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Going Under the Hood: How SAP S/4HANA Finance Will Streamline Your Accounting and Controlling Activities

Sonam PawarTruQua Enterprises

1

In This Session

• Learn how, by using SAP S/4HANA Finance, data will be sourced from one table — known

as ACDOCA — to reduce the need for data replication and facilitate the harmonization of

internal and external accounting activities

• Assess what impact SAP S/4HANA Finance takes on core controlling processes, such as

Cost-based and Accounting-based profitability analysis

• Hear firsthand how, from master data to hierarchies, the convergence of general ledger

accounts and cost elements impacts accounting processes

• Examine the extension ledger and how it streamlines the way in which organizations can

adjust and report on their FI and CO data

SAP S/4HANA Finance formerly known as SAP Simple Finance

2

What We’ll Cover

• SAP S/4HANA evolution

• Universal Journal impacts to functionality

• SAP S/4HANA key functions and features

• BPC optimized for SAP S/4HANA impacts to functionality

• Wrap-up

3

What Is SAP S/4HANA Finance?

• Well, what is SAP S/4HANA Finance really?

Short answer: “It’s FI/CO redesigned for HANA and Fiori” (while SAP S/4HANA is SAP

ERP redesigned for HANA and Fiori)

Many past SAP design challenges resolved like CO-PA reconciliation with FI-GL

• Is SAP S/4HANA Finance really simple?

Data convergence into singular tables enables simplified information delivery options

Integration also becomes easier and reconciliation efforts reduced

Real-time access eliminates complexities associated with job scheduling

New user experience with SAP Fiori UX modernizes and simplifies tasks

• “Simple ain’t easy!” Example – Google, iPhone (simple to use but sophisticated under the

covers)

4

Changing the User Experience with SAP Fiori

• SAP Fiori not only improves transactional tasks and processes but analytics as well

making the user experience role-based and streamlined

• Example Margin Analysis Fiori application:

5

Changing SAP Enterprise Management with SAP HANA

One atomic copy of data for Transactions +

Analysis, all in-memory

Eliminate unnecessary complexity and latency

Less hardware to manage

Accelerate through innovation, simplification + in-memory

3 copies of data in different data models

Inherent data latency

Poor innovation leading to wastage

Transactions + Analysis + Acceleration

processes separated

SAP HANA(DRAM)

Transact

ETL

Analyze

ETL

A Common Database Approach for OLTP and OLAP

Using an In-Memory Column DatabaseHasso Plattner

Accelerate

Cache

VS.

Source: SAP, 2015

6

Functional Implications of SAP S/4HANA Finance Migration

• Moving to SAP S/4HANA Finance is a major migration

All Cost Elements (primary and secondary) become GL accounts

All documents from both GL and CO is migrated to the new Universal Journal table ACDOCA

Requirement to upgrade to New Asset Accounting

While New GL is not a true prerequisite, customers on Classic GL will also be migrated to the

SAP S/4HANA Finance GL (which matches New GL) as part of the migration

Parallel ledger functionality after system conversion from Classic GL available in version

1610 but can’t be implemented in same year of conversion

Document splitting is still not available after system conversion from Classic GL

Both parallel ledger and document splitting can be converted from New GL

Impact to Material Ledger and parallel valuations

Certain parallel valuation scenarios, such as alternative Cost of Goods Manufactured

(COGM) and ABC Delta versions are not supported

7

“New” Applications in SAP S/4HANA

New Application Explanation

New General Ledger

Classic General Ledger is mostly automatically transformed into a basic

implementation of New General Ledger (G/L in SAP Accounting powered by SAP

HANA)

New Asset AccountingClassic Asset Accounting is mostly automatically transformed into the New Asset

Accounting

SAP Cash ManagementClassic Cash Management is replaced by the new SAP Cash Management.

