Foreign currency valuation in SAP S/4HANA offers an optimized and automated solution for the periodic valuation of foreign currency transactions. This function makes a significant contribution to increasing accuracy and transparency. At the same time, manual interventions are significantly reduced, which not only increases efficiency but also minimizes errors.
What is SAP foreign currency valuation?
SAP foreign currency valuation is an essential function within the SAP software that enables companies to precisely record and valuate financial transactions in different currencies. This function is of central importance, especially during the period-end closing, as it ensures that financial results are presented correctly and transparently.
Foreign currency valuation customizing
What functionalities does foreign currency valuation offer in SAP S/4HANA?
SAP S/4HANA offers an extensive range of functionalities for foreign currency valuation, which contribute to process optimization and process automation:
- Automatic valuation: The software enables the automated valuation of foreign currency transactions at defined valuation times, based on the current exchange rates. This ensures that valuations are always up to date and correspond to real market conditions.
- Flexible valuation methods: Companies can define various valuation methods and rules that are tailored to their specific industry requirements and business processes. This flexibility enables companies to individually adapt and optimize their valuation approaches.
- Seamless integration with other modules: Foreign currency valuation is fully integrated into the SAP modules Financial Accounting (FI) and Controlling (CO). This ensures consistent and comprehensive financial reporting that takes all relevant aspects into account.
What’s new in transaction FAGL_FCV?
For foreign currency valuation, use transaction FAGL_FCV in SAP S/4HANA. This is already known from SAP ERP and the new general ledger, but there are some changes under SAP S/4HANA:
- Transaction FAGL_FCV now posts directly without first creating a batch input session (a previous test run can be performed).
- In the selection screen, you will recognize the changes in the Posting mode area. You only need to specify the key date of the valuation. If the “Determine automatically” indicator is set, the remaining necessary dates and periods are automatically determined.
- The valuation is always carried out for a valuation area, i.e. for an accounting regulation. In addition, error messages are written to the “Error Correction System” (ECS). Alternatively, you can still have a batch input session generated, which then has to be played manually.
- Valuation of open items and balances: As part of the periodic foreign currency valuation, open items in the subledger (accounts receivable and accounts payable), open items for G/L accounts and G/L account balances can be valuated. This comprehensive valuation ensures that all relevant financial positions are correctly recorded and valuated.
- Delta logic: Due to local legal requirements, it may be necessary to activate the delta logic in some countries. This function ensures that the valuation is not reversed as part of the annual financial statements and is therefore retained.
FAGL_FCV for foreign currency valuation
What are the advantages of using foreign currency valuation?
Foreign currency valuation in SAP S/4HANA offers numerous advantages that contribute to the digitization and increased efficiency of financial processes:
- Increased accuracy and transparency: Automated valuations ensure a high level of accuracy and transparency in financial reports. This is particularly important for compliance with legal regulations and international accounting standards.
- Reduction of manual tasks: By automating the valuation processes, manual interventions are minimized, which reduces the turnaround time and significantly lowers the risk of human error. This leads to a more efficient and reliable processing of financial transactions.
- Time and cost efficiency: Companies can achieve significant time and cost savings through the efficient handling and valuation of foreign currency transactions. Resources that were previously required for manual processing and verification can now be used for other value-added activities.
How does SAP S/4HANA contribute to compliance?
SAP S/4HANA helps companies ensure compliance with legal regulations. The regularly updated functions of the software ensure that foreign currency valuation complies with current regulatory requirements. This not only promotes the digitization of financial processes, but also the legal certainty and reliability of financial reporting.
Foreign currency valuation in SAP S/4HANA is a powerful tool that helps companies optimize their financial processes and ensure a high level of accuracy and transparency in their reports. The comprehensive process automation and integration offer numerous advantages that make companies more efficient and successful. SAP foreign currency valuation is therefore an indispensable component of modern financial management.
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