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S/4HANA Finance: 1610 New

Functions and Innovations

(S4F00, S4F01, S4F02, S4F03,

Enterprise Management 1610
24 February 2017
IBM Proprietary | © 2017 IBM Corporation 1
Your Presenters

Devraj Bardhan
Senior Enterprise Architect SAP S/4HANA
Global Business Services
@devbard (Twitter)

Taro Kokott
SAP Finance Consultant
Global Business Services

Bhartendu Agarwal
Senior SAP FICO Consultant
Global Business Services

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2017 IBM
IBM Corporation
Corporation 2
Finance: Business Pain

Reports of yesterdays’ truth Complex processes and

created by batch runs and UI’s for Financial Operations
reconciliation required since info and Closing activities—time
is spread over multiple tables, consuming, and requires
with different details, structures, Consolidation system experts
and capabilities Stakeholder

Legal State of the art
Finance? Planning

Margin Performance

Planning takes too much

time when non-integrated Analytics are only for Senior
worksheets are used or done level, when preordered, then
by experts on a line item level outdated, inflexible, and no
with no flexible simulation in drilldown available

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SAP S/4HANA Core Finance
SAP S/4HANA Enterprise Management Scope for 1610 Shipment
E2E Business Process:


Solution Capabilities:
Use one single source of Accelerate company close Reduce risk and cost of real- Gain a deep understanding Calculate Cost of Goods Understand in detail the
truth for instant insight into through automation and time financial reporting of the drivers of by achieving Manufactured (COGM) or costs and margins
profitability and all ledgers standardization. Templates and multidimensional data a holistic view for cost Cost of Goods Sold (COGS) incurred by your products
and sub-ledgers, such as: can be used across multiple analysis for accounting management. Get complete, as broken down by each in order to successfully
 Asset Accounting entities to improve standards with SAP accurate, real-time step of the production, manage your product
 Inventory Accounting governance, share best solutions. Drill down into information to increase project, or service process portfolio. With immediate,
 Accounts Payable practices. Support quick and financial statements and operational efficiency and by integrating to other SAP role-based insight into
 Accounts Receivable efficient peer-to-peer source applications, such as overall profitability. Minimize applications. So the current margin and flexibility
 Revenue and Cost reconciliation of materials management or disruption to core processing approach to Product Cost for ad hoc reporting and
Accounting intercompany balances and sales and distribution. with role-based access to Management can be analysis, your business
invoices between group massive amounts of financial approached with high users have the support they
subsidiaries. data and related flexible flexibility per industry. need to optimize decisions.
financial objects.
Innovation & Highlights:
Use new Cockpits for AR & AP with charts, notes, Use people centric posting cockpits for quick Monitor your production cost in a powerful
and access to all docs overviews and fast item processing and intuitive UI

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SAP S/4HANA Finance: Solution Simplification
Built to Scale
 Data Model Changes in Finance include Compatibility views (SAP Notes 1976487, 2270333, 2270339)
 Technical Changes in Controlling (SAP Note 2185026)
 Replaced Programs & Transactions (SAP Note: 2270335)
 Data Model Changes in Asset Accounting (SAP Note: 2270388)
 S/4HANA Finance Credit Management replaces ERP SD Credit Management (SAP Note 2270544)
 New Cash Management replaces Cash and Liquidity Management, which is officially no longer supported (SAP Note 2270400)
 Functions no longer available: Activity Based Costing, General Cost Objects, GR/IR Cockpit, Joint Venture Accounting, and Reference & Sim.
 Material Ledger, Actual Costing and Transfer Price changes (SAP Notes 2354768, 2270414)
 Planning: Target architecture for OM, PCA, and Planning is SAP BPC for Finance (SAP Note 2081400). To continue using classic planning
functions see SAP Notes: FI-GL Planning 2253067, Cost Center Planning by Cost Element 2142447, Order Planning by Cost Element 2148356,
Project Planning by Cost Element 2135362, and Project Planning Overall 2142732.

Actuals Predefined Data sets & Out- Real-time insights into Legal Reporting / Profitability Analysis
Universal Journal ACDOCA of-the box Analytics Subledgers Hard & Soft Close by Market Segment
Planning ACDOCP

 Planning, Budgeting, Forecasting entirely

 One line item table with full detail for all applications, for
integrated, with flexible and direct access to all
instant, insight and easy extensibility (GL, AA, PA, CO,
data (actuals, master data) to perform flexible
planning and simulations.
 Data stored only once: No more reconciliation needed by
 Reduction of footprint
 Fast multi-dimensional reporting without replicating data to
Consolidation ACDOCC
Business Warehouse (BW)
 If a BW is used, only one single extractor needed
 Secondary cost elements are now G/L accounts
 Account-based COPA synced with GL, costing based  Legal and statutory consolidation with direct
COPA in maintenance mode, can still be used in parallel access to all data to perform real-time
consolidation with
facilitated process steps
(data acquisition, validation, and intercompany).