SAP Cash Management requires a separate license. Refer to SAP Note 2044295

• New General Ledger is not so new but is required for SAP S/4HANA

• New Asset Accounting is more of an adaption than completely new (began as business

functions FIN_AA_CI_1 in EhP6 and FIN_AA_PARALLEL_VAL in EhP7) – also required

• SAP Cash Management is probably the most new with Bank Account Management (BAM)

options for either the light (BAM Lite) or full version (see SAP Note 2165520)

8

What We’ll Cover

• SAP S/4HANA evolution

• Universal Journal impacts to functionality

• SAP S/4HANA key functions and features

• BPC optimized for SAP S/4HANA impacts to functionality

• Wrap-up

9

Real-Time Reconciliation

• BSEG holds only the summarized general ledger values while ACDOCA can hold logistical details

and level of granularity enabling cross-walking of application data across modules

• There is considerable effort spent on reconciling the values between general ledger and sub-

ledger accounts of assets and material

• Reports like asset balances and asset history sheet do not directly reconcile with BSEG or GL

detail report – accountants spend a lot of manual effort to tie the GL with sub-ledgers

• In SAP S/4HANA, because ACDOCA contains the sub-ledger values reconciliation becomes

simpler and in real-time

• During the month when the controlling settlements have not yet been executed, without ACDOCA

accountants have to pull different reports – cost element detail – but with GL & cost element

integration the complete financial statement would be visible using reports like F.01

ACDOCA – Universal Journal

General Ledger Receivables Payables AssetsMaterial Ledger

Profitability Analysis

Overhead Management

Funds Management

Custom Defined

10

New Currency Types

• In version 1610, you can configure all

currency types for each ledger and assign

up to eight freely-definable currency types

supplementing the two fixed SAP currency

types (local and global currency)

• The new currencies are converted in real

time for each journal entry according to the

specified currency conversion settings

• The following business processes can

handle the new currency types:

Open Item Management in FI-GL, FI-AP,

FI-AR

Allocations in FI and CO

Currency Type Coverage

11

SAP S/4HANA Extension Ledger

• The extension ledger contains postings depending on the underlying leading ledger or non-

leading ledger

• When postings are made to the Leading Ledger, the Extension Ledger contains only the

adjustment entries.

• Only manual postings to the extension ledger would be stored separately in the database

• Benefits:

No storage of redundant data

Reduced reconciliation effort between the 2 ledgers

12

Reviewing the Data within the Universal Journal

• The universal journal spans across 340+ standard fields (in 1511)

It unifies header and line item data from various other modules like CO, AA, and MM

• No document summarization and 999 line-items restrictions except for prima nota postings

• As compared to BSEG the ACDOCA table contains additional information like:

Posting date Item category Operating concern

Ledger Sales Order Partner Account Assignment

Operating concern Sales order item Sales Organization

Is Settled / Transferred Depreciation area Distribution Channel

Or.transctn.currency Trans. Type Category Division

Account Number Depreciation period Material Group

Inventory Value Group asset Customer Group

Moving Average Price Material Price Determination: Control Bill-To Party

Standard Price WBS Element of Inventory Ship-To Party

13

Asset Accounting in Universal Journal

• The FI AA data from tables – ANEK, ANEP, ANEA, ANLC, ANLP – are now be stored in ACDOCA

• The depreciation postings are recorded in ACDOCA at the individual asset level thus making

depreciation analysis easier and reporting at asset-controlling object level possible (see below)

• Any change to master data or transactional

data are constantly updated making the

“Recalculate Values” – AFAR redundant

• For an asset document in ACDOCA the

depreciation area 01 no longer dominates

to be the Leading Valuation Area (just

because it is mapped to the leading ledger)

