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S/4HANA In-Place System Conversion Blog Series 07/10 : Finance Conversion

I am S/4HANA evangelist and support customers on their HANA journey. Recently I completed a project for S/4HANA conversion and through this blog series I want to take you through my project life-cycle; How to start, plan and execute; What to keep in mind and watch out for. This is topic #7 of  10 part blog series.

As you are proceeding to further read this blog series, it means you have decided that in-place system conversion is the right option for you and you have executed and resolved the SI Pre-Checks, completed CVI activation, SUM DMO Downtime and custom code remediation and ready to start the FIN Migration.

Simple Finance Add-On was the first innovation done on HANA DB (version 1503) and subsequently the same design was adopted into S/4HANA Enterprise Management too thus the add-on specific data migration steps for Simple Finance were retained in S/4HANA EM as well. That is why Finance data is not migrated as part of SUM DMO but is done manually subsequently. As you know, finance innovation in S/4HANA broadly involves:

  1. Actual line items in FI-GL, AA, CO are stored in Universal Journal Table ACDOCA and Material Ledger is stored in MLDOC table.
  2. No reconciliation between sub-ledgers is necessary due to real-time integration in ACDOCA.
  3. Totals tables & secondary indices are removed and instead are reported by aggregating line items on the-fly from ACDOCA.
  4. Statistical/planned values are still stored in other tables and BSEG too is updated for open items.
  5. Read access to the former totals/deprecated tables is maintained via compatibility views on ACDOCA. Additional impact to custom code can be remediated referring to OSS notes 1976487, 2219527, 2221298, 2185026.
Figure 1 : Finance Migration in System Conversion (Source SAP)

During the SI Pre-Checks, if errors are reported for template company codes, you can exclude them from SI Pre-Check output by maintaining the list of template company codes in transaction FINSC_CO_CD_TEMPLATE. In addition to SI Pre-Checks, you also execute the data consistency check reports for FI and MM (as listed in the above diagram). Transaction code FINS_CUST_CONS_CHK_P can be used to check the customizing consistency,

Finance Migration Core (Covering New Asset Accounting, General Ledger, Cost Elements and Material Ledger) – Finance Conversion Guide (available as attachment in OSS Note 2332030) provides you with detailed step by step instructions for the Core Finance Conversion. This has three broad steps:

  1. Preparation and Migration of Customizing: To migrate the customizing from old design to new simplified design including any additional customizing for new S/4HANA features.
  2. Data Migration: To transfer the transaction data from old data model to S/4HANA data model using Finance Migration Cockpit. Please note that posting of finance transactions is blocked in a newly converted system and only when the step ‘Set Migration to Complete‘ is executed, the system will allow you to post finance transactions.
  3. Activities after Migration: If the Finance migration is Set to Complete with some known errors, those pending records can be migrated in this step including other optional activities that are not mandatory during downtime e.g adding the detailed line items to ACDOCA, update of offsetting account, due dates, movement of backup tables to cold area etc.

I would strongly recommend that the finance consultant who will be executing this finance migration in production, must have gone through the latest version of the finance conversion guide and also read the documentation of each node (SPRO -> Conversion of Accounting to S/4HANA). You will encounter errors during the various Preparation and Data Migration Steps, refer to OSS Note 2714344 for the explanation and resolution of most common errors. Post all resolutions, the final set of errors that you accept can be included into transport request using program FINS_MASS_DATA_MONITOR_MSG_TRA so in the subsequent system you are not required to repeat the same analysis again for same errors.

As with CVI Logs, Finance Conversion Logs too are stored as Application Log thus analyzing the same could be a tedious activity. I recommend developing a small utility for the same that will also help during the final cutover to maintain the schedule.

As with CVI Cockpit, to help optimize the performance, SAP offer parallelization of data migration execution in Finance conversion too but with the help background jobs here. So you can check the status of the same in SE37 and check the job logs too. You can initially set the number of parallel jobs for each migration step during ‘Preparation and Migration of Customizing -> Set Number of jobs for Activities in Master Data Framework’ or adjust the number of parallel jobs for active step using ‘Data Migration -> Start and Monitor Data Migration -> Control‘ depending on the CPU utilization which should not exceed 85%. Also as a thumb rule you can have more parallel jobs for read steps (upto 40) and less number of parallel jobs for write steps (to avoid lock contention).

