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                                      SAP S/4 HANA

Evolution

R/2 (Year 1979) –> R/3 (Year 1992) –> ERP (Year 2004) –> SAP HANA (Year 2011) –> SAP Simple Finance powered by SAP HANA (Year 2014) –> SAP S/4 HANA (Year 2015)

Introduction

SAP S/4 HANA is an in memory platform which uses simplified data model with new user experience powered by SAP Fiori, Advanced processing and Guided configurations.

Salient Features

1. SAP Fiori – SAP Fiori Launchpad is the single entry point for the user to interact with the SAP system. It is role based and persona centric. Users access that application which are specific to their role within the company and allow them to perform the specific tasks as per their requirements.

FAQs on SAP Fiori

i). Can SAP Fiori work on different devices like Desktop, Tablets or Smart Phones?

Solution – SAP Fiori works seamlessly across devices. It offers a stable URL for bookmarking and sharing and as it is browser based, it works with multiple devices and browsers.

ii). How is SAP Fiori Launchpad designer used?

Solution – SAP Fiori Launchpad designer can configure tiles for static and dynamic apps creation. Tiles remain on user home page which can be accessed for carrying out regular tasks and for receiving information directly from the front page without opening the application.

iii). XYZ Inc. recently implemented SAP S/4 HANA. As a consultant help one of the users to create his own tile for posting a non PO Invoice.

Solution – In the SAP Fiori Launchpad, choose the Personlized Home Page button

– In the My Home Group, Click +

– Search in the Tile catalogue as “Create Incoming Invoices”

– Enter relevant invoice details such as company code, vendor, amount, tax code, posting dates

– Choose Post

2. Guided Configuration – This is also known as “System – Driven” implementation. SAP provides a ready to run business processes based on best practices that can be activated. During the activation system configures itself. S/4 HANA Guided configuration facilitates customers to personalize the processes delivered by SAP.

3. Simplified Data Model – The data model has been simplified. This means unnecessary tables and the data of those tables have been removed in order to shrink the data footprint. As an example of the reduced data footprint, you can move from a 7 Terabyte database down to S/4 HANA system which requires less than 1 Terabyte.


                           SAP S/4 HANA Simple Finance 

Introduction

SAP S/4 HANA Finance is the add on product that is installed on top of SAP business suite and updates on the Financial Architecture.

Salient Features


1. The New Universal Journal – A single source of truth for all accounting components. Each posting creates line items in the universal journal table that combines all data entered in the different financial structures into single source.


GL Line Item Tables + COPA Tables + Controlling Tables + Asset Tables = UNIVERSAL JOURNAL (ACDOCA Table)

Factor Without Simple Finance With Simple Finance
Source of Truth Multiple Single
Speed Slow Fast
Reconciliation Effort High Very less
BI Extractors Multiple Single
Memory Requires High Low


FAQs on The New Universal Journal

i). XYZ Inc. is planning to move to S/4 HANA Simple Finance. Client’s IT is concerned what will happen to their custom programs and interfaces which are based on traditional finance tables like FAGLFLEXA or BSIK or COEP. Outline the most important architectural changes in financials with SAP S/4 HANA.

Solution – One of the basic promises and focus of SAP S/4 HANA development is to provide a product that does not disrupt the business processes. Existing programs and interfaces can still be used through generated compatibility views. All the classic tables have been replaced by compatibility views that use data directly from the universal journal.

ii). Can Universal Journal be extended for new custom fields?

Solution – Yes, it can be extended with custom fields. Extensibility is available for all components that use Universal Journal (G/L, CO, AA and ML). This includes extensibility for COPA characteristics.

iii). Can BSEG accommodates more than 999 line items per document under S/4 HANA?

Solution – BSEG is maintained as it was earlier. It is not affected by the new architecture. BSEG is still limited to 999 lines per document but you can summarize those line items and have up to 999999 analytically directly in ACDOCA Table.


2. Merge of Accounts and Cost Elements – In traditional model, G/L accounts are maintained separate to cost elements. With the move to Simple finance, you need to maintain only G/L accounts. While creating G/L account, user is required to select G/L Account Type which in turn is mapped to Cost element category.


FAQs on Merge of Accounts and Cost Elements

i). Your company needs to create a primary cost account under new model. What are the steps for creating GL Accounts and Cost Elements?

Solution – Under new model below steps will be followed for creating GL and cost element:

– In the SAP Fiori Launchpad, choose “Manage GL Account Master Data”

– One the new account screen enter GL account number, Description, Chart of Accounts and GL Account Types as Primary Costs of Revenue. This will create GL at Chart of Account Level.

