S4F00
Overview of Financials in SAP
S/4HANA
.
.
PARTICIPANT HANDBOOK
INSTRUCTOR-LED TRAINING
.
Course Version: 17
Course Duration: 2 Day(s)
e-book Duration: 4 Hours 10 Minutes
Material Number: 50155560
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iii
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iv
Contents
vi
Course Overview
1
Unit 1:
2
12
24
Lesson: Introduce an Overview of SAP S/4HANA Finance
Lesson: SAP Navigation
Unit 2:
25
36
52
Unit 3:
Management Accounting
Lesson: Outlining the Scope of Management Accounting
Lesson: Cost Centers
Lesson: Creating Internal Orders
Unit 4:
72
80
94
Business Processes in the SAP S/4HANA Finance Solution
Lesson: Managing Accounting Data with General Ledger Accounting
Lesson: Perform Postings in Accounts Payable
53
60
63
71
SAP S/4HANA Finance - Introduction and Overview
Financial Accounting – Asset Accounting and Accounts
Receivable
Lesson: Posting and Analyzing in Asset Accounting
Lesson: Posting and Analyzing in Accounts Receivable
Unit 5:
95
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Understanding the Central Finance Option
Lesson: Understanding the Central Finance Option
v
Course Overview
TARGET AUDIENCE
This course is intended for the following audiences:
Application Consultant
Project Manager
Business User
Super / Key / Power User
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vi
UNIT 1
SAP S/4HANA Finance
- Introduction and
Overview
Lesson 1
Introduce an Overview of SAP S/4HANA Finance
2
Lesson 2
SAP Navigation
12
UNIT OBJECTIVES
Overview SAP S/4HANA Finance
Understand SAP Navigation with SAP Fiori and SAP GUI
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1
Unit 1
Lesson 1
Introduce an Overview of SAP S/4HANA
Finance
LESSON OVERVIEW
This lesson explains the positioning of the SAP S/4HANA Finance solution within the portfolio
of SAP.
Business Example
As a member of the finance department of your company, you have to familiarize yourself
with various accounting tasks that include legal restrictions such as the creation of balance
sheets and profit and loss statements, and fulfilling internal requirements, for example, the
analysis of overheads or planning and budgeting projects.
Many companies also see process improvement in the areas of accounts receivable, asset
accounting, accounts payable and central finance. These internal tasks are also a source of
greater cost-savings. For this reason, you need to have an understanding of SAP S/4HANA
Finance.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Overview SAP S/4HANA Finance
SAP S/4HANA Finance Learning Journey
Figure 1: Financial Accounting Learning Journey
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Lesson: Introduce an Overview of SAP S/4HANA Finance
Learning Journeys are visual guides, designed to help you complete the learning path for
particular SAP solutions. The easiest way to find learning journeys is to search for SAP
Learning Journeys in your browser.
The Connected Digital World
Figure 2: The Connected Digital World
Today's world is digital and networked; we are presented with more and more business
challenges and opportunities.
The pace of data generation is accelerating - in the last two years, 90% of world data has
been generated.
Over the next two years, there will be 40% growth in the adoption of business networks.
By the end of the decade, 212 billion things, from cars, to heavy equipment, to consumer
appliances, will be connected to the Internet.
By 2020, there will be 9 billion mobile users in the world.
Last year alone, 51% of workloads were processed in the Cloud. That amount will only
grow for the foreseeable future.
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
Figure 3: Advances in Technology
In the last few years, there have been significant advances in technology, which application
developers are able to take advantage of so that they can build smarter and more powerful
applications.
The following are some examples of what these applications provide:
Multi-core processors enable parallelism of tasks, which means more throughput of data
and faster processing to provide real-time responses.
Large memory enables an entire organization's database with memory replacing the
mechanical spinning disk and the latency it brings.
On-board cache design advances enable data to be passed between memory and CPU
cores rapidly. In the past, even with large memory, this was a bottleneck, as CPUs were
demanding more data and the journey from memory to CPU was not optimal.
More servers can now be easily added into our landscape to provide more processing
power or memory in order to scale to any size.
SAP business application software has been rewritten to fully exploit the new hardware that is
available. SAP worked closely with leading hardware partners who shared the product
blueprints of their new CPU architectures so that SAP knew how to write the very best
modern software to extract every drop of power.
Cloud computing technology has matured in the last few years and is now a compelling
deployment option for our customers who do not want to take on the complexity and cost of
the installation and maintenance of IT landscapes. Making machines virtual means the cost of
running enterprise-wide applications has been lowered. Public Cloud services based on
subscription models increase access to the latest solutions for everyone, reducing costs, and
simplifying every process.
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Lesson: Introduce an Overview of SAP S/4HANA Finance
Figure 4: Trade-Off – Broad and Deep or Speedy and Simple
With the traditional system architecture, you have to make a trade-off between Broad and
Deep Analysis or Speedy and Simple reporting.
With old technologies, optimizing across the five dimensions shown in the figure, Trade-Off –
Broad and Deep or Speedy and Simple, is not possible. Therefore, you can decide to go deep
and broad with your business warehouse systems or have high speed but simple reports from
your data.
In both scenarios, real time updates are almost impossible to design. In a data warehouse
environment, updates occur overnight with nightly batch jobs.
SAP S/4HANA - The Intelligent Core
Figure 5: Evolution of SAP S/4HANA Architecture
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
Traditionally, the SAP financial applications are separated into different components, for
example, Financial Accounting (FI), Management Accounting (CO) and so on. These
components are themselves made up of sub-components such as Asset Accounting (FI-AA).
Each component has its own data model architecture and this brings inefficiencies with it. The
development of S/4HANA provided the opportunity for a complete redesign of these data
models, to remove inefficiencies.
Key Aspects of SAP S/4HANA
Figure 6: Key Aspects of SAP S/4HANA
SAP S/4HANA is built on SAP HANA and so we inherit all the capabilities of this powerful inmemory data management and application platform. This includes advanced text mining,
predictive analysis, simulations, and powerful real time decision support, with access to any
type of data in real time.
A brand new user experience is delivered to improve the productivity and satisfaction of
business users and brings the interface up to a consumer-grade experience optimized for any
device.
SAP S/4HANA can be deployed on premise or in the cloud or as a combination of both to
provide flexible consumption options to customers.
The data model has been greatly simplified. This means that unnecessary tables and the data
in those tables has been removed in order to shrink the footprint dramatically and simplify the
application design and extensibility.
SAP provides a fully integrated platform, based on the latest technology trends, to allow
finance to lead the transformation to digital business.
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Lesson: Introduce an Overview of SAP S/4HANA Finance
Overview of Finance with SAP S/4HANA
Figure 7: Complete Finance Portfolio
SAP provides a fully integrated platform, based on the latest technology trends to allow
finance to lead the transformation to digital business. All aspects of financial requirements
across all roles are supported in granular solution areas.
SAP S/4HANA Finance gives you the ability to centrally track financial accounting data within
an international framework of multiple companies, languages, currencies, and charts of
accounts.
Financial Accounting in SAP S/4HANA Finance
For example, when raw materials move from inventory into manufacturing, the system
reduces the quantity in inventory and simultaneously subtracts values for inventory accounts
in the balance sheet. The Financial Accountingfunction complies with international
accounting standards, such as United States Generally Accepted Account Principles (USGAAP) and International Financial Reporting Standards (IFRS). It also fulfills local legal
requirements of many countries and fully reflects the legal and accounting changes resulting
from European market and currency unification.
Figure 8: SAP S/4HANA — Positive Effects for the Finance Area
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
Key Features and Functions of Financial Accounting in SAP S/4HANA Finances:
General Ledger Accounting
Accounts Receivable or Accounts Payable
Fixed Assets
Banks
Fast-Close Functions
Financial Statements
Parallel Valuation
Management Accounting in SAP S/4HANA Finance
Management Accounting(Controlling) enables the valuation and recording of financial data,
not only for financial reporting, but also as the basis for all cost and revenue-related reporting.
As a result, analysts and managers can work with the same basic data as the company’s
financial accountants. As financial data is tightly integrated with the business processes of the
logistic processes of SAP S/4HANA and human resources applications, users can also easily
obtain detailed information about cost structures and profit margins.
Easy access to this data helps support and enable management to achieve business goals,
such as increasing revenue, maximizing customer profitability, and reducing operating costs
while increasing efficiency, reducing the cost of goods sold, and improving the visibility of
inventory.
Key Features and Functions of Management Accounting in SAP S/4HANA Finance:
Cost Element Accounting
Cost Center Accounting
Internal Orders
Product Cost Controlling
Profitability Analysis
Revenue and Cost Planning
Budgeting
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Lesson: Introduce an Overview of SAP S/4HANA Finance
Figure 9: Universal Journal Enables Continuous Accounting
SAP S/4HANA - Deployment Options
Figure 10: SAP S/4HANA Consistent Choice for Cloud and On-Premise
SAP S/4HANA's simplified data model and modern user experience are consistent for both
Cloud and on premise. When it's time to deploy SAP S/4HANA, the choices are on premise or
in the Cloud. Either way, SAP S/4HANA maintains consistency with the data model, user
experience, and code line. SAP S/4HANA and SAP S/4HANA Cloud offer a consistent
solution, allowing you to benefit in any scenario or combination.
There are many factors in making the on premise or Cloud deployment decision, but they can
be simplified into a few major dimensions:
IT Strategy:
Increasingly, customers are taking a "Cloud first" approach to their ERP system landscape.
It is important to verify that the scope of the standard best practices in S/4HANA Cloud
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
will serve your business requirements, and whether this should be complemented with
extended functionality (lines of business, industry-specific) via a co-deployment with S/
4HANA Cloud, single-tenant edition, for example.
Innovation Cycles:
Updates to S/4HANA Cloud are provided on a quarterly innovation cycle. SAP regularly
delivers the latest in machine learning, natural language processing, predictive analytics,
and more, in a non-disruptive, easy-to-consume manner. S/4HANA Cloud, single-tenant
edition is offered with 2 upgrades per year, while S/4HANA on-premise is offer with one
annual upgrade.
Business Functionality:
The available scope for each deployment option will vary, allowing choices for licensing and
deployment.
Deployment Times:
The deployment of S/4HANA can be accelerated in the Cloud for many customers, since
they do not need to acquire and maintain infrastructure.
