability Analysis Considerations (cont.)

Key figure model vs. Account model tradeoff

Key figure models grow laterally (columns)

Account models grow vertically (rows)
Key Figure Model
Customer

Revenue

Discounts

Cost

XYZ Co.

$150

$25

$50

Account Model
Customer

Account

Amount

XYZ Co.

Revenue

$150

XYZ Co.

Discounts

$25

2 Profitability Analysis Considerations (cont.)

XYZ Co.

Cost

$50

3 Enterprise Controlling Consolidations Benefits

Offers existing, consolidated financial results

Enables a time-dependent organizational structure

By duplicating data per hierarchy validity period

Offers both balance sheet and income statement results

Good performance pulling from totals table

18

3 Enterprise Controlling Consolidations Considerations

No delta capabilities

Data volume can grow

e.g., consolidation units, consolidation items

Few opportunities to enhance the data

If organizational structure changes frequently

Characteristic terminology is unfamiliar

Updates will be less frequent or only at period close

Totals table records dont contain sufficient keys to access

original documents

The current version of the solution is SAP SEM-BCS

(Business Consolidation Systems)
19

4 General Ledger Benefits

Most trusted source of financial reporting results

Standard delta capabilities delivered by SAP
Is a solid jump-back target (transaction FBL3N)
Can link to original documents to enhance
extracted data

20

4 General Ledger Considerations

No visibility to secondary cost element details

Multiple standard DataSources

Cost center assessments

Labor applied to production orders, etc.
Accounting Doc header and line items (0fi_gl_4)
Totals table (glt0) results (0fi_gl_6)
COS Ledger (glfunct) results (0fi_gl_7)

Entry time is not stored on line items

Limited to updates once per day in early releases

Operational Data Store (ODS) logic required to eliminate
duplicate records in current versions
21

5 Special Purpose Ledger Benefits

Offers visibility to both financial and

controlling transactions
Often customized may have already been enhanced to
reflect enterprise-specific characteristics
Results are probably trusted and used for current
reports if the special ledger has been implemented
Line item or totals extracts are available

Depending upon need for details or high-level performance

22

5 Special Purpose Ledger Considerations

Reporting characteristics are limited to the data initially

collected in the Special Ledger
Line item or totals table can be used as source
You need to create an index for efficient line item deltas

Key fields are rclnt rldnr cpudt cputm (see SAP Note 597909)
Building this index may conflict with ongoing transactions
Consider creating it during system downtime

A delta queue is populated on R/3 to store each change

when using the totals table option

Remember to run delta or risk overflow

23

Picking the Best Data Source Making the Decision

General Ledger, Special Purpose Ledger, and

Profit Center Accounting are great options for
financial reporting
Profitability Analysis or Profit Center Accounting are
often used for enterprise performance measures
Take advantage of detailed DataSources to read related
documents and incorporate non-financial data
Always use the delta concept to keep
performance reasonable

24

Best Practices for Robust Data Transfers

Use Time-Based Delta DataSources whenever possible

Most work with one hour of safety time

Avoids missing transactions that are in process
during extraction
This means that a delta requested at two oclock will pull
information up to one oclock
You may need to sacrifice storage requirements and
performance in order to gain additional integrity and the
ability to shorten safety time

25

Best Practices for Robust Data Transfers (cont.)

Solution to gain integrity and responsiveness:

Stage all data in ODSs, with financial document number

as the key
Provides complete redundancy of source data with direct
audit trail
Choose the overwrite option in the ODS update rules
Duplicate records will produce no change to BW
Use an internal queue to update report-focused InfoCube(s)
Combines reporting performance of InfoCubes with the
integrity of ODS processing
It also lets you establish time-based deltas without downtime
i.e., intentionally load overlapping records and let BW sort
them out
26

Final Thoughts Other DataSources

There are many other DataSources that provide specific

subsets of information for boutique reporting

Cost center accounting

Internal order accounting
Project systems
Accounts payable/receivable
Fixed assets
Etc.

