SAP S/4HANA is integrated with end-to-end business processes like:

• SAP Signavio S/4HANA Business Transformation
• SAP S/4HANA Lead-to-Cash Intelligent Enterprise
• SAP S/4HANA Digital Supply Chain
• S/4HANA Digital Supply ChainWarehouse Management

This page describes basic aspects of S/4HANA Accounting from an architectural view.

Integrate SAP S/4HANA Accounting Business Processes

S/4HANA accounting is integrated into all intelligent end-to-end S/4HANA business processes.

S/4HANA Intelligent ERP Innovations

This sections provides an overview of innovation examples, introduced by the Accounting Road Map.

Predictive Accounting

Predictive Accounting is a bottom-up approach to predict future outcomes based on enriched actuals. In contrast to planning which delivers outcomes based on defined goals.

Predictive journal entries get created for sales orders in a extension ledger which has to be activated in margin analysis. These journal entries are stored in table ACDOCA with sales order number in field SRC_AWREF. Actual goods issue and invoices postings reverse the predictive journal entries and reduction posting entries get created.

Selected Best Practice scope items and Fiori apps are:

• Scope Items

  • Finance Accounting for Incoming Sales Orders (2FD) provides a report of all incoming sales orders for a given fiscal period
    • Gross Margin - Presumed/Actual for Cost Accountants - Sales to display predictive journal entries along with actuals
  • Sales SAP Fiori Analytical Apps for Sales (1BS) provides key information about different stages of a sales order

• Fiori Apps

  • Incoming Sales Orders get translated into predictive revenue
  • Monitor Predictive Accounting with
    • information
      • about the quality of the predictive accounting
      • number of errornous orders
    • trigger reprossing manually
  • Display Journal Entries in T-Account View to analyse journal entries of the external ledger
  • Sales Accounting Overview allows combining general and extension ledger data
  • Gross Margin Presumed/Actual show the prediction postings with actual postings to analyze the expected results at period/quarter end

S/4HANA Accounting Data Model Simplifications

• Universal Journey
  • combination of sub-ledgers into single table ACDOCA
    • includes General Ledger Accounting, Profitability Analysis, Management Accounting, Asset Accounting, Material Ledger
    • reduces the need of reconciliation
    • ledgers are sections of the ACDOCA table containing ledger specific dimensions required for reporting
    • Management Accounting
      • stores cost data with value types actual data '04' and actual statistical data '11'
      • primary postings are created as one data record for general ledger items with assigned cost objects
      • secondary postings are captured with sender-receiver relationships triggered by allocations or settlements
  • Obsolete Structures
    • General Ledger Accounting total tables with dimensions for planning and parallel ledgers reporting
    • compatibility views are used for backwards compatible access
• New GL
  • realtime integration with reconciliation of G/L accounting and controlling
  • Secondary cost elements represented as G/L accounts simplify master data maintenance
• vendor and customer business partner share general and accounting data

S/4HANA Financial Accounting

New General Ledger and Material Ledger activation is mandatory in S/4HANA.

S/4HANA Financial Accounting Structure

Organizational Units

Company Codes are central organizational units in external accounting and can only be assigned to one controlling are. They are part of the general ledger account data and smallest entities to draw financial statements like Balance Sheets or Profit & Loss Accounts. Company codes correspond to single legal entities, are usually country specific and defines currencies. FI supplier and customer business partner roles are assigned to company codes.

• Segments
  • represent accounting areas like line of business or geographical
  • are used as dimension for external reporting
  • can be assigned to profit centers or manually entered in Financial Accounting
  • enable financial statements across several company codes
  • document splitting is prerequisite for segment reporting
  • fulfill segment reporting requirements for International Financial Reporting Standard (IFRS) and US GAAP

Structuring Unit

• Business Area can be assigned to line items for external segment reporting across company codes (independent n:n relationship)

S/4HANA Business Partner

Business partner usage is mandatory in S/4HANA. General and accounting data for customers and vendors are unified. Business Partners are categorized as person, group or organization. Roles decide about the usage of business partners.

• Vendors hold purchasing information specified on company code level and Supplier role assigned
• Customers are related with sales information

S/4HANA Financial Accounting Elements

• Chart of Account (COA) is the level where account number, G/L account type and group are maintained

  • Account Groups
    • enable grouping of accounts with
      • same account type
      • similar business functions like cash, expense, revenue, other balance sheet accounts
    • have number range assignments

• General Ledger

  • gets created with company code and chart of account
  • reports output all transactions for a collection of accounts
  • level of primary and secondary cost elements master data assignments
  • GL Account types
    • Balance sheets record assets and liabilities
    • non operating expenses and revenues
    • Primary cost elements
      • track costs and revenues directly related to cost elements
      • posting are one-sided debits
    • Secondary cost elements result from value flows within the enterprise
      • are used for internal cost allocations. From one cost object to another e.g. from cost center to production order
      • result in two-sided, balanced posting on account level. Cost sender get credited and receivers gets debited

• Sub-ledgers

  • are accounts for debitors and creditors. Get accumulated by General Ledger Accounts Receivable (Scope Item J59) and Accounts Payable (Scope Item J60)
  • debit and credit postings result in automatic postings on General Ledger accounts

• Reconciliation accounts

  • are higher level, summary accounts for sub-ledger accounts. Examples are accounts payable or receivable
  • get posted automatically, no manually posting is allowed

• Depreciation

  • decrease monetary value of assets over time
  • runs are posting to asset accounting and general ledger

S/4HANA Financial Accounting Basics

Financial accounting is intended for external legal reporting with balance sheets and income (profit and loss) statements.

Accounting Principles are:

• Double-entry book-keeping reflects balances e.g. between cash to buy product and value of receiving good
• Account Categories are asset, liability, owners’ equity, revenue or expense
• Parallel Accounting / Valuation
• using international accounting standards and local accounting principles in parallel with a ledger or accounting solution
• managing multiple general ledgers is the recommended S/4HANA approach
• Document Splitting
  • splits up line items for selected dimensions (such as receivable lines by profit center or segments)
  • enables drawing up complete financial statements for the selected dimensions 

Accounting Statements

• Financial Statements
  • each version contains a subset of a chart of accounts
  • can be used to balance sheet and income statements
• Income Statement (or profit and loss account)
  • quantifies
    • the amount of revenue generated and expenses incurred by an organization during a reporting period
    • as well as any resulting net profit or loss
  • balances will be moved to the retained earnings account
• Balance sheet
  • represents snapshots of companies at a specific point in time
  • net profit or net loss will be moved to the capital account (part of owner's equity) at the end of the year
  • assets are listed on the left side
    • sum of liabilities and owners’ equity
    • cash, accounts receivable, inventory
  • liabilities and equity are listed on the right side

Accounting Rules

Accounting Documents

Document structure with sample fields:

• Header
  • Document type
  • business transactions
  • controls posting to account types e.g. SA G/L account, KR vendor invoice
• Item
  • Posting Key define
    • account types (D - customer, K - vendor, S - G/L account, M, A - asset)
    • posting type, debit or credit e.g. asset debit (70) or credit (75)
    • field status defines line item fields

S/4HANA Asset Accounting

Assets are intended for long-term use and postings are performed on the assigned company code. Additionally, assets can be assigned to other accounting objects like business area, profit or cost center, segment. Each asset has to be assigned to an asset class, which determines the line item of the balance sheet.

• Depreciation areas
  • can control different valuations of assets in business processes e.g. for legal or internal purposes
  • used for account determination
  • control data useful life, depreciation key, index, start date
  • integration point of assets with Financial Accounting
  • Posting of assets has to be performed with posting keys and transaction types (e.g. acquisitions, retirements).

S/4HANA New Asset Accounting divides acquisition into multiple documents. Different accounting principles for operational and valuating parts get applied before posting against the technical clearing account for integrated asset acquisitions.

The asset explorer provides an overview about planned values, posted and planned depreciations.

S/4HANA Management Accounting

Tracks costs and revenues for internal reporting to enable decisions, controlling and optimization.

