SAP S/4HANA Finance: From Batch to Real-Time Process

Financing Professionals as well as Controllers generally deal with increased workloads at the end of every duration, and specifically at the year-end. Batch jobs need to be started and results monitored and evaluated. Reliable information revealing the complete picture is only available after the period close procedure is completed. For companies with high work in process, this can imply that there are thousands of dollars remaining on projects waiting for the settlement.

The trouble with this method of working is that Controllers are indicated to be predicting the state of future organization yet mid-period can not even say where they stand today. In an unpredictable business atmosphere, this will not work any longer. The Universal Journal was the first logical step in moving beyond these constraints towards streamlined, multi-dimensional, real-time Financials.

More innovations will follow to overcome this traditional way of working and the restrictions and challenges controllers are facing.

We separate period-end closing jobs in different categories:

• Jobs that are not required any longer as data can already be provided with the initial postings. An example of this category is the derivation of market sector attributes that are done online with every posting, the reporting attributes belong to the universal journal, and settlements to CO-PA become obsolete because the posting to the order/project is immediately associated with the appropriate market segment attributes.
• Periodic postings that can be initiated event or transactions based on each primary process. Examples for these are overhead calculations and revenue recognition postings that can be posted along with the relevant procedure in S/4HANA. E.g. when you post a goods movement, the associated material overhead is immediately posted as a reference document.
• Jobs that stay periodic due to different reasons e.g. data is only needed for periodic external reporting.

But even for this type of periodic jobs, we will provide improvements as S/4HANA makes these jobs much faster and makes it possible for finance organizations to start them more frequently.

For the first category, where periodic postings are not needed any longer, the universal journal entry is enhanced with additional reporting characteristics. This works well if all reporting dimensions are known at the time of postings and if postings do not need to be split to several recipients. For example postings to sales orders can be assigned to a sales order or customer dimensions at the time of the posting, no periodic settlement to CO-PA or any reposting is needed. If not all reporting features are known at the time of posting, we provide re-alignment functions that enable a subsequent derivation of characteristics once the sales order has been assigned to the project.

The second category brings about more financial documents as the transaction-based calculations are not posted in additional journal entry lines yet end up in separate additional documents. Right here is an instance for event-based revenue recognition, a time confirmation posted to a consulting project will lead to two journal entries one for the cost posting to the project (consulting hours) and a second document that shows anticipated realized revenues.

Besides real-time margin reporting, this new functionality also simplifies analysis and Auditing as the values from revenue recognition are not just available for period totals but also for every single posting.

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Main Thoughts

Reliable information revealing the complete picture is only available after the period close procedure is completed. For companies with high work in process, this can imply that there are thousands of dollars remaining on projects waiting for settlement.

I hope that by now you have had an overview of SAP S/4 HANA Finance. Before you enroll in ZaranTech’s certification course on SAP S/4 HANA Finance, do check out the S4 HANA Finance demo: