The merge of finance and controlling in SAP S/4HANA Finance

Excerpt from Delta from SAP ERP Financials to SAP S/4HANA Finance by Oona Flanagan.
Prior to SAP S/4HANA, for each primary cost or revenue that you wanted to report separately, you had to create a general ledger account in the chart of accounts in FI as well as a matching cost element in CO. Sometimes this was done by two separate departments.
Depending on how well users in the organization understood the concept and controlled this, you could have situations where the cost elements were either omitted altogether; created for accounts that did not require them, such as financial and non-operating costs; or accidentally created for those specifically configured not to use cost elements. This sometimes forced a configuration change, as it was difficult, if not impossible, to then delete the cost element, especially if it had already been posted to.

In SAP S/4HANA, there is no separate cost element. Financial accounting (FI) and controlling (CO) have been partially merged by moving cost elements into the general ledger master data records and adding fields to control when and how they appear in controlling reports.

The exact detail of how to set up the combined new general ledger account master record will be found in Section 4.1 which deals with all the master data changes in SAP S/4HANA.

Now, postings to all G/L accounts will appear in financial reporting (you may need to filter out secondary costs depending on the report), but all primary and secondary costs will still appear in controlling reports. Non-operating expenses or income, i.e. profit and loss (P&L) accounts that previously would not have had a cost element, continue to appear only in finance reports.

Areas such as consolidations, profit center accounting, and special-purpose ledgers are still working, although some functionality may now be available elsewhere in SAP S/4HANA.

Fiscal-year variant tip: Because they are merged, finance and controlling must have identical fiscal-year variant codes and not just similar periods and year ends. This has particular relevance during a conversion to SAP S/4HANA as the fiscal-year variants need to be checked to ensure that they do not block the conversion.

Start reading now!

Learn what is meant by the merge of financial accounting and controlling in SAP S/4HANA. Discover how the accounting structure and tables have changed and what the implications are. Walk through each area of financial accounting and identify what has changed, along with relevant configurations. Take a look at how new general ledger transactions work in SAP S/4HANA and find out what the universal journal is. Explore important changes to asset accounting and identify updates to the underlying table structure to allow for real-time posting between asset accounting and the general ledger. Learn more about the preparation and migration tools available.

– Key changes to financial accounting and structure in SAP S/4HANA Finance
– New general ledger structure in the universal journal
– Master data changes in G/L accounts and the business partner
– SAP S/4HANA preparation and migration tools

Author Oona Flanagan is an Anglo-Irish freelance SAP FICO and SAP S/4HANA consultant, as well as a qualified accountant and published author. She has over 20 years of global implementation experience across multiple industries (pharma, fashion, food, beverages, consumer goods, media, packaging, shipping containers, banking, and transportation), as well as many years accounting experience. Oona loves languages and has worked in multiple countries during her SAP career. Oona owns her own company, Jazzmore Solutions Limited, has an MBA, and is a Fellow of both the Chartered Institute of Certified Accountants and the British Computer Society.