– Now go to Company code level. Select Account Currency, Cost Element Category, Field Status Group and Company Code

– Cost Element will get created once GL Account is saved. Make sure to assign default cost object from transaction OKB9



3. Extension Ledgers – Extension Ledger is assigned to a standard ledger and inherits all journal entries for the standard ledger for reporting. Postings made explicitly to an extension ledger are visible in that extension ledger but not in the underlying standard ledger. An extension ledger stores delta values and points to another ledger thus providing a flexible mechanism for adjustments entries at month/ year end.


4. New Asset Accounting – New Asset Accounting is the only asset accounting solution in SAP Simple Finance. Classic Asset Accounting is not longer possible. Configuration and activation is at the client level. Both valuation approaches are possible – Ledger Approach and Account Approach.


Key Changes


a). Ledger Approach – For an integrated asset acquisition posting under Ledger Approach, the system divides the business transaction into an Operational part and a Valuating part. Operational part refers to Invoicing part where the system makes a posting to all ledger groups against the technical clearing accounting. For the Valuating part, the system generates ledger group specific documents.


Ledger Group Operational Part (Vendor Invoice Posting) Valuating Part (Asset Posting with Capitalization)
All Ledgers

Technical Clearing Account               Debit

Vendor                                               Credit

—No Posting—-
IFRS Ledger —-No Posting—-

Asset                                          Debit

Technical Clearing Account       Credit

GAAP Ledger —No Posting—-

Asset                                          Debit

Technical Clearing Account       Credit


b). Account Approach – Under Account Approach, the account is posted to Contra Account. Acquisition Value Posting is assigned in the account determination instead of Technical Clearing Account.


c). Transaction Types – To post transactions such as corrections, you no longer need a transaction type limited to specific depreciation areas. You can choose the accounting principle or depreciation areas directly in the transaction views.


d). Balance Carry Forward – For year end closing there is not separate balance carry forward needed in Asset Accounting, the general balance carry forward transaction of FI will transfer asset accounting balances by default.


e). New Depreciation Run – Determination of depreciation and posting happens asynchronously in two separate steps. Planned depreciation is determined and updated with each asset master record change and each posting to the asset. The depreciation run posts the pre-calculated planned values.


FAQs on New Asset Accounting

i). XYZ Inc. is planning to implement Simple Finance. Can they continue to be on Classic Asset Accounting?

Solution – New Asset Accounting is the only asset accounting solution in SAP Accounting on SAP HANA. Classic Asset Accounting is no longer available.

ii). Users of ABC Inc. recently implemented Simple Finance. They are looking for your advice on how to post $200 transport cost in local GAAP Ledger only on Asset Invoice.

Solution – To post a transaction such as corrections or adjustments for local accounting rules requirements, you no longer need a transaction type limited to specific depreciation areas. You can direct the user as below:

– In the command field, run transaction ABZOL

– Choose the accounting principle as LG (Local GAAP) and Depreciation Area directly in the transaction view

– Enter the other asset related data and click on Post

iii). For an integrated asset acquisition posting, system divides the business transaction into an operational part and a valuating part. Which part posts to all ledger groups?

Solution – Operational Part which posts technical clearing accounting against Vendor Invoice will post to all ledger groups.

iv). What are the benefits of integration of asset accounting with Universal Journal?

Solution – Universal Journal integration with Asset Accounting will provide below benefits:

– No redundancy in data storage

– No reconciliation step in financial close required as FI and AA will get reconciled by design

v). Which classic asset accounting reports will become obsolete after New Asset Accounting Implementation?

Solution – Periodic APC Postings (Program – RAPERBxxxx), Reconciliation Postings (Program – RAABSTxxxx), Fiscal Year Change (Program – RAJAWE00), Post Depreciation (Program RAPOSTxxxx)


5. Central Finance – It offers non – disruptive step towards system consolidation. It helps companies report financial numbers sourced from different systems.


How does it work – Data is replicated into the Central Finance instance using the SAP Landscape Transformation Server (SAP SLT) which can be on premise or on cloud. It pulls the data directly from SAP and non-SAP databases without having to adapt to their programs.


– Master Data – Master data is mapped either using SAP Master Data Governance (MDG) or any other MDG solution which can be in the same system or somewhere else in the landscape. There is also a Business Add in (BAdi) which can be used for customer specific mapping logic.


– Transactional Data – Through SLT there are 3 interfaces that feed from Source systems: Interface for Reposting FI/CO postings, Interface for CO Only Postings, Interface for replicating transactional cost objects such as Process orders, Internal Orders, etc.





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