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Christian Straub, SAP

Customer

S/4HANA Finance

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

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Agenda

(1) Introduction - What drives S4/HANA Finance?

(2) Foundation - SAP Accounting powered by HANA

(3) Foundation - FIORI in Finance

(4) Focus 1: Cash Management

(5) Focus 2: Integrated Business Planning

(6) Focus 3: Financial Close

(7) Focus 4: Central Finance

(8) S4/HANA Finance Adoption

Introduction - What drives S4/HANA Finance?


What drives S4/HANA Finance?


What drives S4/HANA Finance?

New technical

capabilities

Finance

transformation


Source: Ernst&Young; Closing Excellence – An analysis of the closing process of 60 large and mid-sized Danish companies, Nov, 2011

The transformation of Finance

…. But how to achieve that?


The transformation of FinanceValue Drivers

High degree of automation

Maximum reduction of data reconciliation necessities

Management by exception

End-to-End drill-through path to line item

Information provisioning according to business role

Realtime reporting capabilities with great User Experience


S4/HANA FinanceKey Characteristics

End-to-End insight in

realtime

Instant Insight

Intuitive User Experience

across devices

Intuitive

Cloud or On Premise

Flexible

Role-based coverage of finance needs

Role-based


S4/HANA FinanceEnd-to-End role-based

Full coverage of business roles in Finance!


S4/HANA FinanceEnd-to-End process coverage

VP of FinanceHead of Corporate Reporting

Corporate Treasurer

Head of Finance Operations

Chief Compliance Officer

Full process coverage!

Foundation - SAP Accounting, powered by HANA


Challenge of the «old» architectureReconciliation and insight

Reconciliation required between general ledger

and sub-ledgers

The different components hold different levels of

data granularity

Multiple extractors needed to combine and report

on the data in a Data Warehouse


The «new» architectureUniversal Journal

«1 line item table»


SAP Accounting powered by HANAUniversal Journal

One line item table with full detail for all

applications

Data stored only once: no more reconciliation

needed - by design

Fast multi-dimensional reporting

possible without replication


SAP Accounting powered by HANAUniversal Journal

ACDOCABKPF

BKPF to store the header

ACDOCA for the line item

BSEG still used for prima nota and open items, clearing

etc.

COEP still used for prima nota in case of manual CO

postings


SAP Accounting powered by HANAConvergence of G/L Accounts and Cost Elements – (New)

Secondary Cost

Primary Cost

Nonoperating expense / income

Balance Sheet Account

GL Account

P&L

All cost elements are now G/L accounts.

Differentiation by attribute “account type” in the G/L

account master.

Secondary cost elements are blocked against manual

postings.


SAP Accounting powered by HANALedger Concept

Ledger IFRSLedger Local GAAP

Extension Ledger 1

Extension Ledger 2 Adjustments to base ledgers as delta

Extension ledgers can be stacked

Use case: Management views on top of group valuation


SAP Accounting powered by HANAProfitability Analysis

Costing-based CO-PA Account-based CO-PA

Profitability Analysis in

the Universal Journal

Costing-based CO-PA groups costs and revenues

according to value fields and costing based valuation

approaches in a separate persistence

Account-based CO-PA store costs and revenues for

profitability analysis in GL accounts

Profitability Analysis in the Universal Journal is the

new profitability analysis as part of S4/HANA Finance. It is

technically based on the Account-based CO-PA


SAP Accounting powered by HANAProfitability Analysis - COGS / Cost component split

Income Statement

Revenue

- Cost of Sales Goods Sold

Gross Margin

+/- Other Revenue / Other Expenses

EBIT

+/- Amortization / Depreciation

- Marketing Cost

- R&D Cost

- Administration Cost

1.900

1.200

New Profitability Analysis

(based on accounts)

Sales & Sales Deductions 1.900

Net Sales

- COGS Labor 400

- COGS Material 550

- COGS Overhead 250

Standard Margin

- Production Variance

Gross Margin

Before SAP S/4HANA, COGS are posted to one

G/L account in accounting only

Details for manufacturing the product such as

labor or material costs coming from the costing

sheet, were not displayed.

