Getting Ready for SAP S/4 HANA

Below is a high level overview of preparatory tasks that are needed for S/4 Finance migration from earlier SAP ERPs in a brownfield implementation option. These tasks can vary depending upon the modules implemented, level of customization, current system version, complexity, etc… The idea here is to provide a high level understanding of the preparatory tasks specific to S/4 Finance migration.

The tasks are grouped by the following areas. Each area has the tasks, pre-checks, OSS Notes, SAP best practice recommendations and document links where relevant/applicable.

1. GL, AP/AR and CO
2. Asset Accounting
3. Business Partner, Customer Vendor Integration (CVI)
4. Other FI/CO modules

1. GL, AP/AR and CO

If you are using classical GL and want the new GL capabilities you have to migrate to new GL prior to installing the S/4 Finance Add On. It is not mandatory to have new GL to implement S/4. However the following features will not be available without new GL

• Document Splitting, Balance Sheet at Profit Center level, Migration of Special Purpose GL to new GL, Transfer of Quantities to new GL, New Implementation of Parallel Accounting, Segment Reporting, Ledger approach for parallel accounting, Changing or converting chart of accounts, Inclusion of Customer Fields

If you want to implement the new GL, a separate project for implementing the new GL is recommended instead of combining new GL project with S/4 migration

Reconciliation ledger is no longer needed to reconcile between FI and CO. All actual CO postings are updated in universal journal (ACDOCA table). There are exceptions, i.e. COEP still gets populated with data that are not posted to universal journal. The secondary cost elements are now created as GL accounts as well to eliminate the reconciliation needs.

Other Preparations includes

• Ensure all balances are carried forward to current fiscal year. i.e. GL, AP/AR and Assets
• For Account based CO-PA, run the delta upload
• In the classic GL, the valuation difference for all open items must be empty. If not, reset the valuation prior to S/4 installation. If this is not done, stored values of all open items will be posted for second time with the new valuation program.

Before migration, all sub ledgers must be fully reconciled and the inconsistencies must be cleaned up. Reconcile AA with GL (ABST and ABST2), reconcile AP/AR sub ledger with GL, reconcile MM with GL, reconcile ledgers (GCAC)

OSS notes for reference

• Check report for SAP S/4HANA Finance – 2176077

2. Asset Accounting

The New Asset Accounting is required in S/4. The Enterprise Extension EA-FIN and FIN_AA_PARALLEL_VAL must be activated.

If new asset accounting is not done already, it is recommended to make new AA as a separate project by itself instead of combining it with S/4 migration

For all additional currency types in company codes, there should be a depreciation area setup.

Please note that Application Link Enabling (ALE) to transfer assets is no longer possible after migration.

FI AA reconciliation is not needed due to universal journal. Many asset tables are replaced by ACDOCA and compatability views

Run special check report RASFIN_MIGR_PRECHECK for Fl-AA installed via SAP Note 1939592 which checks the following

• New GL is active
• Lease Accounting Engine (LAE) is not active
• Classic Real Estate (RE classic) is not active
• No requests (with reference to assets) are used in Public Sector Management – Fund
• Management (PSM-FM)
• All periodic postings are posted successfully: no update terminations

Please note that the closed fiscal years in FI:AA can not be reopened after migration due to structural changes.

Other preparation includes

• Perform period end closing activities including periodic asset postings and depreciation.
• No postings allowed during migration

OSS Notes for reference

• Difference between old and new depreciation calculation – 965032
• Pre-check report for migrating to new asset accounting – 1939592
• Changeover from old to new depreciation calculation – 1498047
• Check customizing settings prior to S/4 upgrade – 2129306
• Year-end closing reset not allowed for migrated years – 2304418

3. Business Partner Customer Vendor Integration (CVI)

If you are planning to implement only S/4 Finance as the Central Finance architecture, Customer Vendor Integration (CVI) is not mandatory. If it is a full S/4 HANA migration, CVI is needed.

More than 50 transactions are consolidated in BP. So CVI can get very complex depending upon the number ranges, field attributes, customization, volume, etc.. If different teams are responsible for maintaining the master data, there is a potential opportunity for process improvement as well. i.e. sales is responsible for customer data in sales segment and accounting is responsible for customer data in company code segment. Following are the modules getting impacted due to CVI

• Global Trade Services (GTS), Industry Solutions, Supplier Relationship Management (SRM), Collections Management (FSCM-COL), Credit Management (FSCM-CR), Treasury and Risk Management (TRM), Loans Management (FS-CML), Customer Relation Management (CRM), Supply Chain Management (SCM)

Depending upon the level of complexity, Business Partner Customer Vendor Integration may have to be dealt as a separate project by itself prior to S/4 HANA

Other preparations include

• All customer and vendor master records with deletion flags should be archived or they will get transferred as part of CVI
• BADI’s can be explored for complex mappings

OSS Notes for references

• Check report for CVI Customizing – 1623677
• Pre-check report from business partner – 2216176
• Guideline version for customer enhancements in CVI – 2309153
• Developer documentation for XO framework – 1623809
• Development of contact person for vendors – 1454441

4. Other FI/CO modules

The following work as before. However, please check the latest “Simplification List” from SAP for the complete and up to date information

• Profit Center Accounting (PCA)
• Special GL Transactions
• Consolidations
• Components built with FI-SL technology like JVA, Public Sector
• Costing based CO-PA work as before. However, SAP recommends to move towards Accounting based CO-PA to eliminate the reconciliation.

Activation of “Material Ledger” is required for S/4 HANA. Possible separate mini project?

A separate COS ledger and Consolidation Staging ledger are no longer needed.

Valuation Areas need to be defined for Foreign Currency Valuation

Factors to consider and Conclusion

Brownfield migration considerations

• The entire system can be migrated with the possible innovations
• The prerequisite projects should be weighed in for timeline and effort
• Limited possibilities for process improvements
• Duration of the project and carrying over the custom development
• Reporting tools and systems used, i.e. BI, BOBJ, etc..

Greenfield implementation considerations

• Process improvements based on new innovations and simplifications
• Building the new landscape make little disruption to existing systems
• Timeline and the investment on existing developments should be weighed in against the process improvements and benefits in short and long term

Central Finance Considerations

• Very little disruption to existing systems and process
• Quick turnaround and ROI
• Is a central reporting framework for Finance and can interface with non SAP systems on real-time
• Multiple versions of truth (Central and local systems), should the reporting be done in both the systems for Finance, a clear strategy should be developed
• Reconciliation between local and central systems
• Reporting tools that are already in use and the strategy to use the central finance system

All these factors should be considered which can influence the path for S/4 HANA implementations