Don't
Forget

27

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

Strategically Storing Your Financials Data

Store only information that does not change as part of

core data
Build in flexibility for organizational changes
and restructuring
Utilize BW tools for data consolidation and
summarization processes
Favor reporting performance over technical
considerations of redundant data
Consider the requirements for historical reporting

Key Techniques Within SAP BW ...

1 Use navigational attributes to relate characteristics

2 Use navigational attributes to consolidate data
3 Use time/version-dependent hierarchies for
organization rollups
4 Split your InfoProvider architecture in two
5 Use aggregates to enhance performance
6 Report only against MultiProviders
7 Define a consistent strategy for historic reporting
8 Define a strategy for currency translation

#1 Use Navigational Attributes to Relate Characteristics

Traditionally, characteristic assignments have been

made at time of posting

This leads to the need for restatements when

relationships change
Comparing results before and after reassignment is
extremely difficult

Use Navigational Attributes instead

Stored as relationships to base characteristics

e.g., customers sales representative
Time-dependency allows reporting of results based upon
relationships at any key point in time

#1 Use Navigational Attributes to Relate

Characteristics (cont.)

Traditional Attributes
Customer

Sales Rep

Bookings

ACME

John Doe

$1,000,000

Navigational Attributes
Customer

Bookings

Customer

Time

Sales Rep

ACME

$1,000,000

ACME

2004

John Doe

ACME

2005

Jane Doe

Reports

#2 Use Navigational Attributes to Consolidate Data

Non-SAP financial data sources are prevalent

The typical approach to data consolidation is to
translate to common terminology and merge

Its difficult to talk to subsidiaries in their language

Use Navigational Attributes instead

Store non-native data in source terminology

Maintain mapping in SAP BW using Navigational Attributes
When you jump back (Report-to-Report Interface) from
consolidated results to the detailed source, the mapping is
automatically deciphered
May also be used for data summarization

#2 Use Navigational Attributes to Consolidate Data (cont.)

Translation and consolidation using

Navigational Attributes
Navigational Attributes

Source Data
Org.

Acct. Amt.

Org.

Acct.

Cons Acct.

Z01

100

$50

Z01

100

100000

Z01

101

$50

Z01

101

100000

Consolidated Data
Org.

Acct.

Amt.

Z01

100000

$100

#3 Use Time/Version-Dependent Hierarchies for

Org. Rollups

A single organizational structure is defined in R/3

Organizational changes often require manual

accounting corrections
Its difficult to simulate organizational changes and compare
pre- and post-change results

Use Time- and Version-dependent Hierarchies instead

Reporting results can be rolled up based upon the

organizational structure at any point in time
Simulated organizational change is supported
Data must be stored at a sufficiently detailed level to support
these realignments

Key Ideas for Using Hierarchies ...

Display your results in a hierarchy format

Restrict your results through selection of a

hierarchy node

Total cost broken down by functional area and cost center

Sales by region and customer

Ease of report maintenance

Provide a selection variable for user to select area to analyze
Examples:
Total asset accounts
All accounting cost centers throughout organization

Basis for maintaining security to characteristic values

#4 Split Your InfoProvider Architecture In Two

For each Financial DataSource create:

A Summarized (simplified) InfoCube for primary reporting

A Detailed ODS or InfoCube for further research prior to
R/3 investigation
Consider multiple summarization levels for complex reporting

Can load data in parallel to optimize performance

Configure jump-back queries to force users through the
detailed InfoProvider prior to returning to R/3
Source
Data

ODS

Cube

#5 Use Aggregates to Enhance Performance

Use aggregates to enhance performance

Aggregate data is stored redundantly based upon limited

fields/characteristic values as specified
SAP BW automatically chooses the appropriate data source
when reports are executed
Aggregates should be used with any significant level of data
Create a reasonable number of aggregates
Constantly monitor usage and report performance within
statistics (transaction st03n)

#6 Report Only Against MultiProviders

A MultiProvider is a virtual InfoProvider

It maps one or more physical InfoProviders together (Union)

Characteristics and Key Figures are selected
within MultiProvider
Each Characteristic, Navigational Attribute, and Key Figure
from physical InfoProviders is mapped into a compatible field
in the MultiProvider

When to use?