Actuals IBM Proprietary | © 2017 IBM Corporation 5

* Complete list of Simplifications see here..
Universal Journal
SAP S/4HANA Finance: Universal Journal

General Ledger
All Value flows in one single
Ledger Company Account
… source
 Multi-dimensional GL
 Parallel Ledger
Operating Market

Concern Segment
 Custom defined fields
Management Accounting Universal Journal  Extension Ledger
Controlling Cost Amount Amount Coding
Area Element 1 2 Block
…  999.999 line items

Asset Accounting
 Unified, extensible currencies

Fixed  Consistent parallel valuation

Company …
(Transfer Prices)
Material Ledger  Soft Close and Prediction
Company Material …

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What’s new with SAP S/4HANA 1610? Overview
1605 = Introduced in SAP S/4HANA Finance 1605 already
Major innovations compared to SAP S/4HANA 1511

Area New Capability Value

User Experience Fiori 2.0 Increased productivity

Universal Journal 1605 Multiple functional enhancements Rich multidimensional, high-performance GL for comprehensive reporting
1605 Unified Currencies and Transfer Pricing Facilitated setup and maintenance for increased transparency
Subsequent introduction of parallel ledgers Enhanced flexibility in adoption
Profitability Analysis 1605 Visibility of Details and Variances in Universal Journal Soft Close / Continuous Accounting on Entity Level: FI and CO Close match by
Revenue Recognition reflected in Universal Journal for project-based design
services and real-time derivation of characteristics Costs and revenues always match, Profitability reporting always up to date
Receivables KPI Cockpit for Managers (FI-CA) Increased working efficiency
Management Silent Factoring (FI-CA) Improved performance, transparency, and auditability
Payables Management Integration to Business Networks Increased automation, reduced error-handling efforts

Cash Management 1605 One Exposure Consistent Cash reporting

1605 Details for Cash Position and Liquidity Forecast Consistent banks and bank account data are between central and target system
Centralized Bank Account Management
Planning 1605
Cost Simulation Optimized performance Management
Enhanced Content for Sales and Profitability Planning
Consolidation Embedded real-time Consolidation Support for Continuous Accounting on Group Level

Reporting Production Cost Analysis Improved variance tracking and transparency to identify potential issues
Embedded Tax Compliance Apps Ensure compliance
Statutory Reporting Framework Streamline and bundle reporting obligations
Central Finance Replication of Changes, Mass Enablement, and Reconciliation Strengthen central steering capabilities on a secured basis

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Subsequent Activation of New GL Functionalities

Classic GL in SAP Migrate to New GL Universal Journal

ERP Parallel Ledgers Document Split Parallel Ledgers Document Split

Classic GL in SAP
Universal Journal Introduction
Parallel Ledgers* Document Split**

SAP S/4HANA 1511 1610

* SAP S/4HANA Finance 1503 1605 planned for SP5

** planned for 1709

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Multi-currency in the Universal Journal
Up to 10 Parallel Currencies per Ledger

SAP ERP FI (BSEG) local Crcy 2nd local Crcy 3rd local Crcy
 Three local currencies in FI (including NewGL)
CO (COEP) local (Obj) Crcy CO Area Crcy
 Two currencies in CO
 Three currencies in Material Ledger ML local Crcy 2nd ML Crcy 3rd ML Crcy

Universal Journal Local Global 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
(ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy
SAP S/4HANA Finance
 Local currency: ACDOCA field name = HSL, currency type 10 ledger-dependent
 Global currency: ACDOCA field name = KSL, currency type of controlling area
 Freely Defined Currencies 1–8
– You can configure any currency type.
– There is no dependency on the currency types of the leading ledger.
– ACDOCA fieldnames OSL, VSL, BSL, CSL, DSL, ESL, FSL, and GSL.
 If you activate parallel valuations with transfer prices, then additional rules/constraints apply.

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LoB Finance
Parallel Valuation: Transfer Pricing: Legal, Group, and Profit-Center Valuation
Multi-national groups need to report profitability for the group in total and for the individual units based on the operational flows. Up to three parallel
valuation methods for legal, group and profit center valuation provide different perspectives on the value chain within a group.

