S4F10 – Business Processes in Financial Accounting (S/4HANA)

Unit-by-unit study notes written from the course material. Every lesson of the course is covered in the same order as the original.

Unit 1: SAP S/4HANA Overview

Lesson 1: Getting an Overview of SAP S/4HANA

Explain the technology and business drivers behind SAP S/4HANA, position it inside SAP's Intelligent Enterprise portfolio, and compare the cloud and on-premise deployment options.

Learning Journeys

SAP publishes visual "Learning Journeys" for each solution area. The Financial Accounting journey places S4F10 at the start of the FI curriculum, followed by the deeper S4F12/S4F13/S4F15/S4F17 courses. Searching the web for "SAP Learning Journeys" is the quickest way to find the current roadmap.

Why a new ERP? The connected digital world

The lesson opens with the business context: data volumes are exploding (most of the world's data was created in the last two years), business networks and connected devices ("things") are growing rapidly, mobile users number in the billions and more than half of all workloads already run in the cloud. Classic ERP systems designed around disk-based databases cannot deliver real-time insight in this environment.

Advances in hardware that make SAP HANA possible

• Huge main memory – an entire enterprise database can now reside in RAM, so there is no waiting for data to be loaded from disk. Even SSDs are far slower than memory, so memory is no longer the bottleneck.
• 64-bit operating systems – required to address such large memory areas (32-bit systems cannot).
• Multi-core CPUs – complex tasks (even predictive analysis) are split and processed in parallel, giving real-time response times.
• Scale-out – more servers can simply be added to the landscape for more memory or processing power.
• Cloud maturity and virtualization – subscription-based public cloud lowers cost and complexity for customers who do not want to run their own landscape.

SAP rewrote its application code specifically to exploit these architectures, working with hardware partners who shared CPU blueprints.

OLTP and OLAP reunited (HTAP)

Traditionally, transactional systems (OLTP – optimized for fast record-level read/write) and analytical systems (OLAP – optimized for batch loading, aggregates and read-heavy queries) were separate and connected by periodic "lift and shift" interfaces. Consequences: multiple data copies, latency, no consistent enterprise-wide picture, and analysis often possible only the next day. SAP HANA's database, hardware model and data model handle both workloads on one platform – Hybrid Transaction/Analytical Processing (HTAP). There is a single copy of live data, no data movement, less complexity, and new application types that mix transactions and analytics become possible (embedded analytics in S/4HANA).

SAP S/4HANA – the Intelligent Core

SAP's vision: best-run businesses are intelligent enterprises that combine advanced technology with best-practice, integrated business processes. The portfolio has four core components:

The solution areas named in the big picture are: Business Network (procurement, travel, contingent workforce – digitalizing cross-company processes), Experience Management (acting on customer/partner/employee sentiment), Intelligent Suite (agile integrated processes with embedded analytics – a 360° view of employees, customers, products, spend, finance and IT), Industry Cloud (vertical solutions from SAP and partners), Sustainability Management (the "Climate 21" initiative, e.g. greenhouse gas tracking) and the Business Technology Platform (data management, analytics, application development/integration, AI, machine learning, IoT). Integration of end-to-end processes is SAP's declared top priority.

The Universal Journal enables continuous accounting

In S/4HANA every financial posting writes line items to one table, the Universal Journal (ACDOCA), which merges the data of all finance components (G/L, CO, AA, ML, etc.) into a single structure – the "single source of truth". Many redundant totals and index tables of ECC were removed, shrinking the data footprint and simplifying the application design and extensibility. This is the technical basis for real-time, continuous accounting rather than period-end batch reconciliation.

Deployment options

SAP S/4HANA (on-premise) and SAP S/4HANA Cloud share one data model, one user experience and one code line, so customers can combine them freely. The dimensions that drive the on-premise vs. cloud decision:

Summarized as two families: Cloud (public or private SaaS; standardized best-practice processes, innovations up to four times a year, fast time to value, lower TCO) and Any premise (own data center or IaaS provider; full control, specialization, unrestricted customization and extension).

Lesson 2: Introducing SAP Fiori

Describe the SAP Fiori user experience principles, the three app types, and the launchpad features (tiles, personalization, spaces and pages) that an FI user relies on.

Scenario

You want users to work with the business suite on any device without compromise, with a solution that integrates into the existing landscape and can be extended – and you want to verify that SAP Fiori meets these demands.

The SAP Fiori UX paradigm – five pillars

SAP Fiori launchpad as single entry point

The launchpad is where everything starts: apps are opened via tiles, links or search. SAP Fiori brings a harmonized look and feel across all SAP products, embedded intelligent guidance (machine learning, dynamic home pages, a digital assistant/SAP CoPilot) and cross-product, cross-device integration through adaptive home pages and notifications. The design shifts from monolithic transactions to activity-based apps. The "pyramid" of use: at the top, Overview Pages, List Reports and Work Lists show what needs attention and notifications alert on urgent items; users trigger quick actions (extend a contract, change a delivery date) or drill down; further down, key use cases are re-imagined, e.g. an Object Page showing all details of a business object or quick editing of frequently changed sales-order fields.

