Ready for Innovation: S/4 HANA Finance - · PDF fileReady for Innovation: S/4 HANA Finance ... SAP Cash Management powered by SAP HANA New product for ... S/4 HANA Finance & Migration

Steven Ceuterick, SAP Belgium

June 2016

Ready for Innovation: S/4 HANA Finance

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Customer

Back to… December 2014 (1)

AnyDB

Client

SAP Business Suite

SAP ERP Finance Business Suite

on SAP HANA

SAP HANA DB

SAP Business Suite

BW

SAP HANA DB

ERP Business Suite

Simple Financials

…

Client

Simple Finance

BW

Ap

ps

EhP 7 EhP 7

Client

Any DB Based on InMemory Technology (e.g. HANA)

Finance Finance incl.

Accelerators

Apps EhP 7


Back to… December 2014 (2)

Business Suite on HANA

SAP HANA Platform

AlignedSingle Source of Truth

AgileReal time processes

PredictiveDynamic Planning and Analysis

SAP Cash Management powered by SAP HANA

New product for

Group Cash Management

SAP Accountingpowered by SAP HANA

Alternative in-memory

functionality for ERP customers

Integrated

Business Planning

New capabilities and enhanced

integration for ERP and BPC


S/4HANA Overview anno 2016 (1)


S/4 HANA Overview anno 2016 (2)

• SAP S/4HANA (as an umbrella term) -> unchanged

• SAP S/4HANA, on-premise edition -> SAP S/4HANA (yes, same as the umbrella term)

• SAP S/4HANA, on-premise edition 1511 -> unchanged

• SAP S/4HANA, on-premise edition 1610 -> SAP S/4HANA 1610

• SAP S/4HANA Finance, on-premise edition -> SAP S/4HANA Finance

• SAP S/4HANA,Finance, on-premise edition 1503 -> unchanged

• SAP S/4HANA Finance, on-premise edition 1605 -> SAP S/4HANA Finance 1605

• SAP S/4HANA, cloud edition -> SAP S/4HANA Cloud

• SAP S/4HANA, cloud enterprise edition -> SAP S/4HANA Enterprise Management Cloud

• SAP S/4HANA Professional Services, cloud edition -> SAP S/4HANA Professional Services Cloud

• SAP S/4HANA Marketing, cloud edition -> SAP S/4HANA Marketing Cloud


S/4 HANA Finance: simplified architecture at a glance

Stability

Logistics

Document

CO

Document

FI

Document

Totals & Indices

Financial Accounting

Totals & Indices

Management Account.

SAP ERP

Processing

Analytics

Universal

Journal

Entry

Flexibility

Aggregation on the fly

via HANA views

Pre-Defined Aggregates

Stability

Processing

AnalyticsSingle repository

across applications

Logistics

Document

SAP Accounting


Multiple Sources of Truth Challenges of the Architecture before S/4 HANA Finance

Asset

Accounting

Material

Ledger

G/L

Balance

Sheet/P&L

CO

Profitability

ML

code

AA

code G/L

code

CO

code

P&LBalance Sheet

CO-PA

code

Material Ledger does

not store G/L account

and Profit Center

No profit center &

no G/L account in

Asset Accounting Totals

Different level of detail due to

the ‘999’ document lines limit

1:n documents FI/CO

n:m document lines FI/CO

G/L and Profitability updated

at different business events

on different entities (e.g. account)


The New Architecture with S/4 HANA FinanceUniversal Journal as the Single Source of Truth (1/2)


The New Architecture

Motto: “Take the best of all worlds”

One line item table with full detail for all components!

Data stored only once: no reconciliation needed by architecture

Fast multi-dimensional Hana based reporting on the Universal

Journal possible without replicating data to BI

If BI is in place anyway, only one single BI extractor needed

Secondary cost elements are G/L accounts

Technical preparation done to enhance important structural

capabilities of the Financials solution

The New Architecture with S/4 HANA FinanceUniversal Journal as the Single Source of Truth (2/2)


A word on CO-PA in S/4 HANA (Finance)

Enhancements in Account-Based CO-PA

Split of cost-of-goods-sold posting on multiple accounts by cost component (standard COGS)

Split of production variance posting on multiple accounts

It is planned to further enhance account-based CO-PA

Uses the concept of “near real-time profitability analysis”

Within S/4 HANA Finance, account-based CO-PA is being considered as the strategic solution for the

future

Can be activated before/during/after migration to S/4 HANA Finance

Cost-Based CO-PA

Is still supported within S/4 HANA Finance

But is not part of the Universal Journal Entry!


S/4HANA: Inventory Management based on Material Ledger replaces

Traditional Inventory Management

SIMPL

E

Traditional SAP ERP Inventory

Managementwith Material Ledger

Data Throughput 1 > 5 x

# of Currencies/ Valuations 1 1 to 3

Valuation methods 2 + YE 3 + YE

Aggregate Tables 26 On the Fly

Transfer Prices No 2016

Reporting Batch on Multiple aggregates Real-time on primary data

Predict & Simulate stock No YES

Analytics Performance 1 up to 800 x


Material Valuation in S/4HANA

Actual Costing Optional revaluation of stock and COGS

Leverage Actual cost component split

Realtime Insights Analyze & Optimize the Flow

Use realtime KPI‘s (Inv. turnover)

Predict/ Simulate

Up to 3 currencies Tracking historic rates in material master

Local legal valuation & e.g. hard or trading currency

Transferprices* Legal Costing

Corporate Costing (w/o intercompany)

Transfer prices (political)

¥$€

Digital Core


Material Valuation MethodsS/4HANA Supports All ERP Valuation Methods…and MORE !