Legal perspective looks at the transactions from the point of view of the affiliated companies
including markups

Group valuation looks at the whole group eliminating markups (that is, intercompany profits)

Profit center valuation treats profit centers as if they were independent companies, using
negotiated prices

SAP ERP had three perspectives, but the solution had significant short-comings.

Heterogeneous approaches across applications, high complexity, difficult to understand

No clear separation of management valuations, insufficient currency flexibility

SAP S/4HANA Finance, OP 1605 now delivers these capabilities, but with a much more streamlined, consistent approach in the universal journal.
In earlier releases of SAP S/4HANA and SAP S/4HANA Finance only legal valuation was supported.

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SAP S/4 HANA 1610
Enhancements of Profitability Analysis

SAP Accounting focuses on the enhancement and integration of account-based CO-PA

Account-Based CO-PA

 Significant enhancements delivered – closing critical gaps of the past and providing new real-time insight
 Split of cost-of-goods-sold posting on multiple accounts (by cost component)
 Split of production variances posting on multiple accounts (differentiation of price/quantity effects)
 Three new quantity fields in the line items and BAdI for conversion of logistic quantities to common quantities
(for example, products sold in different box sizes—but KPI in Finance is calculated on tons/KG of products)
 Real-time derivation of market segment information from cost postings (cost center, order, and WBS element)

Costing-Based CO-PA

 Product continues to exist and be supported, but no enhancements with SAP Accounting
 Customers can run account-based and costing-based CO-PA in parallel
 Existing customers should assess if account-based CO-PA can cover their needs
 If yes, consider switching to account-based CO-PA. If no, continue using costing-based CO-PA.

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SAP S/4 HANA 1610
Added Value of Profitability Analysis in Universal Journal compares to Cost-Based COPA
Profitability analysis in the
Functionality Example Costing-based CO-PA
Universal Journal
Reconciliation of legal and management accounting and
profitability, for example by profit center
 Available x Not in scope

Distinguish variances in costs of producing materials by price,

Production variance split
quantity, or scrap variances
 Available  Available

Distribute high-level costs to the relevant market segments to allow

Top-down distribution
profitability analysis
 Available  Available

Drilldown by characteristics from Drilldown by product and customer-related characteristics in COGS

income statement and revenues within income statement  Available x Not available

Profitability characteristics on For unbilled revenues or WIP, customer wants to see the project,
balance sheet items* region, customer category  Available x Not available

Breakdown of COGS into fixed and variable, as well as different  Not yet fully available  Available
Cost component split/COGS split kind of costs, such as material, administration, and overhead costs.

Sales conditions can be used to calculate contribution margin level, x Not available  Available
Sales conditions such as sales commissions, calculated freight or discounts, which
are not posted in G/L
After changes of profitability characteristics such as division, it is  Available  Available
Realignment* possible to derive for historic data new values in CO-PA

Creation of a sales order item generates expected revenue and x Not yet available  Available
Order entry COGS entry in profitability

Calculatory costs not reflected in G/L—additional costs or different  Partial  Available

General costing approaches valuation
Special case: periodic revaluation Such as cost component split

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SAP S/4 HANA 1610
Attributed Profitability Segment, next to Real Account Assignment

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SAP S/4HANA 1610
Innovations in Asset Accounting

Flexibility concerning “Leading Valuation”

 No more hard coupling of depreciation area 01

Only one Depreciation Area per Valuation necessary

 No further depreciation areas (delta areas) necessary to portray a parallel valuation

No restrictions to set up different account determinations in different valuations

Real-time postings per accounting principle/valuation

 Common understanding of posted document
 Posting to different periods possible (Restriction: Beginning/end of FY needs to be equal)

New transactions for accounting principle (depreciation area) specific documents

Always separate documents per accounting principle (FI-AA)

 Post the values correctly right from the beginning, using multiple parallel documents
 Parallel valuation of acquisition values immediately with the activation of an Asset under Construction

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SAP S/4HANA 1610
Innovations in Asset Accounting (cont.)

Single Source of Truth

 Reporting is based on line items—removal and virtualization of totals
 All non-statistical line items in asset accounting are stored as universal journal entries
 No more reconciliation effort with G/L and within asset accounting itself

Instant Insight
 Depreciation posting in B/S and P&L by single asset
 Reporting on any CO object by single asset (for example, depreciation on cost center by asset)

Accelerated Financial Close

 Significant speed-up of asset depreciation run (amounts to be posted are calculated real-time and no more as part of the
depreciation run itself)
 Periodic posting runs are fully obsolete due to real-time update of assets (even for special items [―Sonderposten‖])

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SAP S/4HANA Cash Management
Enhanced Functionality

Cash Position Details

• Multiple day view in one page
• More dimensions (planning level, G/L account,
summarization term, and planning group)
• Allow end user to personalize the layout for
• Simplify the backend for better performance

Bank Account Management

• Improved usability for countries only using IBAN
• Configuration to split mass change signatory
request per country/per account type
• Easier configuration of field status group

Liquidity Management
• Pre-configured app ―Liquidity Forecast Detail‖

One Exposure
• Integration to MM and SD

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LoB Finance
Central Finance: Landscape Transformation

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SAP S/4HANA 1610
Central Finance innovations

Mapping Maintenance (mass uploads) (new with 1610)

Reconciliation Reports (new with 1610, down ported via note)

Improvements in Error Handling (AIF) (new with 1610)

Replication of clearings (available with restrictions - since 1511, FPS02)

Replication of document changes (available in lower releases through note)

Replication of changes to cost objects (available since 1605)

Tools supporting the initial load (available since 1605)

Support of mismatching currency decimals definition (available since 1605)

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SAP S/4HANA 1610
Open Item management options in Central Finance
Open items are replicated into Central Finance. To avoid duplication of effort to pay / clear, here are the following
Local Central Finance
Replicate open item and automatically/technically clear in Not suitable for central reporting or central processing
SLT Central Finance: (since clearing status not correct)
Open item Open item
• Available as of 1503
Tech • Continued open item management in source system

Centralization of finance operations reporting and central

Local Central Finance
Replicate open item and clearing status in Central process orchestration
SLT Finance:
• A/R and A/P reporting (cross-system view of customer
Open item Open item
• Available as of 1605 – for restrictions and further or vendor account)
SLT information, please see note 2292043
• Central dispute management, collections worklist, and
Clearing Clearing
• Continued open item management in source system credit evaluation scenarios
• Shared services and invoice management scenarios

Local Central Finance Replicate open item and automatically/technically clear in Similar to existing ALE scenarios, these are customer-
local system: specific scenarios where consistency in certain local
Open item
Open item • Centralized open item management in Central logistics processes must be determined in a case-by-case
Finance system analysis.
Tech • No Central Finance-specific technique for posting
Clearing Pilot available starting 1605 – see note 2346233 for restrictions
Cleared back to the source systems (project solutions can be
based on existing scenarios) *ALE, RFC, other

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SAP S/4HANA 1610
Country Versions: Released for 63 countries

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* Preliminary 1610 Roadmap Preview: For
most current list see Fiori Apps Library
SAP S/4HANA Finance: Fiori Apps I*
ACCOUNTING & CLOSING Accounts Receivable Accountant
OPERATIONS  Analytical
 Display Customer Summary - China NEW
Accounts Payables Accountant  Factsheet
 Analytical  Customer Accounting Document UPDATE
 Display Supplier Summary - China NEW  Transactional
 Factsheet  Clear Incoming Payments UPDATE
 Vendor Accounting Document UPDATE  Create Correspondence UPDATE
 Transactional  Display Customer Balances UPDATE
 Clear Outgoing Payments UPDATE  Intercompany Balance Reconciliation NEW
 Create Single Payment UPDATE
 Display Supplier Balances UPDATE
 Manage Automatic Payments UPDATE
 Manage Checkbooks UPDATE
 Manage Outgoing Checks UPDATE
 Manage Payment Blocks UPDATE
 Manage Payment Media NEW
 Manage Supplier Down Payment Requests NEW
 Manage Supplier Line Items UPDATE
 Post Outgoing Payments UPDATE
 Revise Payment Proposals UPDATE
 Schedule Accounts Payables Accounting Jobs NEW
 Schedule Payment Proposals

Accounts Payable Manager

 Analytical
 Aging Analysis UPDATE
 Cash Discount Forecast UPDATE
 Cash Discount Utilization UPDATE
 Days Payable Outstanding UPDATE
 Future Payables UPDATE
 Invoice Processing Times Analysis UPDATE
 Overdue Payables UPDATE
 Supplier Payment Analysis(Manual and Automatic Payments) UPDATE

 Supplier Payment Analysis(Open Payments) UPDATE

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SAP S/4 Finance Success Story
Neste, Finland

• Neste is the biggest company in Finland engaged in Oil refining and retail business with over 15 billions euros in revenue.

• S/4 Finance was selected by Neste to replace its aging multiple systems.
• S/4 Finance Modules implemented successfully
• Pilot phase went live on 01st November 2016, further 4 roll outs planned
• 1511 Version implemented with IS-Oil
• One of the first S/4 implementations in Europe
• Greenfield implementation with 15 users for Pilot
• Implementation of logistics modules to 4 Multiple day view in one page

• Testing, testing, it is never enough! Plan out the detailed testing plan and execute properly
• Fiori apps : It takes time, choose apps carefully and provide enough time to implement and test
• Do not just migrate existing services and processes – optimize them
• Don’t compromise on training, ensure project teams are trained on S/4 finance and are well aware of the functionalities available

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Enterprise Management 1610

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2017 IBM
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Learning Hub Courses on Finance

Read the Learning Hub blogs at: on how Some of the Finance Course Names
to Search, Find, and Complete Learning Hub Courses For S/4HANA S4F00 - Overview of SAP S/4HANA Finance
Finance Courses – Search for ―S4F*‖
S4F01 - Financial Accounting in SAP S/4HANA.
Or ―1610 Finance‖ to list all Early Knowledge Transfer courses (EKT)
S4F02 - Management Accounting in SAP
S4F03 - Finance Migration to SAP S/4HANA

S/4HANA Finance Courses start with S4F* (ebook or e-learning)

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SAP S/4HANA Finance Courses through Learning Hub

Find your learning Journey either on LH or on

S4F10, S4F12, S4F13, S4F15, and S4F17 will form the new Finance Academy and
will be followed by a new Finance Application consultant certification for consultants
new to SAP FI domain.
S4F10 is the best course to get familiar with Financial Accounting functions in
(not the customizing, business processes). The "old world" equivalent is AC010
which is now obsolete.
S4F10 Business Processes in Financial Accounting in SAP S/4HANA
S4F12 Basics of Customizing for Financial Accounting: GL, AP, AR in SAP
S4F13 Additional Financial Accounting Configuration in SAP S/4HANA
S4F15 Financial Closing in SAP S/4HANA
S4F17 Asset Accounting in SAP S/4HANA
S4F20 Business Processes in Management Accounting in SAP S/4HANA
S4F22 Cost Center and Internal Order Accounting in SAP S/4HANA
S4F40 Cash Management in SAP S/4HANA
SAP has also released the Finance Academy courses on the LH
TS4F01 SAP S/4HANA Financial Accounting - Part 1
TS4F01 SAP S/4HANA Financial Accounting - Part 2
TS4F02 SAP S/4HANA Financial Accounting II
 to continue using the sandbox early trial for longer than one week.
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SAP S/4HANA 1610 Next Courses

Future Sessions Future Technical Sessions

S/4HANA Embedded Anayltics (Pre-Read S4H400, S4H410)

S/4HANA Fiori Deep Dive (Changes, customizations)
SAP Leonardo IOT

Playback and Presentations of previous sessions:

* does not reflect licensing

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Where to go for more information

S/4HANA Overview S/4HANA Business Scope Best Practice Scope S4HANA Product Scope Innovation Key Use Cases

Join the S4HANA Community on SCN Use Case Blog on SCN S/4HANA Cookbook SAP S/4HANA Road Map

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Finance Specific Artefacts

NA S4HANA Community 1610 Point of View Files

S/4HANA Cookbook by CIC-India Team


#S4HANA Finance Cloud (1702)


S/4HANA Finance all in one deck (179 slides)


S4HANA 1503 White Paper and Pov (for reference only)

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S4 HANA Enterprise Management Community on Connections

Cloud (updated on a regular basis with the latest content from

#S4HANA 1610 Help FPS01

#S4HANA 1610 Release information on one page


Learning Journey Blogs

Best Practice Explorer

S4HANA White Paper https://w3-

SCN Blog on 1610 Use case (Business and Technical View
Points including topics like AATP and EWM)

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Your first step toward SAP S/4HANA!

 Learn how SAP S/4HANA enables digital transformation

 Explore innovative financials and logistics functionality

 Understand the technical foundation underlying SAP S/4HANA advances

Purchase the book and e-book at:

 15% discount for IBMers using the code SAPS4HANA15

 Available as e-book as well as hardbound

SAP S/4HANA: An Introduction

Written by: Axel Baumgartl, Dmitry Chaadaev, Nga-Sze Choi, Mark Dudgeon, Asidhara
Lahiri, Bert Meijerink, Andrew Worsley-Tonks, Devraj Bardhan
449 pages | 11/2016 | E-book: $59.99 | Print: $69.95 | Bundle: $79.99

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IBM SAP Digital Transformation partnership

Joint Industry Thought leadership by IBM and SAP

CFO Perspective: Finance in the Era of

Digital Transformation:
External Link:

2015 POV

Also see IBM Business Value Institute’s study on CFOs

from the IBM C-Suite Studies

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