Source: SAP

14

Balance Sheet Splitting in Universal Journal

• Universal Journal

(ACDOCA) carries both

the profit center (or

segment) and vendor

(or customer) on the

reconciliation account

• In contrast, the New GL

line items (FAGLFLEXA)

would only have the

profit center (or segment

split) while document

line items (BSEG) would

not

15

Reporting Multi-Dimensionally on the Balance Sheet

• Carry forward can be configured to keep the detail for selected dimensions

• Balance sheet breakdowns with sub-ledger details to facilitate reconciliation with general

ledger

Balance SheetFixed Assets by Assets

Receivables by Customer

Inventory by Material

16

Understanding the Impact to Profitability Analysis

• In S/4HANA, the costing-based CO-PA is not impacted

• Universal Journal eliminates account-based CO-PA reconciliation effort needed but

doesn’t replace costing CO-PA and the reconciliation efforts therein

• Activation of account-based CO-PA is needed for using CO-PA with universal journal

• Account-based CO-PA directly uses ACDOCA with no new controlling documents being

posted to COEP

• Adding customer-specific characteristics can be done either via account-based CO-PA

solution or extending the coding block via a customer include CI_COBL

• In version 1610, CO-PA realignments are supported as a key consideration

• Up to three additional quantities can be defined per controlling area via

BAdI FCO_COEP_QUANTITY

17

COGS and Variance Splitting by Account in SAP S/4HANA

• COGS cost component and production variance splitting

by accounts, is possible

• New BAdI functionality in version 1610:

FCO_COGS_SPLIT_RELEVANCE – Allows to

split COGS even if there is no sales order on goods

movement (a restriction before)

FCO_COGS_SPLIT_BASIS – Allows different basis for

split than the unit cost estimate for the sales order

item or the standard cost estimate for the

material/plant combination (prior restriction)

For example, you could use a past or future

standard cost estimate or the actual cost estimate

of the previous year. Also can use a different cost

component structure as the basis for the split, such

as an auxiliary split.

18

Reporting on PA Segment and Cost Object Simultaneously

• Also a PA segment (e.g., customer) and cost objects (e.g., cost center) can be

simultaneously posted to (as opposed to “real” versus “statistical” posting tradeoffs)

• Profitability characteristics are immediately during each “primary” posting

• Approach: Take all information that is available and known at any point in time. Post to a

cost object and fill CO-PA segment attributes all in one step.

• No settlement run needed to show relevant market segment information in profitability

• SAP

Example: Posting of salaries and immediate assignment of the respective market segment

G/L Account Cost Center PA Segment Debit Credit

Salaries and wages Development BRAKES CARS20.000 €

• SAP stores CO-PA segment

information to each P&L line

immediately (such as salary costs

also posted to a cost center)

• Doesn’t displace settlements – still

needed for indirect allocations

Source: SAP

19

Analyzing New Breakdowns Available in the General Ledger

• Maximized level of detail stored centrally for

use in all applications

1

2 3

Fixed asset causing the depreciation is available

in cost center reporting.

New structural capabilities: Ability to analyze

costs for all cost object types together

Air travel costs can be analyzed across different

CO-objects in one report

Further specific analysis by PA segment is

possible without waiting for the closing process to

happen

Air travel for customer projects by region (from

the PA segment)

1

2

3

20

Slicing and Dicing the Trial Balance with Universal Journal

• An example Fiori application for multi-dimensional analysis of the General Ledger

Drilldown

21

What We’ll Cover

• SAP S/4HANA evolution

• Universal Journal impacts to functionality

• SAP S/4HANA key functions and features

• BPC optimized for SAP S/4HANA impacts to functionality

• Wrap-up

22

Synchronizing General Ledger Account and Cost Elements

• New field “GL Account Type” introduced with merge of GL accounts with cost elements

• Cost element auto-creation along with the assignment to a cost element category

• Authorizations impact where access to both G/L accounts and cost elements may be needed

T-codes for cost

element

KA01/KA02/KA03

now point to FS00

23

Reviewing a Secondary Cost Posting in SAP S/4HANA

• Secondary (CO) postings will now be

posted from General Ledger and stored in

Universal Journal (i.e., ACDOCA instead of

COEP)