Three app types

Launchpad features

• Themes and branding; personalization by the user.
• Stable URLs for bookmarking and sharing; browser-based, so it runs on many devices and browsers.
• Active (dynamic) tiles that show up-to-date figures on the home page without opening the app.

User personalization

Users can add apps from the catalogs assigned to them, remove apps they do not need, and save apps with pre-set filters (variants). Course example: a group cash manager focused on Germany creates a tile that opens the cash position already filtered to the German market – one click from the home page.

Spaces and pages

The newer spaces mode gives administrators more control over the layout for user groups. Pages are grouped into spaces, and spaces are assigned to business roles, so the role decides which spaces a user sees. A page is structured into sections, which define the order of apps – e.g. most-used apps in the top section and related apps grouped in further sections. SAP delivers predefined spaces and pages as a starting point.

Unit 2: Overview of Financial Accounting (FI) in S/4HANA

Lesson 1: Outlining Financial Accounting Components in SAP S/4HANA

Describe the purpose and main features of each FI component and understand that every sub-ledger posting is simultaneously a general ledger posting via reconciliation accounts.

The FI landscape

Financial Accounting is the external, legally oriented part of SAP finance. It consists of a general ledger surrounded by sub-ledgers (also called subsidiary ledgers), each specializing in one type of business partner or object. Because the system is integrated with logistics, HR and controlling, FI data is complete and up to date without manual re-keying.

General Ledger Accounting (FI-GL)

The G/L provides the complete, account-based picture for external accounting. It captures primary postings and the settlements coming from internal accounting (CO) in one fully integrated system. Characteristics the course stresses:

• Reporting at any organizational level – company, group or corporate.
• Every sub-ledger item is posted automatically and at the same moment to the appropriate G/L reconciliation account.
• Real-time evaluation: account displays, financial statements with different financial statement versions, and other analyses.
• Drill-down at every level: from balance sheet/P&L to totals (transaction figures), journals, account information and finally the original document.

Accounts Payable (FI-AP)

AP manages all vendor accounting and is tightly linked with purchasing, where deliveries and invoices are tracked per vendor; logistics transactions trigger postings automatically. AP also feeds Cash Management with invoice data for liquidity planning. Features:

• Payment program settles payables with all standard payment methods – printed (checks, transfers) and electronic (DME, EDI) – including country-specific methods.
• Dunning program can also be used on the vendor side, e.g. to collect an outstanding credit memo.
• Every AP posting updates the G/L simultaneously (payables, down payments, etc.); due-date forecasts and standard reports help monitor open items.
• Correspondence (balance confirmations, account statements) is configurable; balance lists, journals and balance audit trails document the transactions.

Accounts Receivable (FI-AR)

AR manages all customer accounting and is an integral part of sales management. Features:

• Postings update the G/L immediately (receivables, down payments, bills of exchange on separate reconciliation accounts).
• Open-item monitoring tools: account analysis, alarm reports, due-date lists, a flexible dunning program.
• Configurable correspondence: payment notices, balance confirmations, account statements, interest calculation.
• Incoming payments are cleared manually through convenient screens or electronically (EDI, bank statement).
• The payment program handles direct debits and down payments automatically.
• Closing support: foreign-currency items are revalued, customers who are also vendors are listed, and balances are sorted by remaining term.
• Because of the close link to SD, AR supplies the data for credit management, and via Cash Management for liquidity planning.

Asset Accounting (FI-AA)

FI-AA is the sub-ledger for fixed assets and provides detailed information on all asset transactions. Key points:

• Designed for international use – no country-specific valuation rules are hard-coded; the country/company character comes from Customizing, with SAP supplying country-specific defaults to minimize effort.
• Integration: MM can post directly to assets (goods receipt, invoice receipt or warehouse withdrawal for a purchased or self-produced asset); depreciation and interest flow to FI and CO; PM maintenance orders that must be capitalized are settled to assets.

Bank Accounting (FI-BL)

FI-BL covers everything processed with the bank: bank master data, cash balance management (check and bill-of-exchange management) and the creation and processing of incoming and outgoing payments. All country-specific aspects – manual and electronic payment procedures, payment forms, data media – can be defined freely.

Layout of a financial statement

The financial statement structure (balance sheet / statement of financial condition plus P&L) is country- and customer-specific. In SAP it is modelled as a financial statement version. Guidance for public entities comes from the International Accounting Standards Board and national bodies.

Unit 3: General Ledger (G/L) Accounting

Lesson 1: Outlining Organizational Elements in Accounting

Explain the company code and the other FI reporting dimensions, show how company codes are assigned to a controlling area and operating concern, and compare the two ways of producing parallel financial statements.

Business example

The demo group operates companies worldwide; each must satisfy national reporting rules, so each is set up as a separate company code. Nevertheless the board wants all of them in one controlling area because of the intense inter-company activity.

