SAP S/4 HANA for Financial Accounting

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  • March 2, 2023
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SAP S/4 HANA for Financial Accounting

SAP S/4 HANA for Financial Accounting

The finance application in the SAP S/4HANA ERP platform is called SAP S/4 HANA Finance. To deliver quick insights and real-time analysis using all types of financial data, it is intended to do away with the conventional barriers between transactional, analytics, and planning systems.

The solution comprises a group of connected accounting and financial management operations that process real-time data from the business applications in a S/4HANA ERP system. It can be used by a decision-maker, for instance, to estimate financial outcomes and model financial situations.

The first ERP component or module made available for S/4HANA was SAP S/4HANA Finance, formerly known as SAP Simple Finance. It is intended for financial professionals working in all sectors of the economy, such as CFOs and those working in risk management, compliance, accounting, taxes, and treasury. 

In anticipation of tighter packaging with the SAP Analytics Cloud, SAP is increasingly referring to S/4HANA Finance as the SAP S/4HANA Financial solution. In this piece, I’ll refer to it as sFin or Simple Finance for clarity’s sake.

Users of the ERP financial software Simple Finance can run real-time reporting on operational and financial data thanks to SAP HANA’s in-memory technology. Data is processed and stored in memory, just like with other HANA platform products, enabling speedy data analysis with few limitations. You could, for instance, use up-to-the-second precision to run a soft closure at any moment during the day, month, or quarter.



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SAP S/4HANA Finance: What is it?

A component of the SAP S/4HANA Business Suite is SAP S/4HANA Finance. SAP S4 HANA Financial 1909 is the most recent version.

SAP offers businesses a complete solution for all aspects of financial management, including accounting, risk and compliance management, financial planning and analysis, and receivables management, through the use of ERP financial software.

Both on-premises and cloud versions of SAP S/4HANA Financial are offered. Companies are given a unified picture of all financial and operational data through the solution. It guarantees optimized business procedures and permits in-the-moment analysis.


Which Are The Simplifications Of SAP S/4 HANA Finance?

The term “single source of truth” is what SAP refers to as the “Simple” in Simple Finance. There is no need for data replications, data reconciliation, or data removal because all data, including operational and financial data, is available from a single source. Using real-time data, Simple Finance generates reports for trial balance sheets, profit and loss statements, and cash flow analyses utilizing the HANA in-memory platform. You may instantly access your data for planning and decision-making without having to wait until the end of the day, the month, or the quarter. Looking to enhance your skills in SAP HANA? Look no further than our SAP HANA Classes in Pune! Our classes provide you with a comprehensive understanding of the SAP HANA platform, including in-memory computing, data modeling, and analytics

The difference between ECC and HANA with in-memory DB is simplified by SAP getting rid of all the index and aggregate tables.


SAP S/4HANA Finance’s yore

The solution, which was first known as SAP Easy Finance, was introduced at the 2014 SAPPHIRE NOW technology conference in Orlando, Florida. When SAP launched its new SAP S/4HANA enterprise resource planning platform, divided into areas of business like finance, supply chain, sales, and more, it would alter its name to SAP S/4HANA Finance nine months later. The Universal Journal, a feature of the initial release of SAP S/4HANA Finance, offered a single location to store both financial and management accounting records with the necessary information. This resulted in improved reporting, simpler manager access to KPIs, and cockpits customized for particular end users to aid in decision-making.


S/4HANA Financial Framework

The in-memory database platform SAP HANA serves as the foundation for S/4HANA, which includes SAP S/4 HANA Finance. As opposed to traditional databases, which are commonly used as the data repository for an ERP system, in-memory databases enable faster queries and can analyze more data quickly by storing it in the computer’s main memory rather than on discs. S/4HANA integrates cross-organizational tasks like accounting and procurement into one system that combines records of business transactions with analytics, with HANA as its core technology.

The vendor’s user experience platform, SAP Fiori, serves as the foundation for SAP S/4HANA Finance’s front end. Across a variety of desktop and mobile platforms, Fiori’s design is straightforward, consumer-style, and built on tiles.

The S/4HANA Financial architecture’s most distinctive feature is likely the Universal Journal. All of the financial data is effectively kept in a single data table in an S4/HANA system. Several general ledgers with a set number of immutable fields typically exist in older ERP systems. Contrarily, The Universal Journal centralizes ledger data into a single chart of accounts, which, according to SAP, aids in the integration of various ERP systems. The fields are editable, and the number of records is unlimited. 


Alternatives for Deploying SAP S/4HANA Financial

Below is a quick summary of each.


Traditional internal IT infrastructure  up  models are included in an on-premise deployment. This deployment model represents a SAP S/4HANA Financial instance that is physically hosted on business grounds.

Cloud There are two cloud deployment methods for SAP S/4HANA Finance, each of which uses an external cloud integration. An organization renting a segregated portion of server space shared with other clients running SAP S/4HANA in a public cloud deployment. A business rents a special server to run SAP S/4HANA in a private cloud deployment. Although the customer owns the application in both scenarios, complete technical infrastructure management


Financial Advantages of SAP S/4HANA

Published on January 8, 2021 at 2:00 PM by SAP PRESS

For organizations to employ in their financial processes, SAP S/4HANA Finance is a potent option. This article will examine 24 advantages it offers for increasing corporate growth, profitability, and agility.



These are eight advantages SAP S/4HANA Finance offers for business expansion.


Lead time for clients

SAP S/4HANA Finance offers quicker loan valuations, accruals posting, and payment runs when it comes to customer lead times. Also, a shorter engagement time with clients enhances customer relations. And finally, SAP S/4HANA Finance offers a scalable platform for huge data (e.g., processing 50 million daily orders). Data Volume SAP S/4HANA allows for a high-volume billing procedure to satisfy peak season and promotional requirements.


Outstanding Days Sales

Companies can experience a decrease in days sales outstanding thanks to SAP S/4HANA Finance (DSO).


Process Time for Invoices

The architecture of SAP S/4HANA allows for a significant reduction in processing time for invoices.


Added Income

Companies may shorten the time it takes to provide new goods and services to the market because of SAP S/4HANA’s speed and usability.


Increase in Sales

A rolling forecast that results in production matching sales demand is simpler to generate because SAP S/4HANA links processes straight from the sales plan through subcontracting execution through material requirements planning.


With regards to SAP S/4HANA for Financial Accounting Associates (SAP S/4HANA 1909)

The “SAP Certified Application Associate – SAP S/4HANA for Financial Accounting Associates (SAP S/4HANA 1909)” certification exam confirms that the applicant has a solid understanding of and experience with SAP S/4HANA Financial Accounting. It evaluates whether a candidate has a thorough grasp of the consultant profile as a whole and the ability to use that understanding practically in projects under the supervision of a more seasoned consultant. For consultants looking to get experience working on financial accounting projects, the C TS4FI 1909 certification is advised as an entry-level certificate.

A career as a Financial Accounting consultant on SAP S/4HANA can be started off on the right foot with this credential. A person with years of experience in SAP Financial Accounting implementation projects could become


S/4HANA The three pillars of finance are:

Master and transaction data can be analyzed across applications in SAP Accounting. The account presents the primary, and hence most significant, aspect via the programmes “Finance,” “Controlling,” “Asset Accounting,” and “Materials Management.”

SAP Cash Management: Using planned or accounted-for finance data, liquidity analyses can be assessed in reference to applicable cut-off dates.

Integrated planning: The Business Planning and Consolidation (BPC) components enable the direct registration and processing of planned and forecast values in the SAP ERP.


An outline of the significant distinctions

The SAP S/4HANA Finance solution has its roots in SAP Simple Finance. In the end of 2015, SAP Simple Finance was replaced.

The current ERP financial software from SAP is called SAP S/4HANA Finance, which is a component of S/4HANA. The SAP HANA in-memory database powers the ERP solution.

Platform based on SAP S/4HANA is SAP Central Finance. It makes centralized financial systems possible. For a subsequent full SAP S/4HANA implementation, this solution might be used as a starting point.


SAP S/4HANA Finance vs. SAP FICO Comparison

The primary difference is that SAP FICO, which manages all financial and costing components of an organization, falls under the functional module, while SAP S/4HANA is a reporting tool.

