SAP S/4HANA:

Finance Capability and Frequently Asked Questions

Nutan Deshpande
Capgemini
Session ID5239
SAP S/4HANA: FINANCE CAPABILITY

Introduction

SAP S/4HANA, short for SAP Business Suite 4 SAP HANA, is

SAP’s next-generation business suite. It is a new product fully
built on the most advanced in-memory platform today – SAP
HANA – and modern design principles with the SAP Fiori user
experience (UX).

SAP S/4HANA delivers massive simplifications (customer

adoption, data model, user experience, decision making,
business processes, and models) and innovations (Internet of
Things, Big Data, business networks, and mobile-first) to help
businesses run simple in a digital and networked economy.
SAP S/4HANA : FINANCE CAPABILITY

What are the key business benefits of SAP Accounting

empowered by S/4HANA?
As there is no limitation from pre-calculated aggregates
and due to the built-in harmonization of Financial and
managerial accounting, below are the key benefits:
– Personalized reports on Finance and Operations
– Drill-down to line item level for root cause analysis
– Segmentation on the fly across multiple dimensions
– Extensibility of data model
– Immediate link between internal and external reporting
– Reduced manual effort
SAP S/4HANA: FINANCE CAPABILITY

How does SAP S/4HANA relate to SAP Simple Finance

powered by SAP HANA?

• The SAP Simple Finance solution marked the first step in our SAP
S/4HANA road map for customers. The solution has demonstrated
the value of simplification (for example, no indexes, no aggregates,
and no redundancies) and instant insight in Finance. SAP S/4HANA,
on premise edition leverages the full scope of SAP Accounting
powered by SAP HANA included in SAP Simple Finance.

• SAP S/4HANA, managed cloud edition is intended to leverage the

same scope. SAP S/4HANA, public cloud edition is planned to focus
on a selected scope of SAP Simple Finance in alignment with the
key requirements in finance.
SAP S/4HANA: FINANCE CAPABILITY

What is a Simple Finance Add-on ?

SAP Accounting SAP Cash Management Integrated Business Planning

powered by SAP HANA powered by SAP HANA for Finance

Alternative in-memory New product for New capabilities and enhanced

functionality for ERP customers Group Cash Management integration for ERP and BPC

Business Suite on HANA

SAP HANA Platform

Aligned Agile Predictive

Single Source of Truth Real time processes Dynamic Planning and Analysis
SAP S/4HANA: FINANCE CAPABILITY
Do you have examples of business use cases for Finance ?
Today Before
A single source of truth with superior granularity for all Separate systems and documents
transactions and analytics to streamline and eliminate cycle driving complexity across finance
times and reconciliations of the data. Reconciliation becomes and a lot of manual reconciliation
inherent. efforts

Central journal to get a consolidated, real-time view of the Separate entries in each process.
state of the business across all entities; this was simply not Integration via reports
possible before

71% faster batch input processing in financial close Only extensive transactions and
40% less posting corrections in financial close batch processing, no real-time
400 hours less processing time at quarter-end close simulation

Intercompany reconciliation on the fly for accelerating financial Intercompany reconciliation

close. Unlimited simulations –apply historic data to process involving multiple steps
continuously changing business context
70% less intercompany reconciliation time
Lengthy iterations eliminated in intercompany reconciliation
SAP S/4HANA: KEY IMPROVEMENTS
What are key improvements in Finance?
• Improved Close Efficiency and Quality
• Improved Profit Margin
• Improved Daily Financial Reporting and Analysis
• Simplified Asset Accounting
• Optimized Receivables – Reduce Days Sales Outstanding (DSO)
• Improved Cash Management
• Optimized Days Payable Outstanding, DPO
• Improved Accuracy and Agility of planning
• Reduced the risk of Fraud
• Improved visibility and Reporting across multi-system landscapes
• Holistically managed risk, and compliance to add business value
SAP S/4HANA FINANCE VALUE DRIVERS
Please state the main value drivers of each process area
Process Area Value Drivers
SAP Accounting SAP Accounting combines financial and management accounting as
well as profitability data into one universal journal. It abolishes
totals, indices, and other pre-defined aggregates, and relies on line
items as a single source of truth to provide an intuitive user
experience, reduce operational reporting efforts and accelerate
financial processes.
SAP Asset Accounting New Fixed Asset Accounting in SAP S/4HANA Finance is integrated
based on the Universal Journal architecture and records data non-
redundantly in one unique persistency. Multiple parallel documents
for all valuations are posted in real-time to ensure correct values
from the beginning
SAP Receivables SAP Receivables Management improves working capital and
Management financial health through real-time receivables data to enable
proactive assessment of customer credit risk, streamlines billing,
and prioritizes customer collections.
SAP Cash Management SAP Cash Management provides global cash positions in real time
even in the presence of heterogeneous backend systems. New
analytical capabilities provide detailed analysis on forecasted cash
flows to bring greater levels of consistency to cash balances, cash
requirements, and liquidity strategies.
 SAP S/4HANA: FINANCE DESIGN
IMPROVEMENTS
What are the design improvements in Finance?
Motto: “Take the best of all worlds” (e.g. ledger, market segment, coding block etc.)

• Secondary cost elements are G/L accounts

• One line item table with full detail for all components
• Data stored only once: no reconciliation needed by architecture
• Reduction of memory footprint through elimination of redundancy.
• Fast multi-dimensional reporting on the Universal Journal possible without
replicating data to BI.
• If BI is in place anyway, only one single BI extractor needed (instead of many today)
• Technical preparation done to enhance important structural capabilities of the
Financials solution (e.g. multi-GAAP , additional currencies)
SAP S/4HANA: UNIVERSAL JOURNAL

What is a universal Journal?

– Universal journal is single repository of journal entries
across multiple applications without redundancy
– This enables deeper instant insight across all dimensions,
easier extensibility and process optimizations for an
accelerated financial close

AP GL JV
CO Universal
Custom
FA Journal
CO-
ML AR PA
 SAP S/4HANA: FINANCE CAPABILITY
Please explain Simple Finance architecture

• The new journal entry consists of a header (table BKPF) and the respective items (table
ACDOCA)
• There are rare cases, where entries in ACDOCA are written without a document header
(e.g. carry forward, corrections in migration). These entries do not represent standard
business processes.
• Table ACDOCA contains all fields needed for G/L, CO, AA, ML, PA
• Multi-GAAP capability through “RLDNR” dimension
• 6 digit field for line item numbering
• 23 digits for currency fields
SAP S/4HANA: UNIVERSAL JOURNAL
Please provide the architecture of Universal Journal
Architecture
 Concept: “Take the best of all
worlds” (e.g. ledger, market
segment, coding block, etc.)
 ONE line item table with full detail
for all applications - for instant
insight & extensibility
 This replaces the “logical
document” of release 1.0.
 Secondary cost elements are G/L
accounts.
 Data stored only once: no
reconciliation needed by design
 Reduction of memory footprint
through elimination of
redundancy.
 Fast multi-dimensional reporting
possible without replicating data
to business warehouse (BW).
 If BW is in place anyway, only one
single BI extractor needed
(instead of many today).
SAP S/4HANA: NEW ASSET ACCOUNTING

What are the key benefits in Asset accounting?

• Flexibility concerning “Leading Valuation”
• No more hard coupling of depreciation area 01

• Only one Depreciation Area per Valuation necessary

• No further depreciation areas (Delta areas) necessary to portray a parallel valuation

• No restrictions to set up different account determinations in different valuations

• Real-time postings per accounting principle/valuation

• Common understanding of posted document
• Posting to different periods possible (restriction: beginning/end of FY needs to be equal)

• New transactions for accounting principle (depreciation area) specific documents

• Always separate documents per accounting principle (FI-AA)

• Post the values correctly right from the beginning, using multiple parallel documents
• Smooth integration with Parallel Valuation of Cost of Goods Manufactured (COGM)
• Parallel valuation of acquisition values immediately with the activation of an Asset under
Construction (AuC)
SAP S/4HANA: NEW ASSET ACCOUNTING
What are the New features in Asset accounting?

