Preface

15

The Purpose of This Book

15

Target Audience

15

The Structure of This Book

16

Acknowledgments

17

Maunil Mehta

18

Usman Aijaz

18

Sam Parikh

18

Sanjib Chattopadhyay

19

1 Finance Transformation

21

1.1 How to Embrace Finance Transformation

21

1.2 Why Is Finance Transformation Important?

22

1.2.1 Staying Ahead of Competitors

23

1.2.2 Meeting Compliance Requirements

23

1.3 How to Measure Shareholder Value

24

1.4 How to Increase Shareholder Value

27

1.5 Finance Operate Model

30

1.6 Summary

30

2 Architecture

33

2.1 The System: SAP S/4HANA

33

2.1.1 SAP S/4HANA Finance

34

2.1.2 SAP Landscape Transformation Replication Server

35

2.1.3 SAP Master Data Governance

36

2.1.4 SAP Business Technology Platform

37

2.2 The Database: SAP HANA

39

2.3 The Table Structure: Universal Journal

41

2.4 The User Experience: SAP Fiori

43

2.4.1 Transactional Applications

44

2.4.2 Analytical Applications

46

2.4.3 Fact Sheet Applications

47

2.5 The Network: Peripheral Cloud Applications

48

2.5.1 SAP Analytics Cloud

48

2.5.2 SAP Ariba

50

2.5.3 SAP Concur

52

2.5.4 SAP Fieldglass

54

2.5.5 SAP SuccessFactors

56

2.6 Summary

57

3 Financial Accounting

59

3.1 Finance Master Data

59

3.1.1 Company Code

59

3.1.2 Chart of Accounts

60

3.1.3 Organizational Structure and Hierarchies

61

3.1.4 Business Partners: Customers, Vendors, and Banks

61

3.1.5 Assets Master Data

64

3.2 General Ledger

64

3.2.1 Process Overview

64

3.2.2 Universal Journal

65

3.2.3 Finance and Controlling Merged into One

67

3.2.4 Parallel and Extension Ledgers

68

3.2.5 General Ledger Reporting

69

3.3 Accounts Payable

72

3.3.1 Process Overview

72

3.3.2 Vendor Invoice Management

72

3.3.3 Integration with SAP Ariba

74

3.3.4 Payables Management and Reporting

74

3.4 Accounts Receivable

75

3.4.1 Process Overview

76

3.4.2 Post Accounts Receivable Transaction

77

3.4.3 Credit, Collections, and Dispute Management

78

3.4.4 Accounts Receivable Reporting

85

3.4.5 Receivables Management Reporting

86

3.4.6 Receivables Management Dashboard

88

3.5 Asset Accounting

91

3.5.1 Process Overview

91

3.5.2 Asset Parallel Ledger

92

3.5.3 Asset Management and Reporting

96

3.6 Central Processing

103

3.6.1 Central Payment

104

3.6.2 Central Treasury

105

3.6.3 Central Asset Accounting

106

3.7 Reporting

107

3.7.1 Flexible Reporting

107

3.7.2 Reporting on Various Hierarchies

108

3.8 Summary

108

4 Management Accounting

109

4.1 Cost Element Accounting

110

4.1.1 Process Overview

110

4.1.2 Primary and Secondary Cost Elements

110

4.1.3 General Ledger Account Types

114

4.1.4 Profit and Loss Account Types

116

4.1.5 Cost Element Accounting Reporting

117

4.2 Overhead Cost Controlling

118

4.2.1 Process Overview

119

4.2.2 Cost Allocations

120

4.2.3 Internal Orders

123

4.2.4 Project Cost Reporting

124

4.2.5 Flexible Hierarchies

125

4.2.6 Overhead Cost Controlling Reporting

126

4.3 Product Cost Controlling

127

4.3.1 Process Overview

127

4.3.2 Costing Runs

128

4.3.3 COGS Split by Cost Component

129

4.3.4 Work in Process Analysis

131

4.3.5 Production Variances Split by Variance Category

131

4.3.6 Manage Material Valuations

132

4.3.7 Material Inventory Values: Balance Summary

133

4.3.8 Material Price Analysis

134

4.3.9 Production Cost Analysis

135

4.3.10 Product Cost Controlling Reporting

136

4.4 Material Ledger and Actual Costing

141

4.4.1 Process Overview

142

4.4.2 Transfer Pricing and Multiple Valuation Approaches

143

4.4.3 Actual Costing Runs

145

4.4.4 Material Ledger Reporting

147

4.5 Margin Analysis

149

4.5.1 Process Overview

150

4.5.2 Additional Quantity Fields

151

4.5.3 Combined Profitability Analysis

152

4.5.4 Attributed Profitability Segment

154

4.5.5 Real-Time Derivation of Market Segment

155

4.5.6 Profitability Reporting

155

4.6 Central Projects

157

4.7 Summary

158

5 Treasury and Risk Management

159

5.1 Cash Management

160

5.1.1 Process Overview

160

5.1.2 Liquidity Forecasting

161

5.1.3 Cash and Liquidity Management

163

5.1.4 In-House Cash

163

5.1.5 Advanced Payment Management

166

5.1.6 Cash Management Reporting

167

5.2 Liquidity Planning and Forecasting

170

5.2.1 Process Overview

171

5.2.2 Liquidity Planning Objects

172

5.2.3 Liquidity Planning Data

173

5.2.4 Liquidity Planning and Forecasting Reporting

173

5.3 Transaction and Risk Management

175

5.3.1 Process Overview

176

5.3.2 Transaction Manager

177

5.3.3 Risk Analyzers

178

5.3.4 Transaction and Risk Reporting

178

5.4 Bank Account Management

183

5.4.1 Process Overview

183

5.4.2 Bank Account Master Data

185

5.4.3 Bank Account Hierarchy and Bank Account Groups

188

5.4.4 Bank Account Management Workflow

189

5.4.5 Cash Concentration

190

5.4.6 Bank Reconciliation

191

5.4.7 Bank Communication Management

192

5.4.8 Bank Account Management Reporting

193

5.5 Summary

194

6 Financial Planning

197

6.1 Financial Planning and Analysis

198

6.1.1 Extended Planning and Analysis

199

6.1.2 Strategic Planning

200

6.1.3 Budgeting

201

6.1.4 Forecasting

201

6.1.5 Challenges

202

6.2 Planning Products

204

6.2.1 SAP Analytics Cloud

205

6.2.2 SAP BPC, Version for SAP BW/4HANA

219

6.2.3 Hybrid Deployment

222

6.3 Planning Scenarios

223

6.3.1 Profit and Loss Statement Planning

224

6.3.2 Sales and Cost of Goods Sold Planning

225

6.3.3 Overhead Expense Planning

226

6.3.4 Capital Expense Planning

226

6.3.5 Cost Center Planning

227

6.3.6 Balance Sheet and Cash Flow Planning

228

6.4 Summary

229

7 Financial Close and Consolidation

231

7.1 Entity Close

232

7.1.1 Process Overview

232

7.1.2 Challenges in the Typical Closing Process

233

7.1.3 Advanced Financial Closing

234

7.1.4 Emerging Technologies

240

7.2 Settlements and Assessments

241

7.2.1 Process Overview

242

7.2.2 Universal Allocation

244

7.2.3 Planning Engine

249

7.2.4 Settlements

249

7.3 Intercompany Accounting, Reconciliation, and Eliminations

250

7.3.1 Process Overview

251

7.3.2 Stock Transport Orders

252

7.3.3 Intercompany Drop Shipment Scenarios

253

7.3.4 Intercompany Matching and Reconciliation

254

7.3.5 Intercompany Eliminations

259

7.4 Currency Translation

262

7.4.1 Process Overview

262

7.4.2 Currencies and Exchange Rates

262

7.4.3 Post Currency Adjustments

263

7.4.4 Foreign Currency Revaluation

263

7.4.5 Currency Translations

266

7.5 Group Reporting

269

7.5.1 Process Overview

269

7.5.2 Consolidated Reporting

273

7.5.3 SAP Analysis for Microsoft Office

277

7.5.4 SAP Analytics Cloud

279

7.6 Summary

279

8 Reporting and Analytics

281

8.1 Enterprise-Wide Finance Reporting

281

8.1.1 Reporting Strategy

282

8.1.2 Reporting Organization

285

8.2 Tax and Compliance Reporting

285

8.2.1 Tax Reporting

286

8.2.2 Advanced Compliance Reporting

290

8.2.3 Manage Withholding Tax

292

8.3 Statutory Reporting

292

8.3.1 XBRL Reporting

293

8.3.2 Other Reporting Requirements

294

8.3.3 SAP Disclosure Management

295

8.4 Reporting and Analytics Tools

296

8.4.1 SAP Fiori

298

8.4.2 SAP Analysis for Microsoft Office

304

8.4.3 SAP Analytics Cloud

312

8.4.4 Predictive Analytics

320

8.4.5 Artificial Intelligence

324

8.5 Summary

327

9 Deployment Options

329

9.1 On-Premise versus Public or Private Cloud

329

9.1.1 On-Premise

332

9.1.2 SAP S/4HANA Cloud, Public Edition

333

9.1.3 SAP S/4HANA Cloud, Private Edition

333

9.1.4 Hybrid Cloud

334

9.2 Single Instance versus Multiple Instances

335

9.2.1 Single Global Instance

335

9.2.2 Multiple Instances

337

9.3 Rollout Options

338

9.3.1 Big Bang Approach

340

9.3.2 Phased Rollout by Functionality

341

9.3.3 Phased Rollout by Geography or Business Unit

342

9.3.4 Rollout Strategy: Decision-Making Approach

342

9.4 Central Finance

344

9.4.1 SAP S/4HANA Migration Options

347

9.4.2 Use Cases

349

9.4.3 Deployment Options

351

9.4.4 Limitations

353

9.5 Standalone Treasury

353

9.5.1 SAP S/4HANA Migration Options

354

9.5.2 Use Cases

354

9.5.3 Deployment Options

356

9.5.4 Limitations

356

9.6 SAP Master Data Governance

357

9.6.1 SAP S/4HANA Migration Options

357

9.6.2 Use Cases

358

9.6.3 Deployment Options

358

9.6.4 Limitations

359

9.7 SAP Fiori

360

9.8 Summary

360

10 Planning an SAP S/4HANA Finance Project

361

10.1 Designing the Landscape of the Future

361

10.1.1 Business Climate

362

10.1.2 Other Parallel Initiatives

362

10.1.3 Business Segments and Markets

362

10.1.4 Organization Stakeholders

363

10.1.5 Transformation Roadmap

363

10.2 Anticipating Project Complexity

364

10.2.1 Global Rollout

366

10.2.2 Organizational Change Management

366

10.2.3 Internal Staffing and Readiness

368

10.2.4 Data and Legacy Systems

368

10.3 Building a Business Case for Your Organization

369

10.3.1 Cost/Benefit Analysis

370

10.3.2 Change Management and User Experience

370

10.3.3 Reporting

371

10.4 Choosing an Implementation Approach

374

10.4.1 Waterfall versus Agile versus Hybrid Agile

374

10.4.2 Phased versus Big Bang

377

10.4.3 Phase 0 Assessment

378

10.5 Choosing a Partner/System Integrator

379

10.6 Summary

380