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Hello Folks (Incl. SAP ERP Financials – Controlling, SAP ERP Financials  – Asset Accounting)

Good day to all of you!!

I always wondered on what topic one can write a blog in the SAP Financials forum, though I have written some of them in the Career Center. So, a big thanks to SAP for giving me a reason to write a blog in this favorite space of mine. And a even bigger thanks for taking this wonderful initiative to simplify the way ERP Financials are looked at.

We have been hearing a lot of buzz since later part of 2014 about Smart Finance, Simple Finance, Simple Finance Add-on, etc. I was as curious as you all to know about it and was putting efforts towards that. But to come up with a knowledge-sharing document without understanding the subject myself is something very difficult for me. Today, I feel, I am somewhat equipped to do this. Hence, would like to take this initiative.

First lets understand what  these new terms are. I personally feel this whole initiative as a backward integration of SAP ERP Financials with the HANA capability, with the ultimate objective of reducing the database footprint, faster close, faster and better reporting, improved cash management, ever-reconciled data and Integrated planning. As of now, I see more of the structural /  architectural changes than the changes in the functionality per se. I would intentionally stop short of quantifying the  both in terms of a %, because that’s not the objective of this blog

This initiative was earlier termed as SMART FINANCE. However, later renamed as SIMPLE FINANCE. I attended one of the SAP’s Boot Camps on Simple Finance and the convincing reason that was offered was that naming the new version as Smart Finance would mean that the earlier one was dumb. So, that’s how Simple Finance was born.

Now lets understand the terms Simple Finance and Simple Finance Add-on.

 

     SAP Simple Finance: is a managed service in the SAP HANA Enterprise Cloud. To make it a simple, it is a cloud based solution, that includes a new financials core as part of SAP Business Suite powered by SAP HANA.


     SAP Simple Finance Add-on: For those customers who don’t want to be on Cloud, but prefer an On-Premise solution, SAP offers the Simple Finance Add-on, so that they too can benefit from the related innovations to facilitate a financials transformation.

SAP suggests the Cloud based solution as the preferred deployment option. But nevertheless, one can have SAP HANA On-Premise as well.

Lets now move on to the next aspect of the blog.

There would be the typical Qs in every mind. Is the new solution stable? Is it going to be the future-next? What is the road-map for future? Do we get all of the existing functionality in the new offering?

 

      To answer some of them, fully or partially, SAP has taken a bold decision to be the first live customer of this initiative. YES!! You heard it right!! SAP itself has migrated to the new offering before offering it to SAP Partners and Customers

     One need not doubt SAP’s capability to offer stable & integrated solutions. Like any other software, this might have its own teething issues, but surely seems to be a promising one. Some of the existing functionality might not be present in the new offering whereas there might be some awesome improvements as well.

     As of now, I see good amount of changes in the Asset Accounting (one of my favorite topics in SAP). For those functionalities which are not present as of now in the new offering, I am very hopeful that they will be added sooner or later

Lets now understand the scope of Simple Finance and Simple Finance Add-on

The scope of Simple Finance (the cloud based solution) looks like this:

Screen Shot 2015-04-17 at 11.36.54 AM.png

And the scope of Simple Finance Add-on (version 1.0) looks like this.

Screen Shot 2015-04-17 at 11.46.38 AM.png

Version 1.0 of the Simple Finance Add-on was launched in 2014 and the version 2.0 is launched in 2015 very recently. This should again put to rest some of the concerns about the future road-map of this new offering.

This blog and the next in series will primarily focus on the Simple Finance Add-on 1.0 to demystify what it offers, what’s new, what’s missing and how does it benefit a SAP customer.

Some of the highlights of the add-on 1.0 are listed below

a. Revamped Asset Accounting: Simplifies the concept of depreciation areas, parallel valuation in asset accounting and facilitates parallel reporting by means of ledger approach as well as accounts approach

b. New GL mandatory: Classic GL no longer supported in Simple Finance. One has to be on New GL. (Need not be full fledged New GL. Lite version of New GL would suffice)

c. Concept of Data Archiving replaced with Data Aging (Hot / Cold Partitions of the Database)

d. A brand new Cash Management Solution, powered by SAP HANA

e. New Asset Accounting is mandatory. Classic AA no longer possible in the  new offering

f. On-the fly summarization reports (from line items)

g. Good amount of overhaul in the Key SAP tables.

h. Option to split COGS in the FI-GL as per the Cost Component Split, etc

Simple Finance Add-on 2.0 will unleash some new changes. Material Ledger is covered in the add-on 2.0 and it is expected to change the way GL / Cost Element master is looked at.