Standard Price (S-Price)

With Price Determination 2 – can be used as in ERP, price

is set manually or by Product Costing with Components

Variances will lead to Price differences (GL)

In S/4HANA the throughput for standard price materials

will be improved as shared SAP enqueue locks are used

instead of exclusive ones (parallel processing)

Moving Average Price (V-Price)

With Price Determination 2 – can be used as in ERP,

price is recalculated and updated (and locked) with

incoming movements

Often recurring variances bear the risk of continued

differences or (in exceptional cases of “many variances

into low stock scenarios” danger of wrong prices)

Not recommended for Semi Finished or Finished

Products - also difficult to use if strong variances for

raw materials are expected

Actual Costing

Optional enablement for selected valuation areas with price

determination 3

to enable inventory valuation at actual costs and improved

throughputs, customers can use Actual Costing (based on

Material Ledger) instead of using a moving average price

Allows for detailed material flow, revaluation and actual cost

components (all steps optional at any time)

Year End Legal Valuation

to enable local legal valuation requirements e.g. for

year end

Recalculate valuation based on all existing info at key

date

Lowest Value principle, LiFo, FiFo


Actual Costing Period End ClosingProcess steps for actual costing

Only for Plants with Actual Costing activated

It is a multi-step process. A Period end close has to be performed for

materials with actual costing (price determination 3). However most steps

are just optional – to be decided period by period.

New period needs to be opened

Material Selection selects the plants to be costed

Sequence determination calculates the actual usage and consumption

patterns of materials (prerequisite for correct variance assignment)

Single Level Settlement (calculates all variances per level separately,

such as for raw materials as level 0, Semi finished as level 1 etc.)

Multi-Level Settlement roles up the variances along the quantity

structure determined in step 2.

Post Closing with optional revaluation of old period. Before revaluation

the impact can be simulated.

Mark & Release new standard price for the new period based on actual

cost

After each step in the cockpit, the results can be seen in the “Costing

results section..


Historically, SAP had 2 solutions for credit management


Beginning with the simplified logistics processes in S/4HANA, FI-

AR credit checks done by base edition of SAP Credit Management*


S/4 HANA Finance 1605: more flexibility on currencies

In S/4H Finance OP 1605, Universal Journal supports additional new parallel

currencies

You can configure per company code and ledger 2 fix currencies and up to 8 freely defined

currencies

Customer can configured new currency types in customer namespace.

Freely defined currencies for parallel G/L ledgers do not depend on leading ledger


S/4 HANA Finance 1605: parallel valuation (profit center valuation /

group valuation) is now supported (1)


S/4 HANA Finance 1605: parallel valuation (profit center valuation /

group valuation) is now supported (2)

In classic SAP ERP:

Via extra currencies in Material Ledger

Via extra versions in CO

Via extra currencies in FI

In S/4 HANA Finance 1605: 2 options

Parallel valuations updated in a multi-valuation ledger

– Use separate amount columns in the same (leading) ledger

Parallel valuations updated in parallel single-valuation ledgers:

– Use of non-leading ledgers for parallel valuation


The road to SAP S/4HANA

The Road to SAP S/4HANA

• SAP Simple Finance is the first offering under the S/4HANA product family

• The decision to go for SAP Simple Finance should be based on the business benefits but is not a mandatory prerequisite for any

system conversion

Start Release

SAP ERP 6.0, EhP 0-7

SAP NetWeaver 7.0x

AnyDB or SAP HANA

SAP ERP 6.0 EHP8

SAP NetWeaver 7.40

SAP HANA

SAP S/4 HANA Finance, on-premise

edition 1605

SAP S/4HANA, on-premise edition 1511

SAP HANA

SAP S/4HANA Core(SAP S/4HANA Enterprise Mgmt.)

Tool: Software Update

Manager (SUM) with

Database Migration

Option (DMO)

See also SCN blog:

The road to SAP S/4HANA:

the different transition paths

http://scn.sap.com/docs/DOC-65072

http://scn.sap.com/docs/DOC-65072


Out of Scope & Limitations

From Classic General Ledger:

• Switch from parallel accounts into parallel Ledgers

• Special Ledger content into New General Ledger

• Document Split Implementation and Data Migration

From New General Ledger:

• Retro-active New G/L migration scenarios not yet ready for S/4 HANA Finance

From Classic General Ledger:

• Only one ledger (leading ledger)


S/4 HANA Finance & Migration to New G/L


Key Take Aways

Today’s volatile world requires Finance organizations to

become more adaptive to change

Superior access to insight, enabled by new

technology innovations, is therefore a competitive advantage

SAP S/4 HANA Finance helps Finance organizations to

become more adaptive by establishing a single source

of truth and real-time processes

SAP supports customers to flexibly choose their own

non-disruptive evolutionary path towards real time

Thank youContact information:

Steven Ceuterick

[email protected]

mailto:[email protected]

Documents

Ready for Innovation: S/4 HANA Finance - · PDF fileReady for Innovation: S/4 HANA Finance ... SAP Cash Management powered by SAP HANA New product for ... S/4 HANA Finance & Migration