There are lots of things to be aware of when you are thinking about moving to the new SAP S/4 HANA. You should be aware that it’s not an upgrade, we are talking about a suite transformation.

One of the most important innovations in the new SAP Business Suite, is the simplified data model, which has particular impact on the financials area of your existing suite.


If you are don’t have access yet to an S/4 HANA system or you want to set the foundations of what to do in order to transform your landscape, don’t miss this blog from my colleague Owen Pettiford

If you are not using SAP Process Orchestration for this task I recommend taking a look at the features available

Don’t be daunted, but be aware that there are some “to dos” before your SAP S/4H go-live

1. Universal Journal, this massive simplification completes the circle that started with the initial simple finance add-on.

The classic R/3 structure could be represented as one single link, at a header level between FI and CO. That constraint created more complexity for reconciliation purposes in the first instance and secondly for interrogation of the information. The result being the creation of summarization and index tables.


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The Simple Finance add-on was merely an intermediate step, including POSNR (Position Number) and AWKEY field for reconciliation purposes between the different financial tables and analytical areas.

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With the Universal Journal, the simplification has gone much further. We are now in front one of the major simplifications thanks to HANADB and its in-memory capabilities.

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Major impacts of this innovation are, from my perspective, at a change management and data governance level. Because the data model is different, the approach to some of the classic problems should be different:

Secondary elements are now G/L accounts.

Accounting principles are now at a company code level.

If the fiscal year differs, you will need to use ledgers to represent parallel accountings.

2. Only customers with customer/vendor integration in place can move to SAP S/4HANA.

To ensure a successful conversion to the new SAP S/4HANA, all customers and vendors should be first converted into business partners. This is also true for the business partners that are already in use. When the customer/vendor transformation process is triggered, the system posts all required fields into the business partner.


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SAP OSS Notes that will help you through the process:

2211312

2216176

1623677

Major impact on the master data governance area.

3. The account based CO-PA switch should be turned on.

Don’t be afraid, but be aware that SAP allows to have both switches on. Therefore, you will only need to activate the account to start using SAP S/4HANA.

  • Costing- based: groups costs and revenues using value fields
  • Account-based: it’s organised in general ledger accounts and is always reconciled with Finance.
  • Combinations: Costing- Based + Account based

Custom fields (equivalent to CE1XXX old tables) are still allowed, they need to be handled in the new universal journal table ACDOCA, which will give you instant insights and easy extensibility. Derivation rules are still available.


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“The don’ts”, no option to include calculated fields as per example freight insurances.

4. Material ledger is mandatory for classic material valuation.

I’m aware or at least my experience tells me that the use of material ledger is not massively extended to Europe. For the new SAP S/4HANA this will be mandatory. This feature will give you the ability to carry material prices in multiple currencies/valuations, and the actual costings to your organization.

How will this impact my organization, once we activate material ledger?

  • New net customers can activate Material Ledger during migration/Go-Live.
  • Existing customers without ML can activate Material Leger during migration/Go-Live as well. 

  • For existing customers with active ML but not using transfer prices, migration program transfers data to the new S/4HANA tables. 



Do I need to change material valuation strategy approach?

This is clearly a don’t. SAP still recommends the classic approach.

Another don’t: transfer prices are not yet supported in SAP S/4HANA.

(S- price) Standard price still recommended for manufactured goods. The major innovation is that parallel updates are supported and application logs removed.

(V- price) Moving average price will be used for purchased materials and services. Application locks are still in place to ensure continuous consistency.

(PU-price) Actual costing based on Material ledger

  • Balances per material and inventory account in up to 3 FI currency types: company code, Group, a third FI currency type.
  • All balances are updated in the new ACDOCA table.
  • Currencies defined for the leading ledger in Financial Accounting will be used.
  • No separate currency customizing in Material Ledger 


Material Price Analysis will work as expected. However, displayed data from aggregated data sets (MLCD) and then drilled down to the document level (MLIT, MLPP) will be now read from the universal journal (ACDOCA).