We can manage all accounting-related tasks with the aid of SAP FICO, which is integrated with a number of modules, including MM, PP, and SD.

The crucial SAP FICO module of the ERP stores the financial transaction data along with the FI and CO modules. While the S/4HANA suite’s component devoted to Financial Management solutions, SAP S/4HANA Finance, is called such. It facilitates the consolidation of various back end data sources into a Universal Journal for financial and controlling data, which is used by Central Finance.

Executing the S/4HANA Financial system would allow for a quick replacement of all current safe transactions and other operations.



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Innovations in SAP S/4HANA Finance

The process and reporting advantages made possible by SAP HANA are at the heart of the SAP S/4HANA Finance solution’s unique selling proposition. The SAP HANA database offers analytics and reporting capabilities that are 1800x quicker than SAP ERP, although many of these were entirely new to SAP S/4HANA Finance. Others of these were merely processing performance increases. For data collecting, this entails features like the Universal Journal, centralized processing, data drill down, and the capacity to link various ERPs into a single system.

By completing our SAP HANA Training in Pune, you’ll gain the skills and knowledge needed to excel in the fast-growing field of SAP HANA. Plus, our training program is designed to help you prepare for SAP HANA certification exams, giving you a competitive edge in the job market.


SAP ERP Financials changes

The “simple” in the initial version of SAP S/4HANA Finance was complex, as was made abundantly clear by SAP from the start. In addition to automatic, real-time financial reporting, the new solution offers a simplified data model and a lightweight architecture.

The original FI-CO capabilities enhanced the pre-existing ERP. This includes the management of enterprise risk and compliance, updated financial planning and analysis, accounting and financial close, treasury and financial risk management, collaborative finance operations, and these.


New Features for SAP S/4HANA

The tangible concept of a single source of truth—i.e., an aggregated sum of all financial data across departments, ledgers, and even continents—was first presented to the financial industry by SAP S/4HANA Finance. This was made possible by SAP HANA’s capacity to instantly provide analytics reports for anybody with access and store vast amounts of data in-memory. Accountants examining recent and historical activity, project managers overseeing challenging initiatives on a limited budget, and planners attempting to estimate future expectations using recent and historical data all found immediate benefit in this.


Migration Options for SAP S/4HANA Finance

One of the following three migration options will be the most sensible depending on the particular business needs of a company. They can be done in-house or with the assistance of outside specialists.

  • Greenfield

The SAP S/4HANA system is created from scratch and has no data at the beginning of a greenfield setup. All newly acquired SAP clients carry out this implementation. If they have a legacy, overly customized SAP ERP Financials system, some current SAP clients can decide to do a greenfield implementation.

  • Brownfield

A brownfield implementation involves transforming an existing SAP ERP Financials system into a SAP S/4HANA Finance system. Financial data must be transferred from the legacy system to SAP S/4HANA in order to accomplish this. Businesses that did not significantly customise their legacy system might prefer this strategy to starting from scratch.

  • Regional Finance

A Central Finance implementation connects various SAP ERP financial systems to a single Central Finance system. This simulates the single source of truth offered by SAP S/4HANA Finance and enables the use of data for reporting and analytics features.


Cycle for Releases of SAP S/4HANA Financial

Each year, there are numerous upgrades for SAP S/4HANA Finance. On-premise deployments only receive a single upgrade, often in September, compared to quarterly updates for instances deployed to the cloud.

Release names for SAP S/4HANA use the following four-digit format: year/month. The SAP S/4HANA 1909 release, for instance, refers to the version that was released in September of the year 2019 (19). (09).


Legal consolidation in financial accounting

A subset of the larger Financial Accounting (FI) module enabled by SAP R/3, which was formally introduced in 1992, was the company’s first consolidation tool. Although it lacked an integrated web interface or business process capabilities, it allowed businesses to unify their financial statements through the use of transaction codes. It needed to be configured and used with a thorough understanding of SAP R/3, and it was maintained by the IT department. Financial Accounting – Legal Consolidation (FI-LC) had the following main components:

By combining trial balances from many companies, visibility into the underlying financial transactions was made possible.

The shared data platform was the primary requirement for all of the group’s firms; in the absence of this, extensive integration and It was necessary to map all accounts to one chart of accounts.


Consolidation system for enterprise control

The Enterprise Controlling – Consolidation System (EC-CS) was launched as part of SAP ERP 6.0 when the company completely changed its architecture from SAP R/3 to SAP ERP 6.0. Once it is available, there will be two typical ways to consolidate financials: either through the use of EC-CS or through the use of a customized reporting solution on SAP Business Warehouse (SAP BW).

Several entities (i.e., company codes) could be consolidated by businesses using EC-CS right inside the ledger. Similar functionality to those found in current consolidation tools are present in EC-CS, although this tool was built using SAP BW technology rather than SAP S/4HANA’s in-memory computing system. The tool’s usability for business users was also lacking. Instead, one needed to have a strong understanding of EC-CS to configure and carry out a consolidation.


Additional essential SAP S/4HANA finance terms

You should be familiar with a few key SAP S/4HANA Financial terminologies in addition to the knowledge provided above. Listed below are each of them:

Actual costing is a method of valuing the materials used in the manufacture of a product based on several scenarios. The cost of products sold can be calculated more precisely than with conventional accounting methods thanks to actual costing with SAP S/4HANA.

Blockchain: An accounting transparency-enhancing distributed ledger and decentralized database replicated throughout a peer-to-peer network.

A subledger that provides a thorough look at inventory transactions is called the material ledger.

With the integration of SAP S/4HANA, users may access and analyze data using SAP Analytics Cloud, a cloud-based planning, analytics, and predictive solution.

Employees can utilize SAP Concur, a travel and expenditure management tool, to get reimbursed for expenses incurred for work-related activities.

The current entity close solution from SAP is called the SAP Financial Closing Cockpit, and it is used to streamline reporting.

A single source of financial and other pertinent data that can provide immediate insight into a company’s finances is called a universal journal.


Consolidation in Real-Time in SAP S/4HANA

Real-Time Consolidation (RTC) was unveiled in 2016 as a component of the 1610 SAP S/4HANA version. The SAP HANA tool set lacked a fully integrated planning and consolidation capability until the release of SAP S/4HANA. As a result of enabling direct access to the Universal Journal and providing connection between SAP S/4HANA and SAP BPC, RTC was designed to be the next-generation consolidation tool.


SAP Financial Accounting (FI) in Detail

The SAP FI module manages financial transactions for businesses, as the name would imply. Employees may handle data from all financial and business transactions in one place with the help of this module for financial accounting. For reporting needs, this module performs remarkably well. The SAP FI module can adapt to any type of economic condition and performs admirably in it. SAP deployment aids in consolidating data for various business transactions and legal obligations, whether the organization is small or large. One can obtain the current financial standing of a firm on the market with the aid of the financial accounting module. To improve work outcomes, SAP FI integrates with other SAP modules including SAP SD, SAP MM, SAP PP, Payroll, and more.



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SAP Financials and Accounting Module’s constituent parts

SAP General Ledger: The main goal of SAP general ledger accounting is to give organizations a way to manage all of their external accounts. This SAP accounting module is responsible for managing numerous other operational areas as well as the recording of all commercial transactions of an enterprise. Real-time evaluation of cost accounting topics is provided.

SAP Accounts Payable and Receivable: Whereas SAP Accounts Payable records every element and piece of information for vendors, SAP Account Receivable records every element and piece of information for clients. These modules can be used to construct balance sheets and account statements. All transactions involving bank accounting are handled by the SAP Bank Accounting module. From processing incoming and outgoing payments to handling cash balances and bank master data, this module becomes useful.

The SAP Asset Accounting module is made to help firms manage their fixed assets. Along with providing comprehensive information and reporting data, the SAP financial system makes it possible to manage and oversee fixed assets.

SAP Funds Management: This SAP accounting module aids in all activities involved in developing and overseeing budgets. The SAP funds management task lists include calculating revenues, expenses, and money.

SAP Travel Management: This SAP module tracks every transaction associated with business travel planned and coordinated by the firm. The SAP travel management module is used to record and handle approvals, bookings, settlement, and various travel expenses.

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