Details – Cost Estimate

Labor 150

External Labor 250

Material fix 300

Material variable 250

Overhead 180

Administration 70

Total 1.200

Profitability Analysis has been refined to reflect the

standard cost component split on the G/L account


SAP Accounting powered by HANAProfitability Analysis - Product Cost Variances

Product Cost Variances, e.g. input price, quantity, waste, can be

defined as accounts and can be used in Profitability Analysis in

Universal Journal for root cause analysis of variances

Standard prices are used for produced materials

Details – Costing-based CO-PA

Input Price Variance 40

Input Quantity Variance 40

Resource-Usage Variance 0

Remaining Input Variance 0

Scrap 5

Lot Size Variance 15

Total 100

Income Statement

Revenue

- Cost of Sales Goods Sold

Gross Margin

+/- Other Revenue / Other Expenses

EBIT

+/- Amortization / Depreciation

- Marketing Cost

- R&D Cost

- Administration Cost

1.900

1.200

- Production Variance 100

New Profitability Analysis

(based on accounts)

Sales & Sales Deductions 1.900

Net Sales

- COGS Labor 400

- COGS Material 550

- COGS Overhead 250

Standard Margin

- Input Variance 80

Gross Margin

- Lot Size Variance 15

- Scrap 5

Production variances can occur on production orders where there

are differences between the actual costs (debit of the order) and

the target costs (credit of the order).

Before SAP S/4HANA, Product Cost Variances are posted to one

G/L account in accounting only.

Details of the variances were not displayed.


SAP Accounting powered by HANAProfitability Analysis - Realtime Derivation

Profitability characteristics are derived immediately at the point in time of each “primary” document.

No settlement run needed to show relevant market segment information in profitability


SAP Accounting powered by HANAProfitability Analysis - Considerations

Costing-based CO-PA and Profitability Analysis in the Universal Journal can run in parallel –

enabling to familiarize and validate a switch

Costing-based CO-PA cannot be migrated to Profitabilty Analyis in the Universal Journal

For the Account-based CO-PA migration programs are available to read and update Profitability

Segments from the old structures to the new universal journal


SAP Accounting powered by HANANew Asset Accounting / Multi-Currency handling

New Asset Accounting Multi-Currency

Parallel valuation

without delta

depreciation area

Acceleration of

closing tasks

Extended multi-

currency concept

Up to 8 freely

definable currencies

per ledger


SAP Accounting powered by HANAReduced Reconciliation Effort

** same with NEW GL

* for account-based COPA

G/L versus FI sub-ledgers and CO

G/L versus CO-PA *

Reconciliation of multiple ledgers **

Reconciliation Ledger **

Reconciliation of ERP and data warehouse

Reconciliation of totals vs. line items

Obsolete due to universal journal

Obsolete due to real-time analytics on SAP Accounting

Obsolete due to dropped totals

Foundation - Fiori in Finance


Fiori for Finance


Fiori for FinanceFiori 2.0


Fiori for Finance

Overview of a dedicated

topic for further KPI-

related analysis

Access to tasks like

change, create, or

approve processes with

guided navigation

View essential

information about

objects and contextual

navigation between them

Analytical Apps Transactional apps Factsheets


Live-Demo


SAP Fiori vs. SAP GUI

https://www.youtube.com/watch?v=v6tOQlBTAY4

https://www.youtube.com/watch?v=v6tOQlBTAY4

Focus 1 – Cash Management


SAP Cash Management on S4/FinanceTreasury Solution Map

Financial Risk

Management

Risk Identification

Type and Origin of Risk

Risk Quantification

Exposure MgmtRisk Analysis

Risk Management

Hedge with Financial Instruments

Payments and Bank

CommunicationsPayment Operations

Monitoring and Status

TrackingPayment Factory

Bank and SWIFT

ConnectivityWorkflow and Signatures

Cash and Liquidity

ManagementCash Position Bank Account ManagementElectronic Bank Statements Liquidity Management

Debt and Investment

Management

Front Office

Deal capture

Mid Office

Risk Controlling

Back Office

Correspondence & SettlementAccounting

Foundation Cloud Analytics MobileRapid Deployment

Solutions (RDS)HANA Platform

Suite Capabilities Shared Service CenterWorking Capital

ManagementGovernance Risk and Compliance Commodity Risk Management


Liquidity Planning /

Rolling Forecast

Liquidity Forecast

Cash Position

1-5 days Up to 24 weeks 1 year

Planning horizon

SAP Cash Management on S4/FinanceTerminology

Cash Flow

Analysis

History

Liquidity Management


Cash Flow Analysis


Cash Operations / Cash Position

Monitoring incoming bank statementsDaily forecast of cash receipts, disbursements,

and expected closing balances

Overseeing bank riskInitiating, approving and monitoring bank

payments


Cash Position DetailMulti-Dimensional + Multi-Day view

Multi-Day View


Liquidity Forecast

Forecast based on:

AR/AP

Payment

TRM / CML

Memo Records

SD (planned by end of 2015)

MM (planned for 2016)

Configurable Liquidity Item

Hierarchy to categorize cash

inflow, outflow, and business

origination


Liquidity Planning

Develop plans based on

references:

Bank opening balances

Liquidity Forecast

Previous Cycle Plan

Last Year Actuals

Flexible plan and variance

analysis


Bank Account Management

Workflow-based processes to centrally control

the opening, closing, modifying, and reviewing

processes of bank accounts

Cash pools management and cash

concentration

Cash Position analysis on Bank Accounts

instead of G/L Accounts

Central maintenance of important bank account

attributes such as payment signatories, internal

and external contact persons, overdraft limits

etc.


Comparison – Old vs. New

Detail comparison of old vs.

New cash management available

in note 2149337

Focus 2 - Integrated Business Planning


SAP BPC, optimized for S4/Finance

SAP S/4HANA

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

SAP BPC, optimized for

S4/FinanceNew capabilities and enhanced

integration for ERP and BPC


Evolution of SAP’s planning solutions

Business-focused

BPC

Integrated

BPC “Embedded”

BW-IP

BPC, optimized

for S4/Finance

BPS

Part of the SEM suite

First approach for mulit-dimensional planning

Integration of planning and reporting

BW-Query provides flexibility

Highly flexible tool

Separate namespace in BW

The best of both worlds

Merger of BPC and BW-IP on HANA

Integrated in S4/Finance

Links analytical and transactional world


BPC optimized for S4/HANA Finance

ACDOCA Master Data

BPC Embedded, powered by S4

Realtime access to S4/HANA masterdata (GL

Accounts, CostCenters, Internal Orders etc.)

Realtime access to S4/HANA transaction data

Content for financial planning


BPC optimized for S4/HANA Finance

Web- and Excel-based planning – Integration with

any BI tool

Rich set of functionality, including Process flow,

Data Audit etc.

Business unit extension using local master data,

local calculations and local providers


Financial

Statement

Cap Ex

Revenue

Holistic Approach to Integrated Business Planning (Vision)

Supply Chain

Liquidity Mgt.

Balance Sheet

Cash Flow

Statement

Profit & Loss

HR

Headcount &

Personal Costs

Strategic Targets

Demand

Supply

Production

GATP

Liquidity

Pricing

Revenue

Capital Expenditure

Asset Accounting

Cost

Activity Cost

Product Cost

Cost Center,

Project, Internal

Order


Live-Demo

Focus 3 - Financial Close


Accelerated Financial Close

Entity CloseCorporate

Close

Reporting &

Disclosure

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 51Customer 51

Accelerated Financial CloseEntity Close

Entity Close

ManagementAnalyze Execute

Plan

Monitor

Note: SAP Smart Business for Financial Close is currently only available for the SFIN add-on


Accelerated Financial CloseEntity Close

Prepare

Entity Close *

GL

Submit to Corporate

Close

Assets CostsCorporate Accounting Local Accountant

Execute Entity Close Tasks

Monitorand

Analyze

Define Global

Plan for

Entity Close

Local / Corporate Local Accountant


Accelerated Financial CloseIntercompany Reconciliation on HANA


Accelerated Financial CloseApproaches

Single source of truth – all data are reconciled by

design

Real-time profitability by earlier derivation of

market segment from cost center, internal order,

WBS element

Real-time overhead calculation

Correct asset acquisition values for all valuation

areas at any time – no more periodic posting run

required

Continuous intercompany reconciliation and

goods / invoice receipt reconciliation

Speed-up of period-end processes such as

material ledger close, accrual and overhead

calculation, allocations, results analysis, variance

calculation for production orders/cost centers, work

in process calculation, settlements, asset

depreciation, …

Significant speed-up of all kind of reporting for

better business decisions (through faster insight and

easier simulation) and higher quality (through easier

root-cause analysis)