Combine actual results and planning figures

Split and recombine large ODS objects for performance
Enable cross-functional reporting

MP
IC

IC

#6 Report Only Against MultiProviders (cont.)

Report only against MultiProviders

This hides technical complexities, such as characteristics

stored directly vs. navigational attributes
It also gives you the flexibility to add or split underlying
InfoProviders in the future without changing queries
You may still restrict InfoProviders selected within
a MultiProvider
Note that the underlying structures should match perfectly to
streamline reporting

#7 Define a Consistent Strategy for Historic Reporting

You need to be able to review past reports

Key Issue:

Should we keep enough detail to recalculate them or take

periodic snapshots?

Considerations

Volume of records
Frequency of time period (daily, weekly, periodic)
Granularity of analysis how many characteristics to analyze
Flexibility for future change

#7 Define a Consistent Strategy for Historic

Reporting (cont.)

Accounts Receivable Aging report

Document-level logic required for aging open items

Includes date invoiced and date paid
Could still be unpaid
Includes calculation of days open and assign-to aging buckets

Option 1: Store details, only and re-calculate each report

Pros:
Flexibility to meet changing or ad-hoc
reporting requirements
Cons:
Data volume could be huge
Relatively poor performance difficult to optimize

#7 Define a Consistent Strategy for Historic

(cont.)

Option 2: Store snapshots periodically

Reporting

Pros:
Less storage required
Faster access to reports
Ability to tune with aggregates
Cons:
Must pre-select characteristics to analyze

Compromise? Both of the above!

Retain ODSs with all historic information, so you can reload

Key performance reports from summarized snapshots
Operational reporting from detailed InfoCube
43

#8 Define a Strategy for Currency Translation

You can retain every currency from source system

When not available, should it be stored or reported?

Transactional
Legal
Common Group (USD)
Historical vs. flexibility

Key Figure or Characteristic?

Prefer key figure for BPS

Key Figure

Characteristic
Acct

Curr

Amount

1000

Loc

10EUR

Acct

Local

Group

1000

Grp

$15

1000

10EUR

$15

1200

Loc

15EUR

1200

15EUR

$23

1200

Grp

$23
44

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

45

Developing Accurate, Responsive, Effective Reports

Achieve accurate reports by focusing upon consistent

and maintainable definitions
Use multiple Worksheets in Excel to provide
formatted reporting
Provide a reasonable level of drilldown as an audit trail
Build flexibility into currency type reporting to support a
broader audience
Focus on exceptional results and provide forwardlooking reports to focus management action

46

Key Techniques Within SAP BW ...

1 Use row and column structures in formatted reporting

2 Create cell definitions to meet detailed requirements
3 Implement workbook formatting best practices
4 Provide controlled jump back analysis
5 Explore your currency translation options
6 Conditions and Exceptions
7 Empower users with predictive reporting

47

1 Use Row and Column Structures in Formatted Reporting

Use of row and column structures enables consistency

Save and reuse structures

Base individual items on consistent characteristics
Functional Area for P&L, Ledger account for Balance Sheet
Use hierarchy-based selection to streamline maintenance
New GL account is added once and updates all reports
Define structure of record as basis for regulatory and
managerial reporting

Utilize consistent placement and/or naming of data in

order to enable lookups and subsequent formatting

48

2 Create Cell Definitions to Meet Detailed Requirements

Available if both column and row structures are used

Enables selection of individual cell for subsequent
use in formulas calculations

For example, sales for use in percent of sales column

49

2 Create Cell Definitions to Meet Detailed

Requirements (cont.)