Regulatory, Industry, and Regional Requirements:
Some customers may have requirements in these areas that make the Cloud unsuitable. If
this is the case, then they can continue with traditional on premise deployment. Or, if they
have differing requirements for various subsidiaries, they can mix-and-match Cloud and
on premise deployment in a 2-tier strategy and still maintain consistency for IT and
business users.
Figure 11: Three SAP S/4HANA Deployment Options
SAP S/4HANA deployment options are:
SAP S/4HANA as an on-premise next generation ERP system on top of the platform SAP
HANA. For a customer specific Cloud offering, the customer can either bring their own
licenses or license via subscription model. They can combine these with customer
individual infrastructure and optional application management services. This model will
still be in place and cover those cases, where the customer has very individual needs.
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Lesson: Introduce an Overview of SAP S/4HANA Finance
SAP S/4HANA Cloud public option has highly standardized processes and allows only a
limited set of customizing.
SAP S/4HANA Private Cloud Options, which leverage the full functional scope,
extensibility options and localizations of the S/4HANA on premise code line in
combination with infrastructure and services in one subscription pricing. SAP offers
standardized system landscapes and functionality packages.
Please note in that slide, that the level of standardization decreases from left to right, while
the complexity and costs increase.
It is important for companies, especially installed base customers of SAP, to consider using
S/4HANA Cloud to review whether fit-to-standard based on the available scope of the
solution will serve their business needs by exploring the Best Practice Explorer . Companies
can efficiently extend solutions through SAP Cloud Platform, which maintains integration and
interfaces as a service, unlike costly to maintain customizations in the on-premise past; or
through a hybrid deployment with S/4HANA or S/4HANA Cloud, single-tenant edition, based
on a company's business and/or regulatory requirements. In any scenario you benefit from a
complete, consistent choice.
LESSON SUMMARY
You should now be able to:
Overview SAP S/4HANA Finance
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11
Unit 1
Lesson 2
SAP Navigation
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Understand SAP Navigation with SAP Fiori and SAP GUI
SAP Navigation with SAP Fiori
Scenario
You want to ensure that everybody working with the system has the best possible experience
when interacting with SAP S/4HANA, and that everybody can access business critical
applications on any device without compromise. You need a solution that integrates with your
existing IT system landscape and that can expand to cover your specific needs. You want to
make sure that SAP Fiori meets these requirements.
Figure 12: SAP Fiori User Experience Concepts
There are five pillars to the SAP Fiori user experiences paradigm:
Role-based
SAP Fiori is designed for your business, your needs, and how you work. It draws from our
broad insights on the multifaceted roles of today’s workforce. SAP Fiori provides the right
information at the right time and reflects the way you actually work.
Adaptive
SAP Fiori enables you to work how and where you want, regardless of the device you use.
And, it provides relevant information that allows for instant insight.
Coherent
Whether you fulfill a sales order, review your latest KPIs, or manage leave requests – SAP
Fiori adheres to a consistent interaction and visual design language. Across the enterprise,
you enjoy the same intuitive and consistent experience.
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Lesson: SAP Navigation
Simple
With SAP Fiori, you can complete your job intuitively and quickly. SAP Fiori helps you focus
on what is important – essential functions are easy to use and you can personalize the
experience to focus on your relevant tasks and activities.
Instant value
Apart from making you work smarter, SAP Fiori also enriches your work experience by
allowing you to simply do your job.
What is SAP Fiori?
Figure 13: SAP Fiori Application Types
SAP Fiori applications can be classified into different types. Examples include the following:
Transactional
These apps follow an optimal design for fast transaction processing, such as purchase
receipt entry. Transactional apps offer task-based access to tasks like change, create,
display (documents, master records), or entire processes with guided navigation.
Analytical
Provide tools required for analysis, graphs, charts, exploration, data mining, and drill down.
Analytical apps provide insight to action. They give you a visual overview of complex topics
for monitoring or tracking purposes.
Factsheet
Provides a 360 degree view of all key information related to a business object. For
example, enter an employee name and all information about that employee appears, such
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
as working hours, vacation, pay, performance, manager, and awards. Factsheets give you
the opportunity to search and explore your data. They provide a 360 degree view on
essential information about an object, and contextual navigation between related objects.
This is a good example of the SAP Fiori approach, which is to use a limited number of
consistent interfaces to keep things simple.
When developers create a new SAP Fiori application, they start by selecting a template, that is
based on transactional, analytical, or factsheet, so they have a consistent look and feel.
SAP Fiori Launchpad — One Entry Point for the User
Figure 14: SAP Fiori Launchpad
The SAP Fiori Launchpadis a shell that hosts SAP Fiori appsand provides services, such as
navigation, personalization, embedded support, and application configuration. It is the entry
point to SAP Fiori appson mobile and desktop devices. The launchpad displays a home page
with tiles, which can display live status indicators, such as the number of open tasks. Each tile
represents a business application that the user can launch.
The SAP Fiori apps on the home page are arranged in tile groups. The user can personalize
the layout of the home page, by grouping, moving, and removing tiles. The user can also add,
delete, rename, and reorder groups. The ability to personalize the home page must be
enabled in the launchpad configuration.
To add tiles to groups, the launchpad provides a tile catalog, which displays all the tiles that
are available to a user.
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14
Lesson: SAP Navigation
Figure 15: User Personalization
The following personalization options are available in SAP Fiori Launchpad:
Adding applications to the launchpad from assigned catalogs
Removing applications from the launchpad
Modifying and adding applications for filtered report results
For example, if the user is a group cash manager who is interested in the German market, the
user can create an application to take them directly to the cash position of the German
market. They can arrive at the cash position directly with one click from the SAP Fiori
launchpad home page.
SAP Navigation with SAP GUI
Scenario
Some users may still access the system with the classic SAP GUI for particular tasks. You
want to have a basic knowledge of how the SAP GUI functions.
SAP Logon (GUI)
The SAP Graphical User Interface (SAP GUI) is the front-end program used to access SAP
systems. Several variants of the SAP GUI are available and are adapted for use in different
environments. In this lesson, we refer to the SAP GUI for the Windows environment.
The SAP GUI program connects the front-end computer with a specific SAP system. To start
the SAP GUI, SAP provides another program: SAP Logon. When the user launches SAP
Logon, a screen displays a list of available SAP systems. This list is derived from a file on the
front-end computer, and is preconfigured and made available to users.
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
Figure 16: SAP Logon
The Logon Screen
Figure 17: Logging on to an SAP system using SAP GUI
Before you log on for the first time, your system administrator will give you an initial
password. During the process of logging on, you enter a new password of your own choice.
You will use your own password whenever you log on.
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16
Lesson: SAP Navigation
If there are system-wide messages, the System Messages dialog box appears. After you have
read the messages, choose Continue (or Enter) to close the dialog box.
The SAP GUI Screen
Figure 18: The SAP Easy Access Screen
The left side of the screen contains a tree hierarchy of the available menus. The graphic on the
right side is made available centrally by your system administrator and cannot be customized
by individual users. The graphic could be the company logo, for example.
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Unit 1: SAP S/4HANA Finance - Introduction and Overview
SAP GUI Screen Structure
Figure 19: SAP GUI Screen Structure
An SAP screen can contain the following screen elements:
Command field: You can start applications directly by entering the transaction code in the
command field. You can find the transaction code for an application in the status bar, or in
the application itself under System
Status .
Menu bar: The menu bar is the top line of any primary window in the SAP system. The
menu displayed depends on the application you are using.
Standard toolbar: The buttons in the standard toolbar are shown on every SAP screen. If
certain buttons are not available in an application, they are deactivated (grayed out). If you
move the cursor over a button, the system displays a tooltip with the name or function of
that button.
Title bar: The title bar displays the name of the function that you are currently using.
Application toolbar: The application toolbar shows the buttons available in the application
you are currently using.
Check boxes: Check boxes allow you to select several options from a group of fields.
Radio buttons: Only one radio button option may be selected.
Tab / Tab page : A tab page allows you to organize several screen areas to improve clarity
and organize data.
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Lesson: SAP Navigation
Status bar: On the left, the status bar will System Messages, such as, when a process is
successful, processing warnings/errors and may also display items such as document
numbers or master data numbers that have been saved when created. On the right side of
the Status bar, you can display the System Information of the system you have accessed,
such as system ID and client. You can also change the display variant to show other
system information, for example, the transaction code of the transaction you are currently
using.
LESSON SUMMARY
You should now be able to:
Understand SAP Navigation with SAP Fiori and SAP GUI
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19
Unit 1
Learning Assessment
1. Which are the three deployment options of SAP S/4HANA?
Choose the correct answers.
X
A SAP S/4HANA Cloud (public)
X
B SAP S/4HANA Public Pool System
X
C SAP S/4HANA Cloud, single-tenant edition
X
D SAP S/4HANA (on premise)
2. Deciding about the best fitting SAP S/4HANA deployment option for SAP S/4HANA for
your business, which dimensions come into your mind?
3. Which different types of SAP Fiori Apps can be used?
4. The SAP Fiori Launchpad guarantees the same UI for every user working with the SAP
system.
Determine whether this statement is true or false.
X
True
X
False
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20
Unit 1: Learning Assessment
5. On the SAP Logon GUI, which of the following provides general information on the SAP
System and transaction or task on which you are working
Choose the correct answer.
X
A Application toolbar
X
B Status bar
X
C Tab page
X
D Menu bar
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Unit 1
Learning Assessment - Answers
1. Which are the three deployment options of SAP S/4HANA?
Choose the correct answers.
X
A SAP S/4HANA Cloud (public)
X
B SAP S/4HANA Public Pool System
X
C SAP S/4HANA Cloud, single-tenant edition
X
D SAP S/4HANA (on premise)
Correct. The three deployment options of SAP S/4HANA are: SAP S/4HANA (on
premise), SAP S/4HANA Cloud (public), and SAP S/4HANA Cloud (single-tenant edition).
2. Deciding about the best fitting SAP S/4HANA deployment option for SAP S/4HANA for
your business, which dimensions come into your mind?
IT Strategy; Innovation Cycles; Business Functionality; Deployment times; Regulatory,
Industry and regional requirements.
3. Which different types of SAP Fiori Apps can be used?
The three different possible SAP Fiori App Types are: Transactional Apps, Analytical Apps,
and Factsheets.
4. The SAP Fiori Launchpad guarantees the same UI for every user working with the SAP
system.
Determine whether this statement is true or false.
X
True
X
False
Correct. The SAP Fiori Launchpad enables the user to adapt the launchpad according to
their own needs.