24

Seeing an Example Impact of a Merged Chart of Accounts

• In Simple Finance

1.0, planning was on

the EC-PCA account

hierarchy

• In the second SFIN

version (1503) it

migrated to the

financial statement

version because of

the introduction of

the table ACDOCA

(Universal Journal)

Financial statement version in

cost center planning

SAP S/4HANA Finance formerly

known as SAP Simple Finance

25

Bank Account Management

• The hitherto admin (IMG) function of creating House Banks and House bank account has moved

to a user transaction using SAP Fiori App – Manage Banks

• In order to exercise governance on the bank account management the Fiori tiles – My Bank

Account Worklist and Bank Account Management use the SAP ERP Workflow for bank account

maintenance – WS74300043 with three step authorization and approval process.

• The database table T012K has been redirected to the new Bank Account Management tables

Approval by Configuration

Specialist/ Admin

Approval by Cash

Manager

Account Creation by

Bank Accountant

26

Business Partner Approach

• In SAP Simple Finance 1.0, customer/vendor integration (CVI) was mandatory to keep customer

and vendor master data used in FI in sync with with business partner for certain integration

scenarios such as with FI-CML (Loans) and TRM (Treasury).

• In SAP S/4HANA 1511, customer and vendor master data maintenance was merged into business

partner (see SAP Note 2265093)

The Business Partner approach is not mandatory for SAP S/4HANA Finance 1503 and 1605

• The business partner approach reduces master data redundancy and improves centralized

governance

The business partner is the single point of maintenance for vendor and customer master

records

• Customer and vendor master data migration from older SAP versions to SAP S/4 HANA 1511 and

above is a 4-step process including: 1) Preparation 2) Synchronization 3) Conversion and 4) Post-

Processing

27

Inventory Valuation in SAP S/4HANA

• Transfer pricing now

supported as of 1605

• Includes 2 options:

By valuation view

(as before but with

separate columns)

By single valuation

ledger (updated in

parallel with

separate rows for

different

regulations)Source: SAP

28

Supporting a “Fast Close” in SAP S/4HANA

• Typical period-end closing activities involve the processing of large volumes of data –

reading records, computing values and updating one or more transactional and totals

tables

For example: settlements of production orders, maintenance orders, WBS elements

and WIP calculations implies reading and updating different tables

• The Financial Closing Cockpit applications can also be leveraged:

AppId AppName App Description

F0518 Financial Close Tasks with ErrorsDisplay the tasks with errors in a closing cycle and the reasons for the errors and follow up through SAP Jam or emails so that

the responsible agent can speed up.

F0519 Financial Close Delayed TasksDisplay the delayed tasks in a closing cycle and reasons for the delay and follow up through SAP Jam or emails so that the

responsible agent can speed up.

F0520Financial Close Progress (Due

Today)

Get an overview of the completion status of the tasks that are due today and the number of such tasks that are open, in progress,

with errors, and completed, respectively by different views, such as region and company.

F0521 Financial Close ProgressGet an overview of the completion status of the tasks in a closing cycle and the number of tasks that are open, in progress, with

errors, and completed, respectively.

F0522 Financial Close Overall DelayFind out about the overall delay in hours of a closing cycle and the reasons for the overall delay and follow up through SAP Jam

or emails so that the responsible agent can speed up.

F0695 Financial Close History Track the historical close information to find out whether the financial close in the previous posting periods was on track.