Soft Close Hard Close


Acceleration of Period-End ProcessesCode Push-Down to SAP HANA

Functionality Old transaction New transaction

Settlement (production and process orders) CO88 CO88H

Settlement (make-to-order sales orders) VA88 VA88H

Settlement (internal orders) KO8G KO8GH

Settlement (projects) CJ8G CJ8GH

Results Analysis (POC method or revenue-based) KKAK KKAKH

WIP Calculation at Actual Costs KKAO KKAOH

Variance Calculation with Full Settlement KKS1 KKS1H

Variance Calculation for Cost Centers KSS1 KSS1H


Accelerated Financial CloseRealtime Consolidation

SAP S/4HANA

SAP HANA Platform

AlignedSingle Source of Truth

AgileReal time processes

PredictiveDynamic Planning and Analysis

SAP Cash

Management powered by SAP HANA

SAP Accountingpowered by SAP HANA

Integrated Business

Planning for Finance

Realtime Consolidation

(Planned)

BPC, optimized for S4/HANA

Fokus 4 - Central Finance


Heterogeneous landscapesChallenges

data

open

items

balancesline item

. . .

programs / user interfaces

data

open

items

balancesline item

. . .


data

open

items

balancesline item

. . .


data

open

items

balancesline item

. . .


data

open

items

balancesline item

. . .


data

open

items

balancesline item

. . .


data

open

items

balancesline item

. . .


. . .

data

open

items

balancesline item

. . .


Application

data

open

items

balancesline item

. . .


Distributed, non-unified processes

High cost of integration

Reporting difficulties

High cost of migration

…


Central FinanceDefinition

SAP S/4HANA Central Finance Foundation (Central Finance) is

an S/4HANA system, installed as side-car

receiving financial accounting transactions via real-time replication

from SAP or non-SAP ERP source systems.

Harmonized System Landscape

SAP HANA

Bz Model

agnostic

Fiori and Excel

Single

Source of Truth

Finance, Planning

& ConsolidationTransactions

AND analytics

*

*

*

*

Drill-backReal-timereplication

*


Central FinanceUse Cases

Reporting platform

Unified reporting on line

item level

Integrated model for

corporate planning and

consolidation

Process Centralization

Shared Services

Concepts; Centralization

across organizational units

and system

Complementary to

processes executed on

the source systems

Transformation Platform

Simplified S4/HANA

adoption in heterogeneous

landscapes

Fast time to value


Central FinanceTransformation Platform - Scenarios

System consolidation Subsidiary onboarding

new

Mergers & Acquisitions

Migrate and

decommission selected

existing SAP and non-

SAP ERP systems

Platform to onboard

smaller entities or

subsidiaries

Post-Merger integration

strategy


Central FinanceTransformation Platform - Scenarios

Move to the cloud SAP and 3rd Party

Stepwise transition to the

Cloud

Harmonize and

centralize finance

information across non-

SAP ERP or mixed

landscapes


Process CentralizationFocus Areas

Accounting and

Financial Close

Financial

Planning and

Analysis

Treasury and

Financial Risk

Management

Finance

Operations

Enterprise Risk

and Compliance

Management

Invoice

Management

Travel

Management

Receivables

Management

Enterprise Risk

Management

Controls &

Compliance

Management

Accounting

Entity Close

Corporate Close

Strategy

Development and

Translation

Planning,

Budgeting and

Forecasting

Profitability and

Cost Management

Payments and

Bank

Communications

Cash and Liquidity

Management

Debt and

Investment

Management

Monitoring and

Reporting

Reporting and

Disclosure

Financial Close

Governance

Commodity Risk

Management

Real Estate

Management

Financial Risk

Management

International Trade

Management

Fraud Management

Audit ManagementFinancial Shared

Services

= primärer Fokus = sekundärer Fokus

S4/HANA Finance - Adoption


SAP S/4HANA Finance – AdoptionMigration paths

AnyDB or SAP HANA

SAP ERP 6.0, EHP xx

SAP HANA

SAP Simple Finance on-

premise edition 1503

SAP HANA

SAP S4/HANA Finance

1605

SAP HANA

SAP S/4HANA, on-

premise edition 1511

SAP HANA

SAP S/4HANA 1610

B

CA

A From Business Suite to S4/HANA

B From Business Suite to S4/HANA Finance

C From S4/HANA Finance to S4/HANA

Wrap Up


S4/HANA Finance

232 Live Customer


Key Takeaways

S4/HANA Finance is the most comprehensive finance solution in the market

S4/HANA Finance is ready to be adopted right now - broad customer interest as proof point

S4/HANA Finance adoption is non-disruptive and supported by specific services

short presentation title has no obligation to pursue any course of business outlined in this...

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