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5. Revenue recognition with SAP Revenue accounting

The existing SD-RR solution cannot be used for new IFRS15 accounting standards. This new solution includes enhancement in account determination to be compliant with IFRS15/ ASVC606.

SAP OSS notes

  • 2225170 – S/4 HANA SD-Revenue Recognition

  • 2227824 – S4/HANA Pre-check for SD-Revenue Recognition

Custom code will no longer work in S/4HANA

Revenue Accounting determines the G/L accounts to be posted for order items using an extended account determination (OKB9)

Below is a useful link to review all the pre-checks necessary for your next step to digitalization.

https://uacp.hana.ondemand.com/http.svc/rc/PRODUCTION/pdfe68bfa55e988410ee10000000a441470/1511%20000/en-US/CONV_OP1511.pdf

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6 Comments

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  1. Monika Patel

    Great blog….

    Few Questions :

    1) Is there a similar blog wrt SAP S/4HANA 1511?? – The do & dont’s of Finance in S/4HANA 1511.

    (2) Were you able to check the process and inter-linkages wrt ACDOCA & MATDOC ?

    My understanding that “at some point in time” these TWO tables will become the BASE for “integrated End to End Multi-dimensional Reporting view” – covering dimensions from logistics and finance reporting

    (3) For Finance – which version would you suggest & WHY ??

    My reference of ask :

    SAP S/4HANA — Choosing the RIGHT “END Release” —> 1503/1605 vs 1511/1610

    (0) 
    1. Xavier Herce Post author

      Hi Monika,


      Thanks for your comments. Some of them a bit challenging. I will try to answer one by one your questions.

      1) Is there a similar blog wrt SAP S/4HANA 1511?? – The do & dont’s of Finance in S/4HANA 1511.

      I would say that the best way to keep on track on the S/4 HANA innovations and versions, is by following SCN blog specifically dedicated to that issue: http://scn.sap.com/community/s4hana/

      Within that, I will specially recommend to follow Sven Denecken blog (http://scn.sap.com/community/s4hana/blog/2015/12/18/sap-s4hana-validation-workshop-in-walldorf-from-december-15-17)

      and Owen Pettiford’s blog (https://scn.sap.com/community/s4hana/blog/2015/12/23/beginners-guide-to-transitioning-to-s4hana-1511-for-existing-sap-erp-60x-users)


      (2) Were you able to check the process and inter-linkages wrt ACDOCA & MATDOC ?

      My understanding that “at some point in time” these TWO tables will become the BASE for “integrated End to End Multi-dimensional Reporting view” – covering dimensions from logistics and finance reporting

      On help.sap.com menu there’s plenty of information. A part from that I will suggest to check OSS notes. The main rule to apply here, is that all the aggregate and index tables have been removed and substitute by HANA views. In terms of reporting, the multidimensional reporting is already available (from 15111) as per HANA is a columnar in memory database therefore all columns are susceptible to be a charactersitic to use in your reporting. A part from that, SAP Hana Studio provides you with HANA modeler where you will be able to model your data and expose it to third party solutions 

      (3) For Finance – which version would you suggest & WHY ??

      It depends, for example, there’s a variety of factors to choose on or another path. Cloud/ On premise

      Both solutions could be suitable for you but maybe if you are in a heavy manufacturing industry the solutions is not mature enough yet. if you are on the professional services are, you may want to choose the cloud editions… So it’s not a unique answer here.

      Very best regards,


      Xavi

      (0) 
  2. Thorben Hald

    Great blog!

    One question to you:)

    With ML and multiple valuation do you know if there are any changes to the integration into the parallel ledger setup?

    I have always thought that ML and multiple valuation is awesome BUT it has always been a constraint I believe that you cannot specify that for example group valuation is only updated in the leading ledger (for group reporting) and that local valuation is only updated in the local ledger – for example.

    Have you seen a change in this – that you can actually update ledgers based on valuation?

    (0) 

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