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Unit 1: Learning Assessment - Answers
5. On the SAP Logon GUI, which of the following provides general information on the SAP
System and transaction or task on which you are working
Choose the correct answer.
X
A Application toolbar
X
B Status bar
X
C Tab page
X
D Menu bar
Correct. The Status bar will show System Messages and System Information.
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23
UNIT 2
Business Processes in
the SAP S/4HANA
Finance Solution
Lesson 1
Managing Accounting Data with General Ledger Accounting
25
Lesson 2
Perform Postings in Accounts Payable
36
UNIT OBJECTIVES
Understand the structure and data within Finance
Manage accounting data with General Ledger accounting
Perform Postings in Accounts Payable
Understand the Integrational Aspects of Accounts Payable
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24
Unit 2
Lesson 1
Managing Accounting Data with General
Ledger Accounting
LESSON OVERVIEW
This lesson explains tasks, processes, functions, transactions, and reporting possibilities of
General Ledger Accounting.
Business Example
Financial management must fulfill external requirements, which include legal restrictions such
as the creation of balance sheets and profit and loss statements. They are just as important
as fulfilling internal requirements, for example, the analysis of overheads or planning and
budgeting projects.
Many companies also see process improvement in the areas of accounts receivable, accounts
payable, asset accounting and central finance. These internal tasks are also a source of
greater cost savings.
General Ledger Accounting is one area within the SAP S/4HANA Finance solution that helps
to fulfill the external tasks. As a member of the finance department of your company, you
need to fulfill these external requirements. Therefore, you need to understand about General
Ledger accounting.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Understand the structure and data within Finance
Manage accounting data with General Ledger accounting
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Understand the Structure and Data Within Finance
Figure 20: General Ledger Accounting
The General Ledger (G/L) is the core of Financial Accounting (FI). The FI application
component fulfills all the international requirements that must be met by the FI department of
an organization.
General Ledger Accounting Features
General Ledger Accounting provides the following features:
Management and representation of all accounting data:
The system records all business transactions according to the document principle, which
provides an unbroken audit trail from the financial statements to the individual documents.
Open and integrated data flow:
Automatic updates ensure data flow between FI and the other components of the SAP
system. Data is available in real time within FI. Postings made in the subledgers always
generate a corresponding posting in General Ledger Accounting.
Decision making:
Preparation of operational information to assist strategic decision-making within the
organization.
FI focuses on General Ledger Accounting and the processing of receivables (FI-AR), payables
(FI-AP), and Asset Accounting (FI-AA). Important tasks of FI include the recording of
monetary and value flows as well as the evaluation of the inventories.
Main Tasks of General Ledger Accounting
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Lesson: Managing Accounting Data with General Ledger Accounting
Map all posting-relevant business transactions.
Display account line items and balances.
Create and display financial statement for a company code.
Create financial statements on levels beneath the company code, for example, for profit
centers, segments, or business areas.
It is possible to create financial statements on levels beneath the company code within G/L.
Hint:
The G/L contains the recording of all accounting-relevant business transactions
onto G/L accounts from a business point of view. The result of the recording is
an accounting document.
Important Terms in General Ledger Accounting
The following are some important terms used in G/L Accounting:
Table 1: General Ledger Accounting Terms
Term
G/L account
Description
It is a structure that records value movements in a company code and represents
the G/L account items in a chart of accounts.
A G/L account has transaction figures
that record changes to the account during
a posting period. These figures are totals
that are used for G/L reporting.
In general, you can distinguish between a
G/L account as an income statement or
balance sheet account.
Company code
It is the smallest organizational unit of FI
for which a complete, self-contained set
of accounts can be drawn up for the purposes of external reporting.
This includes recording all relevant transactions and generating all supporting
documents required for financial statements.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Term
Chart of accounts
Description
It is a classification scheme consisting of a
group of G/L accounts.
It provides a framework for the recording
of values to ensure an orderly rendering of
accounting data.
The G/L accounts are used by one or
more company codes.
Journal entry
It records the changes in values in a company code arising from accounting transactions.
A document consists of two or more line
items. The document represents at least
one individual transaction posted to an
account.
When posting an accounting document,
the SAP system updates the transaction
figures in the accounts to which the document is posted.
It is a representation within the SAP system of the document (for example, an invoice) that triggered the posting.
Data Structure within the Finance Application
In an SAP system, we distinguish between three different types of data:
Organizational Data
Is the representation of your company’s structure in the system.
Master Data
Contains information that remains the same over a long period of time and is reused in
different business processes.
Movement Data
Is short-lived and is assigned to master data.
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Lesson: Managing Accounting Data with General Ledger Accounting
Figure 21: Organizational Structures
As SAP S/4HANA is a fully integrated system, you need to assign organizational units to each
other across the different application components. Therefore you need to define the internal
and external organizational units concurrently and assign them to each other.
Operating Concern
An operating concern represents an organizational unit in your company for which the
sales market has a uniform structure. It is the valuation level for Profitability Analysis
(CO-PA).
Controlling Area
Organizational unit in an organization that represents a closed system used for cost
accounting purposes. A controlling area can contain one or more company codes, which
can operate in different currencies, if required. The company codes within a controlling
area must all use the same operational chart of accounts.
All internal allocation transactions refer only to objects from the same controlling area.
The controlling area is the main organizational unit within Management Accounting (CO).
Company Code
The smallest organizational unit for which a complete self-contained set of accounts can
be drawn up for external reporting. This involves recording all relevant transactions and
generating all supporting documents for financial statements, such as balance sheets
and profit and loss statements. The company code is the main organizational unit within
FI.
Plant
Operational unit within a company code used in the Logistic application, for example,
production facility or branch office.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Figure 22: Master and Movement Data
When posting transaction data related to a business process in an SAP system, not all data is
entered with every transaction. Some data which is recurring is derived from master data.
An example would be the posting of a vendor invoice. Of course the information related to the
invoice, such as the invoice amount has to be entered but other data, such as the address of
the vendor, is derived from the master data record of the respective vendor and does not
have to be entered with the invoice.
Integration Between Financial and Management Accounting and Charts of Accounts
Figure 23: Integration Between Financial and Management Accounting and Charts of Accounts
Integration Between Controlling Area, Company Code, and CoA
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Lesson: Managing Accounting Data with General Ledger Accounting
A controlling area can contain one or more company codes, which can operate in different
currencies, if required. The company codes within a controlling area must all use the same
operational chart of accounts.
The company code assignment to the controlling area must be made according to the
processes your company has in logistics and accounting. The organizational environment is
very important, too. It is difficult, or at best time-consuming, to change the 1:1 or 1:n
relationship between the controlling area and company code after the decision and the
assignment have already been made.
The company code and controlling area organizational units can be combined in a number of
ways. Using the following combinations, you can represent organizations with different
structures:
One Controlling Area is Assigned to One Company Code. In this example, the financial
accounting and cost accounting views of the organization are identical.
Multiple Company Codes Assigned to One Controlling Area. This example is CrossCompany Code Cost Accounting. Cost accounting is carried out in multiple company
codes in one controlling area. All cost-accounting relevant data is collected in one
controlling area and can be used for allocations and evaluations. In this case, the external
and internal accounting perspectives differ from each other.
For example, this method can be used if the organization contains a number of
independent subsidiaries using global managerial accounting. Cross-company code cost
accounting gives you the advantage of using internal allocations across company code
boundaries.
General Ledger Accounts and Different Kinds of Charts of Accounts
Within general ledger accounting, the G/L account is the most important master data. G/L
accounts are structured in the charts of accounts.
There are three different kinds of charts of accounts. One of these is mandatory and the other
two are optional.
Operational Chart of Accounts
The operational chart of accounts is the one that is being used on an operational level.
The accounts of this chart of accounts are the ones that the accountants use when
posting documents. It is assigned on company code level. The use of this chart of
accounts is mandatory.
Country Chart of Accounts
The country chart of accounts is used if a company needs to use other accounts than the
ones used in the operational chart of accounts in order to fulfill local accounting
standards. Usually there is a 1:1 relationship between the accounts from the operational
chart of accounts and the accounts from the country chart of accounts. It is assigned on
a company code level. The use of this chart of accounts is optional.
Group Chart of Accounts
The group chart of accounts is used in order to deliver financial statements to
consolidation. Reasons to use this chart of accounts might be that different companies
within the group might use different operational charts of accounts or that accounts
within the operational chart of accounts should be aggregated for consolidation.
Therefore, there is usually an n:1 relationship between the accounts from the operational
chat of accounts and the accounts from the country chart of accounts. It is assigned
directly to another (usually an operational) chart of accounts. The use of this chart of
accounts is optional.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Manage Accounting Data Within General Ledger Accounting
Figure 24: Important Balance Sheet Items
The figure, Important Balance Sheet Items, shows an example of a country-specific structure.
The structure always depends on customer-specific requirements.
Note:
Guidelines for balance sheets of public business entities are given by the
International Accounting Standards Board and numerous country-specific
organizations or companies.
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Lesson: Managing Accounting Data with General Ledger Accounting
Financial Statement Versions
Figure 25: Financial Statement Versions
Financial Statement Versions
A G/L provides the information needed to create a balance sheet and a profit-and-loss
statement. These reports have to meet country-specific requirements. Our demo company
needs to create financial statements based on the German Commercial Code (HGB) for
company code 1010 (Germany), and based on the U.S. Generally Accepted Accounting
Principles (GAAP) for company code 1710 (USA).
To meet the various reporting requirements, various financial statement versions can be
created in the SAP system. In these financial statement versions, you define exactly which
accounts are to appear in which line items of the financial statement. Many financial
statement versions are included in the SAP system.
When running financial statement reports, a financial statement version that contains the
details of the report structure needs to be selected.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Posting a Document
Figure 26: Posting a Document
This figure, Posting a Document, shows the SAP Fiori app Post General Journal Entries , which
is used to post G/L documents. Documents can be posted manually via the SAP Fiori app or
uploaded if customers choose to enter their documents outside of the SAP system.
Analyzing a Posting
Figure 27: Analyzing a Posting
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Lesson: Managing Accounting Data with General Ledger Accounting
You have to record all accounting-relevant business transactions. You can save the recording
in the form of an accounting document. You can always display and analyze each accounting
document and its values in many different ways.
LESSON SUMMARY
You should now be able to:
Understand the structure and data within Finance
Manage accounting data with General Ledger accounting
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35
Unit 2
Lesson 2
Perform Postings in Accounts Payable
LESSON OVERVIEW
This lesson explains system settings and scope of Accounts Payable.