• Removal of redundancies:
• Reconciliation between G/L and AA is ensured by design!
• No reconciliation-step in financial close needed anymore.
• All non-statistical items are updated as Universal Journal Entries.
• Reporting based on line items – removal of totals
• Depreciation in full detail
• Depreciation posting per single asset
• Reporting on any CO-object by single asset enabled
• Fast close and Soft close
• Plan values at real-time – updated with every master data change and every asset
transaction
• Speed up of depreciation run by a factor of 4,7
• Posting run fully obsolete: real-time update of assets in all cases.
SAP S/4HANA: CASH MANAGEMENT
What are the New features in Cash Management?
Classic Cash Management is replaced by the new SAP Cash Management powered by SAP HANA.
Following areas have improved usability , new Fiori apps are available

• Bank Account Management :

– Bank master data transaction codes are replaced by new Fiori app "Manage Banks"
– (BAM) Bank hierarchy based on bank, business partners Free-style bank, account groups
allow ad-hoc watch for
• Cash Position / Liquidity forecast
– Use the Cash Position Details app, Liquidity Forecast:
– Data Integration: Bank Statement, Bank Statement Accounting
• Memo Record – No change in current process
• Liquidity planner
– Embedded Liquidity Plan with BPC/PAK (Planning Application Kit) and Design Studio UI
No ETL is needed. Automated liquidity forecast is integrated
– Rolling Liquidity plan process, Automated forecast, Variance analysis
• Cash Concentration – Based on New Bank Account Management
• Distributed Cash -Retrieve remote Liquidity Planner actual data into the Exposure Hub
SAP S/4HANA: INTEGRATED BUSINESS
PLANNING – SAP BPC ON S4HANA
What are the features of Integrated Business Planning?

• Embedded end-to-end planning process utilizes real time operational data from
ERP, eliminating redundancy / reconciliations between forecasting and operational
systems.

• All data stored in a single table in memory allowing for various data forms,
volumes, and configurations at the desired level of granularity.

• Complete planning app that supports plan development as well as the ability to
enter and report upon planned data.

• Pre-delivered content designed to significantly reduce cost of implementation,

ongoing maintenance, and to support adaptation in lieu of full implementation of
plan/forecast capabilities.
SAP S/4HANA: INTEGRATED BUSINESS
PLANNING
What are the features of Integrated Business Planning?
S/4HANA Finance includes templates that provide support for:
 Cost Center Planning
 Internal Order Planning
 Project Planning
 Profit Center Planning
 Cost of Sales Planning
 P&L Planning
 Market Segment Planning
 Liquidity Planning
 Balance Sheet Planning
S/4HANA Finance also includes:
 Queries
 Planning Functions
 Sequences
 Info-Objects
 Info-Providers
 SAP S/4HANA: FINANCE MIGRATION
Please explain the high level migration steps
• Training on G/L in SAP Accounting
Preparation • Blueprint for G/L configuration
• Reconciliation, period-end close activities, reporting snap shots for comparison

• Installation of the Financials Add-On

Installation of • Creation of back-up tables
Financials
Add-on • Reconciliation & Checks

• Data transfer from classic G/L to G/L in SAP Accounting

Data Transfer * • Reconciliation & checks after data transfer

• Migration of financial data (for GL/AP/AR/CO) – due to dropped totals tables, etc.
Data Migration • Reconciliation & checks after migration

• Cold partition for old index tables

• Activation of GL of SAP Accounting and configuration for asset accounting
Post Processing
• Reconciliation / comparison of financial KPI‘s
• Process tests
SAP S/4HANA: FINANCE REPORTING
What are the reporting improvements available?
Intuitive user experience
Example:

Post General Journal Entries

One Screen App for manual
postings to G/L accounts
Calculate taxes automatically
Add attachments and enter notes
to explain the reason for postings
SAP S/4HANA: FINANCE REPORTING
Drilldown Reporting - Example
 DETAILED ANALYSIS OF JOURNAL ENTRIES
Drilldown Reporting - Example
REFERENCES

• http://scn.sap.com/community/s4hana
• http://s4hana.sapjourneymap.com
• https://training.sap.com/shop/learninghub
FOLLOW US

Thank you for your time

Nutan.Deshpande@Capgemini.com

Follow us on at @ASUG365
 APPENDIX – S/4HANA TECHNICAL CHANGES
• Index tables removed Aggregate tables removed
BSIS Index for G/L Accounts GLT0 General Ledger: Totals

BSAS Index for G/L Accounts (Cleared Items) GLT3 Summary Data Preparations for Consolidation

BSID Index for Customers FAGLFLEXT New General Ledger: Totals

BSAD Index for Customers (Cleared Items) KNC1 Customer master (transaction figures)

BSIK Index for Vendors LFC1 Vendor master (transaction figures)

Customer master (special G/L transaction
BSAK Index for Vendors (Cleared Items)
KNC3 figures)
BSIM Index, Documents for Material
LFC3 Vendor master (special G/L transaction figures)