Override row and column definitions at cell level

Formulas combining other cell values and formula variables

Selections that restrict characteristics and key figures

Can define Help Cells for use in calculations without

displaying their results
You can still use dynamic characteristics for analysis
Exceptions may be defined to individual cell level

50

3 Workbook Formatting Best Practices

Include results on the Data tab

Format output results on the Presentation tabs

Use structures to ensure consistent placement/naming

Name tabs appropriately
Use VLOOKUP function to ease future change

Teach power users to drill down from the Data tab

51

4 Provide Controlled Jump Back Analysis

Provide standard queries with ample characteristics to

minimize detailed reporting (report-to-report interface)
Additional reporting from ODS level

Depends upon performance

Jump back to R/3 with meaningful keys

52

5 Explore Your Currency Translation Options

Translate results at time of load for regulatory reporting

and audit ability
Translate at time of report using predefined, fixed, or
variable exchange rate type

You can replicate rates with R/3

Provide flexible target currency for selection by

power users ...

Select with each report

Variable
Fixed
Read InfoObject value
53

5 Explore Your Currency Translation Options (cont.)

Utilize flexible time references ...

Define a fixed value per translation method

Current system date
Constant key date
Read variable
Read a time value that is variable within results
Beginning/end of period
Flexible InfoObject
Translate based on key query date

54

6 Conditions and Exceptions

Call attention to exceptional results on

formatted statements

Highlight great performances

Call attention to areas that need correction
Identify variances that fall out of tolerances

Focus results for analytical reports

Filter results to top 5% or top 10 customers

Keep overall result to show relativity

55

7 Empower Users with Predictive Reporting

Provide projected results rather than just historic

Enables easier comparative analysis

Brings focus to bear on current period

Example: Forecasted sales options

Sales to Date * Days in Period / Days Elapsed

Sales to Date + Yesterdays Sales * Days Remaining
Sales to Date + Sales Forecast / Days in Period * Days
Remaining

56

Reporting Demo

Workbooks
Jump back with data translation
Exception/condition
Predictive reporting

57

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

58

SAP SEM Overview

SAP Strategic Enterprise Management (SEM) installs on

SAP BW providing:

Business Planning and Simulation

Management Cockpit
Balanced Scorecard
Value Driver Tree
Business Consolidations
And much more

These tools enable data input directly into

SAP BW InfoCubes
Optimize your BW structure in order to streamline your
SEM implementations and avoid costly rework
59

Use InfoCubes vs. ODS for Potential SAP SEM Data

SAP SEM data input capabilities are enabled by

transactional setting on InfoCubes

Set your cubes up with this option selected to enable future

data input
Cubes can be converted in the future if necessary with
program SAP_CONVERT_TO_TRANSACTIONAL

Use InfoCubes rather than ODS to enable future data

inputs by BPS

60

InfoCube Best Practices

To protect data, InfoCubes must be set to loadable (SAP

BW interfaces) or plannable (SAP SEM interfaces)

Tip

The easiest solution is to keep data that is loaded from a source

in one cube and SAP SEM planning data in another
You may even want to consider storing data redundantly if
Actuals are used in planning process
Also, write all of your reports against a MultiCube, so InfoCubes
can be added in the future with no end-user impact

61

What Well Cover

Financial and performance reporting with BW: Overview

Picking the best data source(s) to load SAP BW
Storing the data: Achieving flexibility and performance
Developing accurate, responsive, effective reports
Positioning yourself for a smooth transition to SAP SEM
Wrap-up

Resources

help.sap.com navigate to Business Information

Warehouse and read Financial Business Content
sap.com/community SAP Business Intelligence
discussion forums
On your CD

Examples of good and poor financial reports and screencams

of the demos

7 Key Points to Take Home

Financial reporting with SAP BW allows you to go

beyond satisfying basic requirements

Delivered business content is quite good in the

financial areas

This can lead to rapid return on investment (ROI)

Be certain to look to the future when determining

requirements for financial reporting capabilities

And add decision-making analytical capabilities

e.g., organizational changes

SAP BW can deliver revolutionary reporting flexibility

to users

7 Key Points to Take Home (cont.)

A good implementation of financial data in SAP BW will

make reporting simple for users
Maintaining a solid audit trail back to source documents
is preferable to storing extraneous information in
SAP BW
SAP BW is not the end of the road for your
financial information

SAP Strategic Enterprise Management functionality should be

taken into consideration

Your Turn!

How to contact me:

Matt Christensen
matt.christensen@pragmatek.com