Business Example
As a member of the finance department of your company, you must fulfill external
requirements, which include legal restrictions such as the creation of balance sheets and
profit and loss statements. You must also fulfill internal requirements, for example, the
analysis of overheads or planning and budgeting projects.
Your company also sees process improvement in the areas of Accounts Receivable, Accounts
Payable, Asset Accounting and Central Finance. These internal tasks are also a source of
greater cost savings. Accounts Payable is one area within the SAP S/4HANA Finance solution
that helps to fulfill these external tasks. For this reason, you need to analyze the scope of
Accounts Payable.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Perform Postings in Accounts Payable
Understand the Integrational Aspects of Accounts Payable
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Lesson: Perform Postings in Accounts Payable
Accounts Payable
Figure 28: General Ledger and Accounts Payable
Hint:
Accounts Payable Accounting (FI-AP) records all business transactions that have
to do with relationships to suppliers.
In practice, FI-AP has close connection with Materials Management (LO-MM).
You can record supplier information in Financial Accounting (FI) with the
(logistic) transactions purchase order, goods receipt, and invoice receipt.
G/L Accounting often contains only collective postings. In such cases, you can post data in
different ways in subledgers, which pass on their data, compressed, to G/L Accounting.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Figure 29: Reconciliation Accounts
Reconciliation accounts link the subledgers to G/L Accounting in real time. As soon as a
posting is made to a subledger account, the same posting is made to the respective
reconciliation account in G/L Accounting.
Note:
If a G/L account is set up as a Reconciliation account, direct postings to this
account are no longer possible. Only postings to a corresponding subledger
account can bring values to the G/L account via the reconciliation mechanism.
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Lesson: Perform Postings in Accounts Payable
Accounting Document for a Vendor Invoice
Figure 30: Create an Accounting Document for a Vendor Invoice
The figure, Create an Accounting Document for a Vendor Invoice, shows the SAP Fiori App
Create Incoming Invoices , which can be used if invoices want to be entered manually directly
in the Finance application.
Figure 31: Document a Vendor Invoice
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Note:
The reconciliation account in G/L Accounting is the account that the system
updates parallel to the subledger account for normal postings, for example,
invoice or payment.
For special postings (for example, down payments), this account is replaced by
another account (for example, down payments received instead of receivables).
The replacement takes place due to the special G/L indicator, which you must
specify for these types of postings.
Subledger Versus G/L
Figure 32: Subledger Versus G/L
The figure, Subledger Versus G/L, shows details of two different options.
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Lesson: Perform Postings in Accounts Payable
Payments
Figure 33: Payments
Payments are usually triggered and posted during the automatic payment run but it is also
possible to post manual payments.
Independent of a manual or automatic posting, the user or the system has to determine how
the posting is made (payment method), which bank should be used for the payment, and
which amount is to be paid after taking possible cash discounts into account.
After all this has been decided, the payment document is posted and the payment medium is
printed.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Accounts Payable Process – Account View
Figure 34: Accounting View of a Vendor Invoice
To post an incoming invoice with SAP Fiori, choose the SAP Fiori App Create Incoming Invoice .
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Lesson: Perform Postings in Accounts Payable
Accounting View of a Vendor Payment
Figure 35: Accounting View of a Vendor Payment
Hint:
The figure, Accounting View of a Vendor Payment, displays the manual posting of
a payment. In practice, you typically use the payment program.
To post an outgoing payment manually with
Outgoing Payment .
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SAP Fiori, choose the SAP Fiori App Post Supplier
43
Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Accounts Payable Process – Integrated with MM
FI-AP Integrated with Materials Management
Figure 36: FI-AP Integrated with Materials Management
Hint:
The figure, FI-AP Integrated with Materials Management, displays the purchase
order and goods receipt of spare parts, which are not created in Materials
Management (MM) as a material master record.
It is also possible to create a purchase order for an SAP material master record number.
Accounting record of the goods receipt:
Material (balance sheet account)
to
Goods Received/Invoice Received (GR/IR) clearing account.
Note:
You can see an illustration of the material process in one of the next figures.
To create a purchase order with SAP Fiori, choose the SAP Fiori App Manage Purchase Order.
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Lesson: Perform Postings in Accounts Payable
To post a goods receipt with SAP Fiori, choose the SAP Fiori App My Purchasing Document
Item .
Hint:
The FI-AP process integrated with MM is also known as the Purchase-to-Pay
process.
Logistics Invoice Verification
Figure 37: Logistics Invoice Verification
To post an incoming invoice in MM with SAP Fiori, choose the SAP Fiori App Create Supplier
Invoice.
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Unit 2: Business Processes in the SAP S/4HANA Finance Solution
Accounts Payable – Account View of Vendor Payment
Figure 38: Accounts Payable – Account View of Vendor Payment
Hint:
In practice, the payment is often executed with the payment program.
The payment program automatically creates the following accounting documents:
Debit – liabilities
Credit – bank clearing account
In the second step, the electronic bank statement (ELBS) creates the following accounting
documents:
Debit – bank clearing account
Credit – bank account
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Lesson: Perform Postings in Accounts Payable
Summary of the Purchase-to-Pay Process
Figure 39: Summary of the Purchase-to-Pay Process
The figure, Summary of the Purchase-to-Pay Process, displays the fully integrated purchaseto-pay process after the creation of a purchase order for a material master record.
LESSON SUMMARY
You should now be able to:
Perform Postings in Accounts Payable
Understand the Integrational Aspects of Accounts Payable
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Unit 2
Learning Assessment
1. The G/L contains the recording of all accounting-relevant business transactions onto G/L
accounts from a business point of view. The result of the recording is an accounting
document.
Determine whether this statement is true or false.
X
True
X
False
2. The chart of accounts is a classification scheme consisting of G/L accounts.
Determine whether this statement is true or false.
X
True
X
False
3. Name the three different kinds of Charts of Accounts that might be used in an SAP
System. Which of these is mandatory?
4. Which of the following are organizational data within an SAP System?
Choose the correct answers.
X
A Customer
X
B Controlling Area
X
C Company Code
X
D Plant
X
E Profit Center
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Unit 2: Learning Assessment
5. For which case is it essential to have the profit center and segment information in all
posting lines?
6. What has to be done in order to have a newly created G/L account appear at a specific
place within the financial statement?
Choose the correct answer.
X
A Change the account type of the G/L account.
X
B Change the account group of the G/L account.
X
C Assign the G/L account to the financial statement version.
X
D Assign a new financial statement version to the chart of accounts.
7. Which of the following transactions can lead to FI documents?
Choose the correct answers.
X
A Create purchase order
X
B Create goods receipt
X
C Create purchase enquiry
X
D Create invoice receipt
8. The Accounts Payable process integrated with MM is also known as the ________ process.
Choose the correct answer.
X
A Vendor-to-buyer
X
B Purchase-to-pay
X
C Plan-to-product
X
D Order-to-cash
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Unit 2
Learning Assessment - Answers
1. The G/L contains the recording of all accounting-relevant business transactions onto G/L
accounts from a business point of view. The result of the recording is an accounting
document.
Determine whether this statement is true or false.
X
True
X
False
Correct. The G/L is always updated with accounting relevant business transaction. An
accounting document is always produced.
2. The chart of accounts is a classification scheme consisting of G/L accounts.
Determine whether this statement is true or false.
X
True
X
False
Correct. The chart of accounts lists and groups all G/L accounts.
3. Name the three different kinds of Charts of Accounts that might be used in an SAP
System. Which of these is mandatory?
Operational Chart of Accounts, Country Chart of Accounts, and Group Chart of Accounts.
The Operational Chart of Accounts is mandatory.
4. Which of the following are organizational data within an SAP System?
Choose the correct answers.
X
A Customer
X
B Controlling Area
X
C Company Code
X
D Plant
X
E Profit Center
Correct. Controlling Area, Company Code, and Plants are organizational units. Customers
and profit centers are master data.
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Unit 2: Learning Assessment - Answers
5. For which case is it essential to have the profit center and segment information in all
posting lines?
Only if the profit center and segment entities are stored in all posting lines is a complete
balance sheet possible for those characteristics. Balance sheets on profit center,
segment, or business-area level are possible in addition to the balance sheets on company
code level.
6. What has to be done in order to have a newly created G/L account appear at a specific
place within the financial statement?
Choose the correct answer.
X
A Change the account type of the G/L account.
X
B Change the account group of the G/L account.
X
C Assign the G/L account to the financial statement version.
X
D Assign a new financial statement version to the chart of accounts.
Correct. You need to assign the G/L account to the specific place in the financial
statement version.
7. Which of the following transactions can lead to FI documents?
Choose the correct answers.
X
A Create purchase order
X
B Create goods receipt
X
C Create purchase enquiry
X
D Create invoice receipt
Correct. The posting of a goods receipt and an invoice receipt both lead to FI document
postings.
8. The Accounts Payable process integrated with MM is also known as the ________ process.
Choose the correct answer.
X
A Vendor-to-buyer
X
B Purchase-to-pay
X
C Plan-to-product
X
D Order-to-cash
Correct. The integration with materials management is part of the purchase to pay
process.
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51
UNIT 3
Management
Accounting
Lesson 1
Outlining the Scope of Management Accounting
53
Lesson 2
Cost Centers
60
Lesson 3
Creating Internal Orders
63
UNIT OBJECTIVES
Outline the scope of management accounting
Understand Cost Centers
Create and analyze an internal order
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52
Unit 3
Lesson 1
Outlining the Scope of Management
Accounting
LESSON OVERVIEW
This lesson provides an overview of management accounting (Controlling). The lesson
explains the basic tasks, processes, functions, transactions, and reporting possibilities of the
Controlling objects cost center and internal order. The lesson also explains the integration of
Management and Financial Accounting.
Business Example
As a member of the finance department of your company, you must familiarize yourself with
various accounting tasks for fulfilling internal requirements, for example, the analysis of
overheads, planning, budgeting, product costing, and profitability analysis. For this reason,
you need to understand management accounting in SAP S/4HANA Finance and the use of
Controlling applications in management accounting.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Outline the scope of management accounting
Management Accounting in SAP S/4HANA Finance
SAP S/4HANA enables the valuation and recording of financial data not only for financial
reporting, but also as the basis for all cost-and revenue-related reporting. As a result, analysts
and managers can work with the same basic data as the company’s financial accountants.