FAGLBSIS Index for G/L Accounts – New G/L

COSS Cost Totals for Internal Postings
Index for G/L Accounts – New G/L
FAGLBSAS (Cleared Items) COSP Cost Totals for External Postings
MATERIAL LEDGER: TECHNICAL CHANGES WITH SIMPLE FINANCE 2.0

MLHD Usage of Material Ledger for parallel currencies

and parallel valuation purpose
MLIT  Contents of tables MLIT, MLPP, MLPPF, MLCR,
MLCRF, MLCD, CKMI1, BSIM is stored in
MLPP
ACDOCA. MLHD data is stored in BKPF
 Compatibility views V_<TABLENAME> (e.g.
MLPPF BKPF V_MLIT) are provided in order to reproduce
the old structures
MLCR
 Access to old data in tables still possible via the
ACDOCA views V_<TABLENAME>_ORI (e.g. V_MLIT_ORI)
MLCRF
 MLHD, MLIT, MLPP, MLCR still keep prima nota
information, in case of manual price changes
or material debit/credit.
MLCD
Usage of Material Ledger for Actual Costing
purpose
CKMI1
 MLIT, MLIT, MLPP, MLPPF, MLCR, MLCRF,
MLCD are used as before Simple Finance 2.0
BSIM
ASSET ACCOUNTING: TECHNICAL CHANGES WITH SIMPLE FINANCE 2.0

Actual items
ANEK
 Actual data of ANEK, ANEP, ANEA, ANLP, ANLC
is stored in table ACDOCA. ANEK data is stored
in BKPF.
ANEP  Compatibility views FAAV_<TABLENAME> (e.g.
BKPF FAAV_ANEK) are provided in order to
reproduce the old structures.
 Access to old data in tables still possible via the
ANEA ACDOCA views FAAV_<TABLENAME>_ORI (e.g.
FAAV_ANEA_ORI)
Non actual items
ANLP FAAT_DOC_IT
 Statistical data (e.g. for tax purposes)
FAAT_PLAN_VALUES previously stored in ANEP, ANEA, ANLP, ANLC
is now stored in table FAAT_DOC_IT
ANLC  Plan data previously stored in ANLP and ANLC
is now stored in FAAT_PLAN_VALUES
CONTROLLING (CO): TECHNICAL CHANGES WITH SIMPLE FINANCE 2.0

Actual Items
COBK  Contents of COEP,
 Needed actual data for long running
orders/projects from COSP_BAK, COSS_BAK is
BKPF stored in table ACDOCA. Currently, COBK is
COEP written as before. Target is to replace COBK
through BKPF.
ACDOCA  Compatibility views V_<TABLENAME> (e.g.
V_COEP) are provided in order to reproduce
COSP_BAK the old structures.
 Access to old data in tables still possible via the
views V_<TABLENAME>_ORI (e.g.
V_COEP_ORI)
COSS_BAK Non actual items
 Value types other than ‘04’ and ‘11’ are still
stored in COEP, COSP_BAK, COSS_BAK
GENERAL LEDGER: TECHNICAL CHANGES WITH SIMPLE FINANCE 2.0

 Data of FAGLFLEXA, FAGLFLEXT is stored in table ACDOCA.

 Data of New G/L industry tables for Public Sector and Joint
FAGLFLEXA
Venture Accounting <Industry>T, <Industry>A is stored in
table ACDOCA.
FAGLFLEXT
 Data of customer created New G/L tables ZZ<CUST>T,
ZZ<CUST>A is stored in table ACDOCA
 A compatibility view is provided for FAGLFLEXA.
ZZ<CUST>T  FAGLFLEXT is defined as (compatibility) view.
 Compatibility views for the New G/L industry tables are
ACDOCA
provided: V_<Industry>A, V_<Industry>T
ZZ<CUST>A
 Compatibility Views are provided for customer created
New G/L tables. The views are numbered sequentially:
ZFGLV_GLTT_Cx and ZFGLV_GLSI_Cx, where x is a number.
<Industry>T
 Access to old data in tables still possible via the views
V_<TABLENAME>_ORI (e.g. V_FAGLFLEXA_ORI) .
 The old data of FAGLFLEXT is stored in table
<Industry>A
FAGLFLEXT_BCK
 Customers that want to access old data in customer
defined New G/L tables have to create views in the data
dictionary. As template, V_FAGLFLEXA_ORI can be used