Source: SAP

29

Accelerating Period-End Processing Transactions

• Examples of SAP transactions that have been rewritten to be optimized with SAP HANA

(i.e., code push down to the database):

Functionality Old transaction New transaction

Settlement (plant selection) CO88 CO88H

Settlement (make-to-order sales orders) VA88 VA88H

Settlement (internal orders) KO8G KO8GH

Settlement (projects) CJ8G CJ8GH

Results Analysis (POC method or revenue-based) KKAK KKAKH

WIP Calculation at Actual Costs KKAO KKAOH

Variance Calculation with Full Settlement KKS1 KKS1H

Variance Calculation for Cost Centers KSS1 KSS1H

30

Reimaging Enterprise Risk Management with SAP S/4HANA

• Example: fraud detection

End-to-end process

automation

Elimination of manual work

Approval and exception

handling

Real-time alerts and blocks

Fraud calibrator for multiple

simulations

Machine learning to adapt

and improve fraud detection

Bottom

up

Top

down Expert

knowledge

Manual

rules

Database Predictive

models

Strategy

definition

and

calibration

Detection Investigation Performance

analysis

Source: SAP

31

Extending SAP S/4HANA with SAP HANA Cloud Platform Applications

• Example HCP applications for

SAP S/4HANA Finance include:

SAP RealSpend, Cloud

Edition

SAP S/4HANA Finance Cloud

for credit integration

SAP S/4HANA Finance Cloud

for customer payments

32

Building Your Own SAP S/4HANA Cloud Applications

• HCP applications are not limited to SAP – customers and vendors can create their own

Source: SAP White Paper on SAP S/4HANA Extensibility for Customers and Partners at

http://go.sap.com/documents/2015/07/2ad59b27-347c-0010-82c7-eda71af511fa.html

33

What We’ll Cover

• SAP S/4HANA evolution

• Universal Journal impacts to functionality

• SAP S/4HANA key functions and features

• BPC optimized for SAP S/4HANA impacts to functionality

• Wrap-up

34

Planning in SAP S/4HANA with BPC

• CO-OM planning, P&L planning, and profit center planning are now covered by BPC for

S/4HANA (SAP Note 2081400)

HANA Views

ERP Tables: Actual

Data

MultiProvider

VirtualProvider

HANA Views

InfoObjects

ERP Tables: Master

Data

In-Memory Cube:

Plan Data

35

Reviewing SAP Cash Management and BPC in SAP S/4HANA

• Global bank balances and cash

on SAP and non-SAP data

• Integrated liquidity forecasting

• Central Bank Account ManagementBusiness Suite on HANA

SAP HANA Platform

Aligned Single Source of Truth

Agile Real time finance processes

Predictive Insight and foresight

Integrated Business Planning

SAP Cash Management powered by SAP HANA

SAP Accounting powered by SAP HANA

Payments and Bank Communications

Payment Operations Monitoring and Status

Tracking Payment Factory

Bank and SWIFT Connectivity

Cash and Liquidity Management

Cash Operations Bank Account Management Electronic Bank Statements

Debt and Investment Management

Financial Risk Management Risk Identification

Type and Origin of Risk Risk Quantification

Exposure Mgmt Risk Analysis

Risk Management Hedge with Financial Instruments

Treasury Solution Map, Edition 2014

Workflow and Signatures

Liquidity Management

Front Office Deal capture

Mid Office Risk Controlling

Back Office Correspondence & Settlement

Accounting

Foundation Cloud Analytics Mobile Rapid Deployment Solutions (RDS)

HANA Platform

Suite Capabilities Shared Service Center Working Capital

Management Governance Risk and Compliance Commodity Risk Management

SAP Cash Management powered by SAP HANA Source: SAP, 2014

S/4HANA FinanceBPC optimized for SAP

S/4HANA

Enterprise Management

36

SEM

BW-BPS

SEM-BCS

BW-IP

OutlookSoftBPC MS

5.1

BPC MS

7.x

BPC NW

7.x

BOBJ

Cartesis

BPC MS

10.0

BPC NW

10.0

(Extended Analytics

Analyzer influence on the

EPM Add-In)

Renovated

Planning

2005 2010 2015

(BPS and

BCS)

10.1 NW

Standard

10.1 NW

Embedded

BPC optimized

for S/4 HANA

Finance

BOBJ

FC

10.1 MS

ERP

© TruQua. All Rights Reserved.