Financial data is tightly integrated with the business processes of SAP S/4HANA logistics and
human resources applications; therefore users can easily obtain detailed information about
cost structures and profit margins. Easy access to this data helps support and enable
management to achieve business goals, such as increasing revenue, maximizing customer
profitability, and reducing operating costs while increasing efficiency, reducing the cost of
goods sold, and improving the visibility of inventory.
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Unit 3: Management Accounting
Overview of Management Accounting
Figure 40: Overview of Management Accounting
The following are the tasks of the displayed controlling objects:
Cost elements = What kind of costs?
Cost centers = Where do the costs arise?
Internal orders, WBS elements, production orders, sales orders = For what do the costs
arise?
Profit centers = In which (balance-sheet-relevant) areas do the costs arise?
Characteristics of profitability analysis = How profitable is a market segment?
Integration of Legal (FI) and Management Reporting (CO)
In G/L Accounting, you can also perform internal management reporting in parallel with legal
reporting. For this purpose, the Profit Center Accounting (PCA) functions are integrated with
G/L Accounting.
As a result, in G/L Accounting, you can generate financial statements for any dimension, just
as for the profit center entity.
Profit Center Accounting (PCA)
PCA evaluates the profit or loss of individual and independent areas within an organization.
These areas are responsible for their costs and revenues.
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Lesson: Outlining the Scope of Management Accounting
Hint:
To learn more about how PCA is mapped within General Ledger Accounting, read
SAP Note 826357.
Controlling Applications
Management accounting provides you with information for management decision making. It
facilitates coordination, monitoring, and optimization of all processes in an organization. This
involves recording both the consumption of production factors and the services provided by
an organization.
While controlling documents actual events, the main task of Controlling is planning. You can
determine variances by comparing actual data with plan data. These variance calculations
enable you to control business flows. You can use income statements, such as contribution
margin accounting, to control the cost efficiency of individual areas of an organization, as well
as the entire organization.
Controlling Application - Cost (and Revenue) Element Accounting (CO-CEL), Cost Center
Accounting (CO-OM-CCA), and Internal Order Accounting (CO-OM-OPA)
Cost (and Revenue) Element Accounting provides you with an overview of the costs and
revenues that occur in an organization. Most of the values are moved automatically from
Financial Accounting to Controlling. Cost and Revenue Element Accounting only calculates
costs that either do not have another expense or have only one expense in Financial
Accounting. Cost and Revenue Element Accounting details the costs and revenues incurred
within the organization. Accrual is calculated here for valuation differences and additional
costs.
Cost Accounting and Financial Accounting are also reconciled in Cost Element Accounting.
This means that the tasks of Cost and Revenue Element Accounting stretch beyond the
bounds of Overhead Cost Controlling.
You use CO-OM-CCA for controlling purposes within your organization. It is useful for a
source-related assignment of overhead costs to the location in which they occurred. CO-OMCCA determines where costs are incurred in the organization. To achieve this aim, costs are
assigned to the subareas of the organization where they have the most influence.
By creating and assigning cost elements to cost centers, you not only make cost controlling
possible, but also provide data for other application components in Controlling, such as Cost
Object Controlling. You can also use a variety of allocation methods for allocating the
collected costs of the given cost center(s) to other controlling objects.
To manage overhead costs, you can use internal orders to collect and control costs according
to the job that incurred them. You can assign budgets for these jobs, which the system
monitors to ensure that the budget is not exceeded.
Controlling Application – Activity-Based Costing (CO-OM-ABC), Product Cost Controlling
(CO-PC), and Profitability Analysis (CO-PA)
Activity-based costing analyzes cross-departmental business processes. The goals of the
whole organization and the optimization of business flows are prioritized. In contrast to the
responsibility and function-oriented basis of CO-OM-CCA, activity-based costing provides a
transaction-based and cross-functional approach for activity output in which several cost
centers are involved. The emphasis is not on cost optimization in individual departments, but
the entire organization.
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Unit 3: Management Accounting
By allocating process quantities based on cost drivers, rather than using overhead
calculation, cost allocation along the value chain is more source-based. Activity-based costing
enables you to cost products more accurately in the overhead areas.
Product Cost Controlling calculates the costs that occur during the manufacture of a product
or provision of a service. It enables you to calculate the minimum price at which a product can
be profitably marketed.
Profitability analysis analyzes the profit or loss of an organization by individual market
segments. The system allocates the corresponding costs to the revenues for each market
segment. Profitability analysis provides a basis for decision making, for example, for price
determination, customer selection, conditioning, and for choosing the distribution channel.
Organizational Units in Management Accounting
Figure 41: Organizational Units in Management Accounting
The operating concern is the highest reporting level for profitability and sales and marketing
controlling, and the central organizational unit in Profitability Analysis (CO-PA) used to
segment and structure the market.
Controlling areas structure the internal accounting operations of an organization within
Management Accounting. They represent closed units that are used to calculate costs. All
internal allocations relate solely to objects that belong to the same controlling area.
Company codes are independent accounting units within Financial Accounting. They
represent the smallest organizational units for which an account group can be set up for the
purposes of external reporting. The process of external reporting involves recording all
relevant transactions and generating all supporting documents for financial reports (such as
balance sheets and profit and loss statements).
Profit Centers are organizational units in accounting that reflect a management-oriented
structure of the organization for the purpose of internal control. You can analyze operating
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Lesson: Outlining the Scope of Management Accounting
results for profit centers using either the cost-of-sales or the period accounting approach. By
calculating the fixed capital as well, you can use your profit centers as investment centers.
Master Data in Management Accounting
Figure 42: The Cost Element
The universal journal contains one field Account that covers G/L accounts and G/L accounts
of type Costs. So costs are part of the chart of accounts and maintenance is executed via
Account master data maintenance.
If you create a G/L account that represents costs, you will always have to assign a CO object,
such as a cost center, a project, an internal order or a CO-PA segment.
Secondary costs are exclusively used in Management Accounting to identify internal cost
flows, such as assessments or settlements.
Reports such as the trial balance will display all posted costs (primary and secondary costs).
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Unit 3: Management Accounting
Figure 43: Master Data Maintenance
With SAP S/4HANA, all business transactions – both external and internal – are recorded on
G/L accounts.
The Chart of Accounts contains all the G/L accounts belonging to Financial Accounting and
Management Accounting. G/L Accounts which represent CO costs are either set up as G/L
Account Type Primary Costs or Revenue or as type Secondary Costs. Within these two cost
types, the SAP S/4HANA system provides special cost element categories for primary and
for secondary costs.
Figure 44: Real and Statistical Postings
Cost and revenue postings in Management Accounting can result in subsequent real and
statistical postings as follows:
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Lesson: Outlining the Scope of Management Accounting
Real postings can be processed. They can be allocated or settled with other controlling
objects. One (and only one) real posting takes place in Management Accounting. The
posting contains the information that is transferred to Financial Accounting for
reconciliation.
Statistical postings are only used for information purposes. You can make as many
statistical postings as you wish.
The account assignment object determines whether a posting is real or statistical, in other
words, the account assignment is either a real or statistical object. For example, the master
data of an overhead cost order is used to determine whether the order is real or statistical.
Only real postings are made for a real order, and likewise, only statistical postings are made
for a statistical order. The cost center is the exception to this rule. You can make real and
statistical postings for a cost center.
If you want to post Management Accounting costs, you need to use the source document (for
example, from the vendor invoice, or the material withdrawal document) to identify the
corresponding real Management Accounting account assignment object. You can enter
additional statistical objects, or the system can derive them. In this simple example, the cost
center is entered in the Financial Accounting document so that the real Management
Accounting posting can be made. The system transfers the profit center from the master data
for the cost center, for the statistical posting.
You always execute statistical postings to the profit center.
LESSON SUMMARY
You should now be able to:
Outline the scope of management accounting
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59
Unit 3
Lesson 2
Cost Centers
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Understand Cost Centers
Cost Centers
Cost Centers
Cost centers define areas of responsibility that incur and influence costs.
Figure 45: The Standard Hierarchy
Before you can create cost centers, you must first define a standard hierarchy. Specify the
name of the standard hierarchy when you create the controlling area.
The standard hierarchy is a structure to which all cost centers within the controlling area must
be assigned. How you define your structure is generally up to you. SAP, however,
recommends that you define the structure so that it reflects the internal areas of
responsibility and the controlling and decision-making structures within your organization.
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Lesson: Cost Centers
These are usually the same as the internal functional areas depicted in your company's
organization chart.
Figure 46: Cost Centers within the Standard Hierarchy
The cost center is the location where the costs are incurred. Cost centers can be set up based
on functional requirements, allocation criteria, activities or services provided, geographic
location and/or areas of responsibility.
For the purposes of Overhead Cost Controlling, cost centers are grouped together in decision,
control, and responsibility units. To map this structure, you create the cost center standard
hierarchy.
Each level or node of the standard hierarchy is a cost center group. You can assign cost
centers and nodes in parallel to one common hierarchy level.
You can create or change cost centers either using the relevant menu entry or directly in the
standard hierarchy maintenance function.
Cost centers that are created or changed from within the standard hierarchy have the status
Inactive. This means that they are not handled as account assignment objects in Management
Accounting. The assignments can only be checked and the cost center once released will then
be active.
If you want to assign a cost center to another hierarchical level, you can do this in the
standard hierarchy maintenance by a simple reassignment of the cost center. In other words,
you do not need to make changes to your cost center master data.
The cost center category is an indicator in the cost center master data, which specifies the
category for the cost center. Examples include administration, production, or sales and
distribution. You can use your own cost center categories, or those supplied by SAP.
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Unit 3: Management Accounting
LESSON SUMMARY
You should now be able to:
Understand Cost Centers
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Unit 3
Lesson 3
Creating Internal Orders
LESSON OVERVIEW
This lesson explains another object of overhead cost controlling — the internal order. The
lesson also explains how to create internal orders.
Business Example
As a member of the finance department of your company, you need to plan for overheads
cost, and also exercise control through budgets. Internal orders are objects within the SAP S/
4HANA solution that help to fulfill this requirement. For this reason, you need to have an
understanding of internal orders.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Create and analyze an internal order
The Internal Order
Figure 47: Different Scenarios for Internal Orders
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Unit 3: Management Accounting
Internal orders in the SAP system describe individual jobs within a controlling area. Orders
support action-oriented planning, monitoring, and allocation of costs.