Finance Migration Additional

  1. House Banks: House Bank Migration is though straight forward, it follows the new S/4HANA design and if any errors are encountered during migration (House Bank master data in ECC is split in S/4HANA into 1) House Banks which is FI12 configuration activity transported from Dev to Prod and 2) Bank Account Maintenance NWBC App which is maintained directly in respective systems), records are marked as ‘Inactive’ hence not available for transaction processing. They will need to be activated manually using the NWBC app before they can be used in transaction. In addition, SAP has a very specific logic (Bank Account + Bank Country Key + Bank Key + Currency will have the same description) to bring over the House Bank descriptions onto S/4HANA (while House Bank Description is not printed on any cheque, but business will have to cleanup the description if they want to see particular value in S/4HANA)
  2. Credit Management: Credit Management migration includes 3 core steps 1) Migrate Credit Management Master data from KNKK to Business Partners; 2) Migrate the Credit Exposure from S066/S067 table to UKM_ITEMS and 3) Initialize/Reconcile Documented Credit Decisions (DCDs)(You can evaluate if you really want to use DCDs or not and if you do not want to use it, you can deactivate it via core code mod in FM UKM_IS_ACTIVE by raising OSS Incident with SAP). While the standard migration process works like a charm but there are differences between the SD-Credit Management and FSCM especially for Master Data where only Parent Credit Accounts are migrated (during step1) thus the Credit Account Hierarchy is not migrated and a few other fields are picked from first child of credit hierarchy and not from the actual ECC record hence may not reconcile. These differneces will need to be fixed via custom utility. If issues are identified with credit exposure, it can be rebuilt using RVKRED77 program (but drop the current exposure first before rebuilding to avoid duplicate exposure) and if DCDs are activated it means re-saving of every open sales order to re-determine based on the new rule engine.To get the value of Open Orders, Invoices, Deliveries and Billing Document, use commitment type 100, 200, 400 and 500 respectively. Commitment type 300 is for special liabilities (refer to blog for more details).
  3. Trade Finance: In this step, existing SD Letter of Credits (LoC) are migrated to Treasury Risk Management Financial Documents (a link is maintained for both in TLCT_SD_ASSGMT table and this table is updated upon ‘F4’ in VA02 while assigning the Letter of Credit to Sales Order; a very unique way to update !!!) followed by assignment of existing LoC(s) to Sales Orders. Please note, this step does not migrate closed LoC(s) (status <> ‘D’) and also checks for date. Any inconsistency will result in failure thus data cleanup will be required in production system. Also S131 is deprecated now and the replacement table is TLCT_SD_ASSGMNT but updates to this table will require few enhancements to achieve like for like behavior. During Trade Finance Migration, changes to Sales Order with LoC assignment and updates to LOC(s) itself are blocked. Once the Trade Finance Migration step is ‘Set to Completed‘,  you can make new SO / LoC assignments or update/create LoC(s).

While the additional Finance Conversion Tasks have their own node in the Finance Conversion steps but they too are executed during Business Downtime. Same like Finance Migration Cockpit, here too, if the respective steps are marked as ‘Set to Completed‘ with known errors, they can be migrated using the ‘Finish‘ program in the ‘Activities After Migration‘. So you decide if the execution of ‘Activities After Migration‘ is really required and also, if the same should happen during downtime or post S/4HANA go-live.

All the messages generated during the Finance Migration are logged in Application logs and can be displayed in Finance Migration Cockpit (Analysis Step). Alternatively, you can also use SLG1 using Object FINS and Sub Object FINS_MIG. To display the message of a particular step, you need to know the Set ID for the same (refer to table FINS_MASSF_SET if required) and supply the wildcard FINS_<SetID>*. For House Bank Migration use the object BAM_MIGRATE.

While this completes the Finance Migration phase including the individual validation steps for each Set ID, it is required to reconcile the financial numbers between ECC and S/4HANA before business operations can be resumed. For this, SAP recommends following 13 standard reports (S_ALR_87013611, S_ALR_87012993, RFSSLD00, RFSOPO00, RFBELJ00, RAGITT_ALV01, RAHAFA_ALV01, RFKUML00, RFKEPL00, RFDUML00, RFDEPL00, RFDAUB00, RFBILA00) must be executed in both ECC (just after Ramp Down) and S/4HANA (just before Rampup) to reconcile the numbers.

In TOPIC 08 we will discuss “Mandatory S/4HANA Features”.

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