Hope you find this blog useful and it awakens the interest in you to know more about the new SAP offering.

Do share your feedback about the blog at the end of your reading. Do leave your comments / Qs which might help in structuring the documents next in-series.

Yours enthusiastically,

Ajay Maheshwari

PS: Link to second document in series is this.

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60 Comments

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  1. Sanil Bhandari

    A very informative blog. Having seen the Fiori Apps on Simple Finance 1.0  like CFO Dashboard, Customer /Product Profitability reports has definitely awakened a lot of interest for myself in the new offering

    regards

    Sanil Bhandari

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  2. Shiva Maryala

    Hi Ajay,

    To add some more information to this:

    We will have a logical document in SA38 : FCO_LOGICAL_DOCUMENT which will have all the fields of FI CO and COPA of document.

    We can  browse to table from structures / views using the tab Table / Join Conditions.

    We will have back up tables which will have all data of SAP FICO before migration to Simple Finance

    CO : XXXX_BAK

    FI :   XXXX_BCK.

    Thanks,

    M.Shiva Kumar

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  3. Sridhar Bolisetti

    This is wonderful Ajay.  Thanks for sharing.

    It has helped to understand Simple Finance in a simple manner rather than too technical jargon used by people involved in the development of the software.

    It seems Simple Finance is going to be the future and we all need to learn & implement it sooner or later.  Waiting for more series from you and I will also try to contribute by reading more in other platforms about this subject.

    Regards,

    Sridhar

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  4. Surya Varma

    Dear Ajay,

    Thanks for useful insights and sharing them with us. Your foray into this uncharted area gives people like me a beacon of hope to enter and follow in your footsteps.

    BTW how do you master/know so many things 😎

    Best Regards

    Surya Varma

    (0) 
  5. Srinivasa Velupula

    Hi Ajay,

    Thanks a lot for sharing this very useful information on SAP Simple Finance.

    To share some more information which I have read in one of the forums…

    1. Account Based COPA has been enhanced in SAP Simple Fiance to provide detailed information on the Cost of Goods, Production Variances and invoice quantites that were previously only available in costing-based COPA. Does this mean that SAP is more focusing on account based COPA rather than costing based COPA.

    2. We can split the production variances categories by general ledger account. Earlier we can only assign on GL account for all the production variances and now in SAP Simple Finance we can split the variance categories by GL account, which is very good. I have seen so many clients asked for this requirement.

    Thanks,

    Srini

    (0) 
    1. Huyen Tran

      Yes, account based COPA has been enhanced in simple finance but costing based has not- it stays the same. You have 2 options: run in costing based in parallel with new account based COPA, or move to new account based COPA for full of new capacity.

      (0) 
  6. Subash Krishna

    hi Ajay,

    I would like to know if we can migrate from ECC 606 to S4HANA and sFIN and then do BPC? Is it mandatory that we have to have BW HANA for BPC to work? Or can we connect to SAP Business suite or S4HANA with Simple Finance environment can be used to deploy BPC? I also want to understand how Central GL could be leveraged to get the multiple ledger and actual data consolidation of Finance data that are currently available on 7 different ERP backend systems, including SAP ECC 606.

    So, the question is (in other words) how do we get the best of Central GL, sFIN and S4HANA and ultimately BPC?

    I would appreciate if you could throw some light onto this scenario.

    Thanks,

    Subash

    (0) 
    1. Ajay Maheshwari SAP Trainer Post author

      Hi Subhash

      My knowledge about S4/Hana is limited. So wont be able to answer your Q well

      Central Finance feature of SFIN Add 2.0 should help you to harmonize multiple SAP / Non-SAP landscapes, for sure

      Br, Ajay M

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      1. Subash Krishna

        Hi,

        That’s no problem Ajay. I have been looking at various options for our organisation. These new tools are very good;but we need to get it in the right sequence to make the most of it. Central GL is new version of New GL with sLT tool to get the data from anyDB systems, including SAP. Once we get the data in there, we can easily do the consolidated financial reporting for large corporates. However, the major gaps are in I/C elimination, consolidation processing that we see in BPC, for which we need BPC. However, the BPC we have seen so far works only on BW HANA. Not sure if it would work on SAP Business Suite on HANA with Central GL and Simple Finance on it; or S4/HANA with Simple Finance on it. The main question is around whether BPC should have BW 7.3 on HANA as a pre-requisite.I will post this to other SAP experts and see if they can help me. And if I do get any response I will come back and update this blog Q&A section.

        Thanks,

        Subash

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        1. mauro b.

          Dear  Subash,

          did you manage to find an answer to your question? We are also moving to EHP7 + SFIN and interested in implementing BPC. The idea to implement BW is quite unacceptable from our point of view.

          Best,

          Mauro

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          1. Subash Krishna

            Hi,

            Not yet. We are exploring the various options. But,just to let you know, we already have BW on HANA. So, BPC could easily sit on top of that without having to do SAP-HANA as such. But, we will have to upgrade the patch to EPH7, then do the code conversion to HANA, if we want to move our ECC instance also to HANA, before we do Simple Finance. We have a large pool of ERP systems, so central Finance could be another option on a side car that has S/4 HANA, with BW on HAND and BPC in parallel.

            Still thinking about it since it is going to be costly!

            Thanks,

            Subash

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  7. Luis Calvo

    Thanks Ajay,

    To share it with us. I am just starting to learn about Simple Finance and maybe you could recommend me an elearning training from the SAP Learning hub that I could take.

    Regards

    Luis Calvo

    (0) 
  8. Dareal Michael

    Ajay,

    Simple yet very informative. I really look forward for a participation at the Simple finance deployment to appreciate it to its core.

    Thanks again for a valuable blog.

    Regards,

    Dareal

    (0) 
  9. Jaymin Bhatt

    Hi Ajay,

    I got a chance to have a look over the initial presentation on HANA sFIN, few surprising fact came to onboard was about:

    SAP Note: 1968568

    SAP Help Portal for Simple Finance:

    SAP Simple Finance Add-On for SAP Business Suite powered by SAP HANA – SAP Help Portal Page

    a) Elimination of Cost Elements

    b) More focus towards Account Based CO-PA

    c) New GL Lite Version

    d) Faster Closer of Books

    Definitely the list is long, but it seems more interesting to have a dive in Simple Finance.

    And the next to come is “Simple Logistic”

    BR, Jaymin R. Bhatt

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  10. Gaurav Tibrewal

    Hi Ajay,

    Very good document explained in simplest manner 🙂

    Looking forward to get more such informative blogs from your side on simple finance.

    Regards,

    Gaurav

    (0) 
  11. Subhrajit Dutt

    This is a very nice overview on Simple Finance. As usual Good job ! 🙂

    New Cash Management which comes along with Simple Finance is a good opportunity in SAP treasury space. Looking forward to learn it.

    (0) 
  12. Phani Veera

    Hello Ajay

    Good to understand in simple terms. Are there any industry specific add-ons in simple finance? Or just the frame work that you have provided insight to?To which groups(industries/companies) can we have this suggested to?

    Regards

    Shekhar

    (0) 
    1. Ajay Maheshwari SAP Trainer Post author

      Hi Shekhar

      Thanks for the feedback.

      Simple Finance in its present version applies to most of the Industries and it will be extended soon to all

      If you using JVA (OIL or Mining), then probably you must wait, because SFIN’s New Asset Acc is not yet compatible with JVA

      Br, Ajay M

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  13. Phani Veera

    Hello Ajay

    Greetings!!!

    I am just going through a few documents on simple finance and the concepts like Universal Journal and Continuous Reconciliation and Real Time Profitability completely change the dynamics of traditional SAP practice and offer a much simplified approach,lot of things will be changing I guess…another revolution…. 🙂

    Regards

    Phani

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  14. mauro b.

    Any news about material ledger on account-based copa? Any hope to have a similar behavior as cost accounting copa?

    Also, at the time being it’s not possible to plan sales in accounting-based copa (not allowed to use KEPM features): is anyone handling this in someways?

    Best,

    Mauro

    (0) 
  15. Anisa shashe

    Hello Ajay.. sure simple finance will be good especially for user.. What I want to ask is.. Is it possible with that “simple finance” will drown employee skill about finance and accounting. If that’s happen, is it bad? or will not change anythings?

    Thank you for giving attention to my question..

    Regards,

    shashe

    (0) 
  16. Amit jha

    Ajay Sir,

    Thanx for this amazing informative blog.You have a very peculiar set of skill, to make people understand in a simple way.

    (0) 
  17. Pankaj Bhalerao

    Thanks Ajay Sir for sharing Simple Finance key concpets via blog. It was really informative to have Q’s and doubts clear about Simple Finance here.

    All the terms are exceptionally cleared.

    Thanks again.

    Regards,

    Pankaj Bhalerao.

    (0) 
  18. Jay F

    Great content Ajay, thanks for sharing. Do you have more documentation on cross company CO allocation in S4Hana 1511 and the impact on Finance? thanks

    (0) 

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