Internal orders may be used for a variety of purposes, such as the following:
To monitor internal actions settled to cost centers (overhead cost orders)
To monitor internal actions settled to fixed assets (investment orders)
To offset postings of accrued costs calculated in Management Accounting (accrual
orders)
To display cost accounting sections of sales orders in Sales Order Management and
include revenues that are not part of the company's core business (orders with revenues)
The management of internal orders represents the most detailed operational level of cost and
activity accounting and can be used for the following purposes:
You can consider costs according to aspects other than those used in cost center
accounting.
You can compare in-house production and external procurement costs for decision
making purposes.
The example we use in this course is based on investment orders.
Figure 48: Investment Orders
The Investment Management (IM) component provides functions supporting the planning,
investment, and financing processes involved in capital investment measures within your
enterprise. You can control measures that your company undertakes for the purpose of
producing long term assets for its own use, and which have to be entered in the balance sheet
as assets under construction. A prerequisite for this is an investment profile that is stored in
the order master record.
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Lesson: Creating Internal Orders
Measures are represented in the system by either internal orders or Work Breakdown
Structure (WBS) elements. You can create an internal order that automatically includes an
asset under construction. A prerequisite for this is the investment profile in the order master
data.
In the construction phase, you post all transactions to the order. During periodic settlement,
all debits that do not have to be capitalized are settled to a Management Accounting receiver,
such as a cost center. All items that are not to be settled to receivers in Management
Accounting and that require capitalization are settled directly to the asset under construction.
The monthly evaluation balances display the capital investment undertaking in the asset
inventory.
The full settlement takes place when the capital investment measure is completed. In
complete or partial activation, in the order settlement rules, you enter the final assets that are
the basis for the settlement of the asset under construction. The debits settled to the asset in
construction are reposted to the final assets and the asset under construction is
automatically credited.
Figure 49: Main Functions and Tasks of Internal Orders
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Unit 3: Management Accounting
Figure 50: Internal Orders Master Data
The master data defines the attributes of an order, including organizational assignments.
Overhead cost orders, like cost centers, are assigned to a company code and a controlling
area.
To transfer values posted on orders to a profit center, you enter the profit center in the order
master data. All actual postings to the overhead order are passed along automatically to the
profit center. Plan values also can be transferred to profit center planning if required.
If you assign an order to a WBS element, you can monitor the value of the order in the Project
System (PS). In addition, you can process the settlement of all orders assigned to the project
automatically during project settlement.
The remaining assignments possess informative value, meaning that they can be evaluated in
the internal order information system. This information does not influence the posting of plan
or actual costs.
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Lesson: Creating Internal Orders
Figure 51: Event-Based Postings on Internal Orders
Orders are updated by event-based postings from different SAP application components, like
in Cost Center Accounting.
In Financial Accounting, you can assign postings of G/L accounts of G/L Account Type
Primary Costs or Revenue. They will be called primary costs in the following section.
Examples for primary costs are costs for external services and deliveries to an overhead
order.
In Materials Management, goods receipts and goods issues may result in primary cost
postings to an overhead order.
Controlling
To map commitments manually in Management Accounting, you need to enter funds
commitments.
Reposting functions allow you to post primary costs to an order. You can post G/L
Accounts of type secondary costs (simply called secondary costs) from a cost center to an
order with direct activity allocations.
You can record statistical key figures to use as the basis for allocations to your orders and
for analyzing your orders.
LESSON SUMMARY
You should now be able to:
Create and analyze an internal order
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Unit 3
Learning Assessment
1. In G/L Accounting, _______________ functions are integrated within G/L Accounting to
perform internal management reporting in parallel with legal reporting.
Choose the correct answer.
X
A Cost Center Accounting
X
B Internal Order
X
C Profit Center Accounting
X
D Cost (and Revenue) Element Accounting
2. Cost centers that are created or changed from within the standard hierarchy have the
status Active.
Determine whether this statement is true or false.
X
True
X
False
3. Internal orders settled to cost centers are also known as overhead orders.
Determine whether this statement is true or false.
X
True
X
False
4. Planning, budgeting, and actual postings are some of the main functions of internal
orders.
Determine whether this statement is true or false.
X
True
X
False
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Unit 3
Learning Assessment - Answers
1. In G/L Accounting, _______________ functions are integrated within G/L Accounting to
perform internal management reporting in parallel with legal reporting.
Choose the correct answer.
X
A Cost Center Accounting
X
B Internal Order
X
C Profit Center Accounting
X
D Cost (and Revenue) Element Accounting
Correct. The profit center accounting is embedded in the G/L for all accounts and can be
used for internal and external reporting.
2. Cost centers that are created or changed from within the standard hierarchy have the
status Active.
Determine whether this statement is true or false.
X
True
X
False
Correct. Cost centers that are created or changed from within the standard hierarchy
have the status Inactive. This means that they are not handled as account assignment
objects in Management Accounting.
3. Internal orders settled to cost centers are also known as overhead orders.
Determine whether this statement is true or false.
X
True
X
False
Correct. Of the various order types, those that are settled periodically to cost centers are
overhead orders.
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Unit 3: Learning Assessment - Answers
4. Planning, budgeting, and actual postings are some of the main functions of internal
orders.
Determine whether this statement is true or false.
X
True
X
False
Correct. Internal orders support planning, budgeting and actual postings.
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UNIT 4
Financial Accounting –
Asset Accounting and
Accounts Receivable
Lesson 1
Posting and Analyzing in Asset Accounting
72
Lesson 2
Posting and Analyzing in Accounts Receivable
80
UNIT OBJECTIVES
Post and analyze in Asset Accounting
Post documents and analyze Accounts Receivable
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Unit 4
Lesson 1
Posting and Analyzing in Asset Accounting
LESSON OVERVIEW
This lesson explains tasks, processes, functions, transactions, and reporting possibilities of
Asset Accounting (FI-AA).
Business Example
As a member of the finance department of your company, you need to analyze different
subprocesses within financial accounting of your organization. FI-AA is one of such
subprocesses which covers the complete life cycle of assets. For this reason, you need to
have an understanding of posting and analyzing in FI-AA.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Post and analyze in Asset Accounting
Asset Accounting/Fixed Assets
Figure 52: FI-AA/Fixed Assets
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Lesson: Posting and Analyzing in Asset Accounting
FI-AA encompasses the entire lifetime of the asset from purchase order or the initial
acquisition (possibly managed as an asset under construction) through to its retirement. The
system calculates and posts, to a large extent automatically, the values for depreciation and
interest between these two points (acquisition and retirement) in time. With the Asset
Explorer and many standard reports, SAP helps you to analyze and report fixed asset values.
Reconciliation accounts link the subledgers to G/L Accounting in real time.
Note:
As soon as a posting is made to a subledger account, the same posting is made to
the respective reconciliation account in G/L Accounting.
Components Related to FI-AA:
The Plant Maintenance (PM) component offers functions for the technical management of
assets in the form of functional locations and as an equipment.
Keyword: Enterprise Asset Management
The Treasury (TR) component offers special functions for managing financial assets.
Asset Master Record
Figure 53: Asset Master Record
FI-AA records all business transactions in asset management. You create an asset master
record for each of your company’s assets. All postings that are executed for the asset
(acquisitions, retirements, depreciations, and so on) are recorded within the assigned
company code.
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
Hint:
It often happens that asset lists and movements have to be evaluated differently
for different purposes. FI-AA, therefore, uses depreciation areas to calculate
different values in parallel for each fixed asset.
Examples of Different Valuation Approaches:
Book depreciation according to regional requirements
Financial statements for tax purposes (as another valuation is permitted)
Internal accounting (costing or cost-accounting depreciation)
Parallel accounting standards for the group balancing of accounts (according to
International Financial Reporting Standards (IFRS), United States Generally Accepted
Accounting Principles (U.S. GAAP), and so on)
Depreciation areas are grouped together, according to the requirements of a specific country
or economic area, into a chart of depreciation. These charts of depreciation are usually
country-specific and you define them independently of the other organizational units. You can
use a chart of depreciation, for example, for all the company codes in a given country. The
assignment of the chart of depreciation to each company code is the first step to implement
FI-AA.
Figure 54: Depreciation Areas and the Financial Statements
You perform a valuation of your fixed assets by applying different valuation approaches for
different business, taxation, and legislation purposes. With Asset Accounting (FI-AA) as a
Financial Accounting (FI) subledger, you can manage different valuation approaches for each
asset in depreciation areas. However, as financial statements are not required for the values
of all depreciation areas, you need to define the settings that must be transferred to FI in
Customizing and describe how this transfer occurs.
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Lesson: Posting and Analyzing in Asset Accounting
Asset Explorer
Figure 55: Asset Explorer
The Asset Explorer is a helpful and powerful tool for displaying and monitoring the values of
an individual fixed asset.
Asset Explorer displays the following elements:
Both planned and posted asset balance sheet values and depreciation
All transactions on the asset
Developments in a business area over several fiscal years
Functions of the Asset Explorer:
Calculating transparent depreciation and displaying depreciation key (in detail)
Accessing Financial Accounting (FI) document
Displaying value development over several years and at the same time in several
depreciation areas
Converting currency amounts
Calling fixed asset reports
Printing and exporting functions
Simulating transactions and changing depreciation term
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
Integrated Asset Acquisition
Figure 56: Integrated Asset Acquisition
Integrated Asset Acquisition
With SAP S/4HANA asset acquisitions can be posted from within FI-AA or integrated through
FI-AP or MM. If an integrated acquisition is posted, two journal entries are created. The first
one posts the values to a settlement account and is the same for all ledgers being used.
The second one transfers the values from the settlement account to the account used for the
acquisitions together with the respective valuation of the different depreciation areas. These
postings are ledger group specific.
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Lesson: Posting and Analyzing in Asset Accounting
Closing Activities in Asset Accounting
Figure 57: The Depreciation Posting Run
Figure 58: Posting Depreciation
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
Every asset transaction in FI-AA immediately causes a change of the forecasted (planned)
depreciation. However, an asset transaction does not immediately cause an update of the
depreciation and value adjustment accounts for the financial statements. The depreciation is
only posted to Financial Accounting when you run the (periodic) depreciation posting run.
Some details about the depreciation posting run:
When the system posts depreciation, it creates collective documents for all assets. It does
not create separate documents for each asset.
The depreciation posting run is able to post depreciation, interest, and revaluation.
To access depreciation posting run, on the SAP Easy Accessscreen, choose
Accounting
Financial Accounting
Fixed Assets Periodic Processing
Depreciation
Run Execute.