S/4HANA Management Accounting Structure

Organizational Units are:

• Operating Concern
  • as central client independent organizational unit for profitability analysis (CO-PA)
  • to track the performance of external market segments
  • with 1:n controlling areas assignments
• Controlling Area
  • are basic organizational units in management accounting
  • are used to allocate costs
  • 1:n relationship to company codes facilitates e.g. the movement of shared costs across company codes
  • share one common operating chart of account and fiscal year variant
  • can have different currency for cross-company-code accounting

Structuring Units

• Profitability Segment
  • is part of an operating concern formed by a number of characteristics
  • corresponds to market segment
• Profit Center
  • management-oriented structure of the organization for internal controlling and accounting based on costs and revenues
  • track profits within areas of responsibility of companies
  • offer direct posting or via assignment to cost centers, internal orders or WBS elements

S/4HANA Management Accounting Elements

• Material Ledger

  • is part of management accounting
  • enables valuation in different currencies and with different approaches
  • the company code level impacts the balance sheet for valuations
  • sub-ledgers can be introduced for more detailed material valuation
  • actual costs calculation of materials during goods movements is optional
  • is responsible for statistical price calculations

• Controlling Object

  • examples are cost center, order, cost object
  • are required by posting keys when posting a G/L account using an expense account

• Cost Object

  • orders, WBS elements, profitability segments, sales order items
  • after release
    • orders become cost objects for tracking costs
    • have to be confirmed with the exact number of produced goods

• Internal Order

  • provides capabilities for planning, monitoring and cost allocation types
  • overhead, investment, accrual, orders with revenue
  • debits are posted as actual costs (value type 04)
  • settlement allocates actual costs to receivers
  • statistical orders can be used for reporting

• Statistical Key Figures as tracing factor

  • use non monetary data like "number of persons used service" in planning or KPI

• Settlement

  • actual costs incurred are settled to one or more receiver
  • costs from orders (production, maintenance, internal) and project related (WBS elements, network, activities, project)
  • receivers are cost centers, orders, projects, assets, profitability segments, G/L accounts

• Account Assignment of Controlling Objects

  • for postings
    • in external accounting that use a cost element as the account
    • all internal accounting
  • statistical costs
    • cost objects do not carry actual costs
    • can't be settled
    • internal orders and projects can be indicated in master record as statistical
    • profit centers are always statistical
  • true cost object
    • system uses priority to determine true cost object
    • in each posting item there has to be one true controlling object specified
    • profitability segments, cost centers and business processes are always true

S/4HANA Cost Centers

• enterprise can assign cost centers to organizational levels to track where costs are occurring

• cost centers belong to responsible organizational areas, mostly profit centers

• company code, hierarchy and responsible person have to be assigned during creation.

• Cost Center Group

  • to track and allocate costs across related cost centers

• Activity Type

  • classify activities performed in cost centers within a controlling area
  • serve as tracing factor for cost allocations as debits for receivers
  • stastical key figures can handle cost allocations
  • paired with cost centers to determine the rate of the activity

• Internal Labor

  • costs have to be linked with cost center and activity types
  • planned rates can be calculated based on activity prices on corresponding cost centers

S/4HANA Order Processing

There are many similarities across order types used in different business processes like production, maintenance, service or internal orders. All orders are managed by order types, collect costs with a standard sequence:

• Order Creation comes with scheduling, assignment of materials as reservations and labor resources for cost planning
• Order Release enables posting on the order as cost object, availability checks can block the release
• Material Movements are posted as expenses on the order with cost elements. Movements get performed with goods issues from stock or goods receipts from purchase order
• Confirmations post costs of work centers to the order with secondary cost elements
• Settlement Rules
  • lead to orders without balance on credit or debit side
  • settle collected costs to receivers like general ledger accounts, cost centers, projects or other orders

S/4HANA Profitability Analysis

Profitability segments contain a combination of characteristic values. They represent market segments, for a business process to be posted.

There are two profitability analyses types:

• Margin Analysis
  • integrates with universal journal accounts
  • reconciliates with Financial Accounting
  • offers real-time insights with embedded analytics
  • is a strategic solution for all S/4HANA deployment options with
    • predictive accounting for sales order income
    • real-time characteristics attribution
    • FP&A harmonization (Universal Allocation)
• Costing-based is
  • built on values such as material costs, discounts, revenues
  • only available in S/4HANA on-premise

S/4HANA Profit Center Accounting

Profit centers

• determine profit for internal areas of responsibility
• are assigned to objects for which costs and revenues occur
• are always part of the characteristics of profitability segments