What does document splitting enable in SAP FI?

Document splitting in SAP FI facilitates the division of accounting documents into multiple segments based on specified criteria. This allows for more detailed financial reporting by ensuring that the balances of various organizational units, such as profit centers or segments, are accurately reflected in the financial statements. By capturing different aspects of a transaction, document splitting provides better insights into various areas of business operations, thus enhancing the quality and granularity of reports available for analysis.

When document splitting is activated, the system automatically generates separate line items for each segment involved in a transaction. This capability is particularly advantageous for organizations that require detailed tracking and reporting across multiple dimensions, such as geographical locations or business units, enabling them to make more informed decisions based on the comprehensive data gathered.

While summary reports, tracking individual cash transactions, and retrospective alterations to account balances are significant functionalities of SAP FI, they do not directly pertain to the primary purpose of document splitting, which centers on enhancing the level of detail within financial reporting through the division of transactions.