The depreciation run is carried out using the program FAA_DEPRECIATION_POST.
Asset History Sheet
Figure 59: Transaction Types in Asset Accounting
The transaction type is an addition to the asset posting keys 70 (debit) and 75 (credit). It has
to be included when posting to an asset account. The transaction type is necessary for asset
accounting. It specifies exactly where the asset posting is listed in the asset history sheet.
The transaction type is the distinguishing characteristic of the various asset postings, for
example:
Buying and selling
Credit memos
Acquisitions from internal production
Adjustment postings
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Lesson: Posting and Analyzing in Asset Accounting
Retirements without revenue
Depreciation and appreciation
Figure 60: Asset History Sheet
The figure, Asset History Sheet, shows a legal portion of a financial statement.
The asset history sheet (program name RAGITT_ALV01) is a list, which displays the progress
of the history of a fixed asset from its opening balance to the closing balance.
The following history progress of a fixed asset is displayed in the asset history sheet:
Acquisitions
Retirements
Transfers
Accumulated depreciation
Hint:
The asset history sheet is the most important and most comprehensive report
for the year-end closing or for an interim financial statement.
As with all other lists, it can be set up with any sort versions, and total on any
group level. You can also create a compact total list without individual asset
information.
The structure of the asset history sheet varies widely from country to country, depending on
tax laws. SAP provides country-specific versions of the asset history sheet that satisfy the
legal requirements of the given country.
It is also possible to define the line and column structure of the history sheet. At the same
time, you can define values that the system should display in lines of the report. The
parameter you use to control that display is the transaction type. This means that you need to
enter a transaction type in every asset transaction.
LESSON SUMMARY
You should now be able to:
Post and analyze in Asset Accounting
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Unit 4
Lesson 2
Posting and Analyzing in Accounts Receivable
LESSON OVERVIEW
This lesson explains tasks, processes, functions, transactions, and reporting possibilities of
Accounts Receivable.
Business Example
As a member of the finance department of your company, you need to post and analyze
documents in Accounts Receivable. For this reason, you need to have an understanding of
posting and analyzing in Accounts Receivable and the order-to-cash process.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Post documents and analyze Accounts Receivable
Accounts Receivables
Overview
Figure 61: Components of Financial Accounting
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Lesson: Posting and Analyzing in Accounts Receivable
The Financial Accounting (FI) subledger Accounts Receivable records and administers
accounting data of all customers. It is also an integral part of sales management. The system
records all postings in Accounts Receivable directly in the G/L. The system updates different
G/L accounts depending on the transaction involved for example, receivables, down
payments, and bills of exchange.
The system contains a wide range of tools that you can use to monitor open items, such as
account analyses, alarm reports, due date lists, and a flexible dunning program. The
correspondence linked to these tools can be individually formulated to suit your
requirements.
This is also the case for payment notices, balance confirmations, account statements, and
interest calculations. You can assign incoming payments to due receivables using userfriendly screen functions or by electronic means, such as Electronic Data Interchange (EDI)
and data telecommunication.
The payment program can automatically carry out direct debiting and down payments. There
is a wide range of tools available for documenting the transactions that occur in Accounts
Receivable, including balance lists, journals, balance audit trails, and other standard reports.
When drawing up financial statements, the items in foreign currency are revalued, customers
who are also vendors are listed, and the balances on the accounts are sorted by remaining
life.
Note:
Accounts Receivable is not only one of the branches of accounting that forms the
basis of adequate and orderly accounting, it also provides the data required for
effective credit management. This is because of its close integration with the
Sales and Distribution (SD) component.
Through its link to Cash Management, it is also able to provide important
information for the optimization of liquidity planning.
Customer Master Data
In the SAP system, all business transactions are posted to and managed in accounts. Before
posting a customer invoice, you must create a master record for each account that you
require. Then, you can post a customer invoice within the Accounts Receivable application.
The master record contains the data that controls how business transactions are recorded
and processed by the system. It also includes all information about the customer with whom
you need to conduct business.
Both the accounting (FI-Accounts Receivable) and the sales (SD) departments of your
organization use customer master records. By storing customer master data centrally, you
can access this data throughout your organization, and avoid the need to enter the same
information again.
You can also avoid inconsistencies in master data by maintaining it centrally. For example, if
the address of one of your customers changes, you only have to enter this change once, and
your accounting and sales departments will always have the updated information.
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
Figure 62: Business Partner
There are redundant object models in the traditional SAP ERP system. In SAP ERP, the vendor
master and customer master are used. In SAP S/4HANA, the mandatory (for all releases
from 1511 upwards) approach is the Business Partner. The Business Partner is now capable of
centrally managing master data for business partners, customers, and vendors. With current
development, Business Partner is the single point of entry to create, edit, and display master
data for business partners, customers, and vendors.
Figure 63: Master Data Record
The data within a business partner is structured like a matrix. On the one hand, the generic
business partner structures, such as General Data, Business Partner Roles, Business Partner
Categories and Business Partner Groupings can be found. Besides that the structure of the
module specific master data, such as an FI Customer, an FI Vendor, or an MM Supplier
determines which information is needed and can be found in a business partner.
Generic Business Partner StructuresGeneral Data
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Lesson: Posting and Analyzing in Accounts Receivable
Application-neutral data, such as name, address, bank details, and payment cards, is stored
in the general data of the business partner master record.
Business Partner Role
A business partner can have several roles, such as a contract partner (FI-CA), FI Vendor (FIAP), FI Customer (FI-AR), Customer (SD), Supplier (MM), prospect (potential customer), or
business partner (general). In general, a Business Partner (BP) role corresponds to a
business context in which a business partner can appear and provides the application specific
data.
In our training system, we use the standard business partner role FI Customer for Accounts
Receivables. This business partner role allows you to enter the company code specific (=
Accounts Receivables specific) data for a BP.
Business Partner Category
The Business Partner category is the term used to classify a BP as a natural person (for
example, a private individual), group (for example community of heirs), or organization (legal
entity or part of a legal entity, such as a department of a company). The business partner
category determines which fields are available for data entry.
For example, if you want to create a BP as an organization, you are able to enter the legal form
in one of the fields. For a person, you enter the first name, last name, gender, and so on. When
a BP is created, the business partner category must be selected (required entry). Assignment
of the business partner category is static and cannot be changed once the BP has been
created.
Business Partner Grouping
Each BP has to be assigned to a grouping when you create the BP. The grouping determines
the number range (external/internal). You cannot change the assignment afterwards. You
can define the groupings, their descriptions, and the associated number range in customizing.
Modular Specific Master Data (e.g. Customer)General Data Segement
This segment contains all information that is used by every company code and by every sales
area that deal with that customer. Most of the information (such as name, address...) is
already included in the general data of a central BP. Still there might be some information that
is only added if a respective business partner role (FI Customer) is chosen.
Company Code Segment
The company code segment includes all FI related data that might differ between company
codes that work with the same customer. The reconciliation account, dunning procedures
and payment terms are just some examples for data within the company code segment.
Sales Area Data
Just as the company code segment the sales area segment stores data that differs between
sales areas. While the company code segment stores information that is needed from an FI
perspective, the sales area segment is responsible for data that is needed from an SD
perspective.
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
Figure 64: Business Partner Integration
Business Partner - Customer/Vendor Integration
Accounts Payables/Receivables uses the SAP Business Partner to manage the vendor
master records. Technically, this sub ledger uses its own vendor/customer master records,
which are integrated in all accounting transactions, such as creating business transactions on
accounts and processing posting data. Therefore we require business partners that are
managed as vendors or customers in Financial Accounting and as BP in other applications, to
exist synchronously.
The Customer/Vendor Integration takes place in the background while the system processes
the BP master data. When you create or change a BP, the system creates or changes all
required fields in the vendor or customer account according to the information in the BP. The
customer or vendor master record is linked to the BP according to the settings made for
synchronization control and Customer/Vendor Integration in customizing.
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Lesson: Posting and Analyzing in Accounts Receivable
Postings in Accounts Receivables
Figure 65: Posting a Customer Invoice
Customer Invoices
You can easily create and post customer invoices using the Fiori app - Create Outgoing
Invoices. This type of customer invoice entered directly in Accounts Receivables is a
miscellaneous invoice, without reference to a purchase order.
Figure 66: Customer Line Item Display
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
The figure, Customer Line Item Display, shows the detailed information about a customer in
the FI subledger Accounts Receivables.
Figure 67: Incoming Payments
Incoming payments can be dealt with in several ways in different companies and countries.
Incoming payments are posted as shown in the figure, Incoming Payments.
The items are cleared if the customer pays open items in the full amount or with an agreed
cash discount.
If a minor payment difference exists, this can be charged off automatically. The maximum
amount that constitutes a minor payment difference is defined in the tolerance group
settings.
Any payment difference outside the tolerance group settings must be dealt with manually.
The two methods of posting payment differences are as follows:
-
Partial payment: The item being short-paid does not clear. A new open item in the
amount of the payment is created on the credit side. This credit entry shows up right
above the open item being paid and it references the open item being short-paid.
-
Residual item: The open invoice is cleared and a new open item (residual item) in the
amount of the payment difference is created.
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Lesson: Posting and Analyzing in Accounts Receivable
Figure 68: Clearing Customer Line Items
With the SAP Fiori app Incoming Payments , you create the displayed posting record – Bank to
Customer.
After you enter the payment document, the customer outstanding is cleared and the amount
on the bank account increases.
Hint:
In practice, after the customer pays, the incoming payment is typically
processed with the Electronic Bank Statement (ELBS).
In that case, the system usually creates the following two documents:
Bank to Bank Clearing Account
Bank Clearing Account to Customer
At the end, you achieve the same result. The customer outstanding is cleared
and the amount on the bank account increases.
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
Order-to-Cash Process
Figure 69: Order-to-Cash Process
For simplicity reasons, in SAP standard training of S4F00, you can enter the customer
invoices directly in the Accounts Receivable application. In practice, the invoice is often
created in an integrated way in the SD application of Logistics.
The displayed integrated process is called the order-to-cash process.
The sales order (displayed as the Incoming Order process step) is the basis of the sales
process. Using a sales order effectively, all services with regard to the customer run off as an
integrated process.
The SAP SD component uses interlinked documents to initiate a workflow.
In the SAP system, sales organizations are legally responsible for sales. There can be several
sales organizations within one company code. Every sales organization can use different
distribution channels to sell goods. The combination of a sales organization and a distribution
channel is also called a distribution chain.