C4PHANA

Getting to BPC Optimized for SAP S/4HANA FinanceThe Evolution

38

Consolidating in Real Time with BPC and SAP S/4HANA in 1610

• Real-Time Consolidation (RTC) released in SAP S/4HANA 1610

• Consolidation Monitor as before but with configurable and data submission status tasks

Source: SAP

Available in 1610

39

Envisioning the RTC Data Model in 1610

• Newly introduced table ACDOCC for financial consolidation postings

Consolidation Table (ACDOCC)

1. Org. Info. 2. Version Info. 3. Doc. Info. 4. Account 5.Quan 6.Amount 7. Tran. Info. 8. Additional Info.

3. Doc. Info.

Doc. TypeDoc.

NumberLine Items Fiscal Year Period User Dates Status

2. Version Info.

Model BPC Cat. Ledger Cat. Version Valuation

1. Org. Info.

Comp.

CodeComp.

Profit

Center Seg. Business Area Cost Center Partner XXX Group1 Group2 Group3

4. Account Info.

Group CoA Group Acc.

7. Tran. Info.

BPC

rules

BPS Task

Type

Tran. Type

(BPC Flow)Audit Bus. Tran. Type Ref. Doc.

6. Amount

Loc. Curr. Tran. Curr. Global Curr. Group Curr. CO. Obj Curr Amount1 Amount2 Amount.3.

5. Quan

Base Unit. Ref. Unit Val. Unit Add. Unit Quant1. Quant.. Amount

8. Additional Info.

Plant Mat. No. Vender Customer Asset. ProjectFixed

CO-PA

Source: SAP

Available in 1610

40

What We’ll Cover

• SAP S/4HANA evolution

• Universal Journal impacts to functionality

• SAP S/4HANA key functions and features

• BPC optimized for SAP S/4HANA impacts to functionality

• Wrap-up

41

Demo: SAP S/4HANA Finance in Action

42

Where to Find More Information

• SAP S/4HANA Finance on the SAP Help Portal

http://help.sap.com/sfin

• SAP Line of Business Solutions Page

http://go.sap.com/solution/lob/finance.html

• Janet Salmon, “SAP Accounting powered by SAP HANA – Frequently Asked Questions”

(ERP Corp, July 2014).

www.erpcorp.com/sap-controlling-blog/entry/sap-accounting-powered-by-sap-hana-

frequently-asked-questions

• Jens Kruger, SAP S4/HANA Finance: An Introduction (SAP PRESS, 2016).

www.sap-press.com/sap-simple-finance_3793/

• SAP S/4HANA Business Suite Information Portal

http://go.sap.com/product/enterprise-management/s4hana-erp.html

43

7 Key Points to Take Home

• SAP S/4HANA Finance is an innovative new solution which can simplify enterprise financial processes,

reduce complexity, and provide real-time analytical and planning capabilities

• Reduced data redundancy – The duplication of entries using the normalized tables is reduced due to direct

storage in the ACDOCA table. The simplified design of master data – GL accounts, business partners,

improves the maintenance and governance

• Real-Time Data Reconciliation – The general ledger entries co-exists with the sub-ledger entries – asset,

material – and controlling entries in the same table

• Simplified Reporting – Since the data from different sources of financial impact is now stored in one table,

reporting becomes faster and easier

• Faster period-end closing – The accounting teams are better equipped for re-designing their period-end

process for a faster closing of books

• Improved Profitability Analysis – Using the new features of cost component splitting and ACDOCA coding

block the Account-based CO-PA helps to overcome reconciliation issues with Costing-based CO-PA

• The SAP HANA design reduces the complexity of the flow of values and data structures

44

Your Turn!

How to contact me:

Sonam Pawar

Email: sonam.pawar@truqua.com

Twitter: @TruQuaE

Please remember to complete your session evaluation

45

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