The sales order is generated at the level of the distribution chain. The ordered items can apply
to different divisions.
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Lesson: Posting and Analyzing in Accounts Receivable
Hint:
Many different scenarios can be handled with sales orders in SD.
Two examples of the scenarios, also relevant in accounting are:
The (anonymous) sale of products from stock
The sale of services displayed in the system as make-to-order production
Sale of Products from Stock
As this sale does not involve an activity output because the material is already evaluated in
stock, it is handled with a sales order item that is not a cost object.
This means that the system derives costs and revenues automatically from the material
production costs and from the sales prices respectively. In this case, you do not assign the
costs to a sales order item. On the day of shipping, an outbound delivery document is created.
The delivery cannot be billed until the goods have been withdrawn from the stock and posted
as a goods issue.
You can create a transport order that generates a picking order. The required goods are
removed from the stock and prepared for delivery. The goods to be delivered are posted as
goods issue. A goods issue document is created in Materials Management. An accounting
document is also created in FI to post the goods issue to the correct G/L accounts.
The next step in the SD process is billing. A billing document is created in SD and a printed
invoice is sent to the customer. From an Accounting perspective, billing is accounted when
the revenue occurs.
FI allows you to analyze the open items and dun overdue items automatically. While doing
this, a dunning level is defined for which the value is higher if the number of days in arrears is
higher. Dunning fees and interest can be calculated on the basis of this dunning level. The
dunning text that is selected also depends on the dunning level. All sent dunning notices to
the customer are administered in a dunning history.
Automatic dunning can be triggered for only one account that is individual dunning or the
dunning program executes automatic dunning for all or a limited number of customers. The
customers are selected in the dunning run and checked for overdue items. Finally, a check is
made as to whether dunning notices have to be sent and dunning levels are allocated.
Hint:
The relationship with the customers, the so called end-to-end process of
receivables management, can be significantly improved with applications of
Financial Supply Chain Management.
The payment received from the customer is always posted in FI.
Unlike the product sale from stock, the provision of a service represents a direct activity
output that can also be modeled using a sales order item.
To enable Controlling for this, the sales order item is created as a cost object. This means that
the costs and later also the revenues can be posted specifically and directly to the sales order
item.
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Unit 4: Financial Accounting – Asset Accounting and Accounts Receivable
The processing steps, such as incoming order, billing, payment, and dunning are nearly
identical to the sale from stock process. In the services example, however, no goods are
transported or delivered.
The sales order item cost object can be assigned for all transactions of the activity output
process directly. For example, transactions such as internal activity allocations, external
invoices, material withdrawals, or overhead rates can be posted in the related sales order
item. When the service output is finished, you can pass on the costs and revenues through
settlement to the Profitability Analysis (CO-PA).
Accounts Receivables Analysis
Figure 70: Accounts Receivables Manager
SAP Fiori offers a big amount of different analytical SAP Fiori apps in order to analyze your
day to day business in accounts receivables.
LESSON SUMMARY
You should now be able to:
Post documents and analyze Accounts Receivable
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Unit 4
Learning Assessment
1. When the system posts depreciation, it creates separate documents for all assets.
Determine whether this statement is true or false.
X
True
X
False
2. Which parameter is used to control the display of asset history sheet?
Choose the correct answer.
X
A Posting key
X
B Document type
X
C Transaction type
3. On what basis can you calculate the dunning fees and interest?
Choose the correct answer.
X
A Number of invoices
X
B Dunning level
X
C Number of payments
X
D Number of dispute cases
4. The delivery cannot be billed until the goods have been withdrawn from the stock and
posted as a __________.
Choose the correct answer.
X
A Goods issue
X
B Purchase order
X
C Customer invoice
X
D Invoice receipt
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91
Unit 4
Learning Assessment - Answers
1. When the system posts depreciation, it creates separate documents for all assets.
Determine whether this statement is true or false.
X
True
X
False
Correct. The system posts a separate line item for each asset and depreciation area, but
the documents group depreciation postings for multiple assets.
2. Which parameter is used to control the display of asset history sheet?
Choose the correct answer.
X
A Posting key
X
B Document type
X
C Transaction type
Correct. The transaction type is mapped to the asset history sheet display.
3. On what basis can you calculate the dunning fees and interest?
Choose the correct answer.
X
A Number of invoices
X
B Dunning level
X
C Number of payments
X
D Number of dispute cases
Correct. The dunning level defines the amount of the fees and the interest applied.
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92
Unit 4: Learning Assessment - Answers
4. The delivery cannot be billed until the goods have been withdrawn from the stock and
posted as a __________.
Choose the correct answer.
X
A Goods issue
X
B Purchase order
X
C Customer invoice
X
D Invoice receipt
Correct. The goods issue is required before posting billing a delivery,
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93
UNIT 5
Understanding the
Central Finance Option
Lesson 1
Understanding the Central Finance Option
95
UNIT OBJECTIVES
Understand the Central Finance Option
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94
Unit 5
Lesson 1
Understanding the Central Finance Option
LESSON OVERVIEW
This lesson describes possibilities to utilize Central Finance as an option to integrate different
finance systems into one.
Business Example
As a member of the finance department of your company, you need to find ways to
consolidate finance data from different systems.
For this reason, you need to have an understanding for the Central Finance Option within S/
4HANA Finance.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
Understand the Central Finance Option
Central Finance Option
Central Finance offers a non-disruptive step towards system consolidation. It helps
companies report on financial figures sourced from different systems. These systems might
be running Classic G/L or the New G/L. The systems may have different customizing settings
and diverse master data, such as, Chart of Accounts, Controlling Areas, Operating Concerns,
Material Numbers, Product Hierarchies, and so on. Reposting through the Accounting
Interface to a Central Finance system harmonizes data but also retains line item-based detail.
A Central Finance system can be established either on-premise or in the Cloud. In the Cloud,
deployment scenario data is replicated using the same mechanism that is used in on-premise
installations.
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95
Unit 5: Understanding the Central Finance Option
Figure 71: Central Finance
On the left of the figure, Central Finance, you see the source systems – these are the SAP ERP
systems that you do not want to change. They can be on any release of SAP (out-of-the-box
functionality supports systems down to ERP 6.0 – older releases have to be integrated in a
services project), or a non-SAP system. Often they have been over-customized, making it too
expensive to migrate or upgrade the system to take advantage of new innovation.
Data is replicated into the Central Finance instance using the SAP Landscape Transformation
Replication Server (SAP SLT). The SLT can be located on premise or in the SAP HANA
Enterprise Cloud. It pulls the data directly from the database without having to adapt to
programs of non-SAP applications.
There is a Central Finance Accounting Interface, which reposts documents and creates some
more ephemeral cost objects.
Next, master data is mapped either using SAP Master Data Governance or another MDG
solution (which can be in the same system or somewhere else in the landscape, or in the case
of SAP MGD, deployed in SAP HANA Enterprise Cloud). For customers that do not have an
existing Master Data Governance solution, there are basic mapping tables in the solution for
key master data (chart of accounts, customers, suppliers, and others). There is also a
Business Add-In (BAdI) which can be used for customer-specific mapping logic.
Error correction capabilities for FI documents are provided by the Error Correction Suspense
Accounting functionality; this provides a worklist-based approach for correcting replication
errors or mapping errors. Once the mapping and checks have been completed, all postings go
through the standard internal Accounting Interface into FI/CO (in the SAP HANA database).
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96
Lesson: Understanding the Central Finance Option
Figure 72: Central Finance Accounting Interface
Through SLT, there are three interfaces that feed data from the source systems into the
Accounting Interface of the target system:
An interface for reposting FI/CO postings: Financial documents that are posted in the
source system get reposted as new FI documents in the Central Finance system. If these
postings are relevant to CO (expenses on cost elements), CO are updated, too.
An interface for reposting CO postings: This interface reposts CO postings where the CO
document is the loading document. In contrast to the interface for FI/CO postings, these
are postings that are not necessarily reflected in Financials in the source system
(sometimes only for reconciliation purposes). For example, postings on secondary cost
elements.
An interface for replicating certain cost objects (such as, production orders, internal
orders, or QM orders).
The posted documents are stored in the universal journal entry of the SAP S/4HANA system.
It is possible to take advantage of New-GL features within the Central Finance system as well
as the ability for flexible reporting based on line-items instead of pre-aggregated totals.
Furthermore, SAP Fiori user interfaces and reporting tools can be used in the Central Finance.
Reporting with the speed of SAP HANA is available on line-item levels.
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Unit 5: Understanding the Central Finance Option
Figure 73: Document Relationship Browser
In the document header of the newly posted FI document in the Central Finance system, new
fields have been added to reference back to the original FI document. By double-clicking the
reference document number, it is possible to navigate back to the source SAP ERP system to
view the original FI document.
Figure 74: Navigation to Source System
The new postings offer improvements to the current Business Application Programming
Interface (BAPI) (better extensibility, industry solution inserts, custom fields and so on), it is
not limited to 999 line item limit anymore, and is purposely built for Central Finance use.
Master data harmonization in existing distributed landscapes is a real challenge. Documents
have to be "forced to fit" and stocks are reposted or transferred. One major benefit of Central
Finance is that master data mappings are performed before reposting in the central system.
This allows for the harmonizing of the different master data of the various source systems on
the fly. As a consequence, a harmonized financial reporting can be achieved across the entire
group. The new system will be "clean".
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Lesson: Understanding the Central Finance Option
The main restriction when implementing is for the centrally executed processes to not result
in back-postings to the source systems in order to maintain the integrity (completeness and
so on) and legacy system status of those systems.
When implementing Central Finance, the amount of configuration, customizing, and master
data synchronization required depends on the scope of the processes desired. Many
scenarios, especially core G/L scenarios, are achievable with limited effort. More complex
scenarios, or scenarios beyond (core G/L) finance might be challenging or in certain cases
may not be feasible.
LESSON SUMMARY
You should now be able to:
Understand the Central Finance Option
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99
Unit 5
Learning Assessment
1. With the Central Finance scenario, a separate SAP S/4HANA system is required.
Determine whether this statement is true or false.
X
True
X
False
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100
Unit 5
Learning Assessment - Answers
1. With the Central Finance scenario, a separate SAP S/4HANA system is required.
Determine whether this statement is true or false.
X
True
X
False
Correct. The central finance scenario relies on a separate SAP S/4HANA system
connected with the legacy ERP system(s).
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