Company code

• The smallest organizational unit for which a complete, self-contained set of accounts (balance sheet and P&L) can be drawn up for external reporting – an independent accounting entity, typically a legal company in a group.
• Four-character alphanumeric key (course examples: 1010 Germany, 1710 USA).
• Each company code has a local currency; foreign-currency amounts are translated automatically.
• G/L accounting is kept at company code level; every FI posting needs a company code, entered manually or derived from other data (e.g. plant, sales organization).

Other organizational units

For company code, profit center, business area and segment a fully balanced set of financial statements can be produced.

Parallel financial reporting

Companies usually report under more than one accounting principle: a local GAAP (US GAAP, German HGB) plus IFRS or group standards. SAP offers two techniques:

Profit centers

In S/4HANA the profit center is part of Financial Accounting: it is stored on every line of the Universal Journal and works, like the company code, as a reporting dimension, so standard financial statements per profit center are possible. A profit center may represent an organizational unit (a plant), a line of business or a geographical location. It is a profit responsibility area – not to be confused with a cost center. ECC note: in classic G/L, profit center accounting was the CO component EC-PCA; it can still run in S/4HANA after a migration, but running both approaches in parallel is not recommended.

Segments

Segments serve external segment reporting (IFRS 8, US GAAP). The aim is to show the different business activities of a diversified company and its general environment; the purpose is a better view of economic performance, better forecasting of sales and reserves, and earlier recognition of risks and opportunities. A reportable segment is an operating segment whose revenue or assets reach at least 10% of the combined total of all operating segments. In S/4HANA the segment is written to each document line at posting time; it is normally derived from the profit center (the segment is stored in the profit center master record), not typed in. Period-end CO allocations also update the segment, keeping FI segment reporting in line with what the business sees.

Lesson 2: Maintaining G/L Master Records

Describe the structure of a G/L account (chart of accounts segment and company code segment), the role of account groups and G/L account types, reconciliation accounts, financial statement versions and the three kinds of charts of accounts.

Business example

The company increases its capital from corporate funds and needs a new equity G/L account. Before it can be posted, the account must exist in the operating chart of accounts and have a company code segment in the relevant company code.

Chart of accounts

• An ordered list of all G/L account definitions – account number, name and G/L account type (e.g. balance sheet, primary cost/revenue).
• Any number of charts can be defined; SAP delivers many country-specific ones.
• Every company code is assigned exactly one operating chart of accounts in configuration; several company codes may share one, which gives their accounts an identical structure. Demo: company codes 1010 (DE) and 1710 (US) both use YCOA.

Two segments of a G/L account master record

Example of a company-code setting: account currency. In 1010 most accounts are in EUR, in 1710 in USD. If the account currency equals the company code's local currency, the account can be posted in any currency.

Account groups

Every G/L account must be created with an account group. Account groups bundle accounts with similar business functions (cash, expense, revenue, other balance sheet accounts). They control two things:

• the number range – which account numbers are allowed for which kind of account;
• the field status of the company code segment – which fields are required, optional or hidden when the master record is maintained.

G/L account types (S/4HANA)

For the two CO-relevant types a cost element category must be assigned in the controlling-area data; it determines which CO business transactions may use the account – e.g. category 21 (internal settlement) restricts a secondary cost account to settling order or project costs. Asset and material balance sheet accounts can optionally be integrated with CO if they are defined as reconciliation accounts and assigned in the AA or MM account determination.

Fiori app: Manage G/L Account Master Data shows the general (chart of accounts) data and gives access to the company-code and controlling-area data of an account.

Reconciliation accounts

A reconciliation account links a sub-ledger to the general ledger in real time: a posting to a customer, vendor, asset or contract account simultaneously updates the assigned reconciliation account. Direct manual postings to reconciliation accounts are not possible – they are updated only through the sub-ledger. Sub-ledgers connected this way: Accounts Payable, Accounts Receivable, Asset Accounting and Contract Accounting.

Financial statement versions

A financial statement version (FSV) defines which accounts appear in which line of the balance sheet and P&L. Different versions satisfy different requirements – the demo company needs HGB for 1010 and US GAAP for 1710. SAP ships many FSVs; at report runtime you select the version that defines the report structure. An account not assigned to any FSV line shows up under "accounts not assigned".

Country-specific and group charts of accounts

Lesson 3: Posting Transactions in the G/L

Post journal entries with the Fiori app and the classic complex posting screen, understand document structure, document types and posting keys, and analyze the result through balance and line item displays and the financial statements.

Business example

Accountants post many journal entries daily using different entry screens. All of them end up in the income statement or balance sheet (if the accounts are in the FSV) and can be inspected per account. The capital increase from the previous lesson is now posted to the new equity account.

Fiori app Post General Journal Entries

The entry screen is divided into areas:

Templates are created with the app Manage Journal Entry Templates: you choose the fields and values needed for a recurring use case (e.g. submit and post) and may make the template public for colleagues.

Complex (general) posting – the classic FB01 flow

1. Initial screen: enter the document header plus posting key and account of the first line item. The posting key tells the system the account type (G/L, customer, vendor, asset, material) and influences the next screen; the main driver of the line-item screen layout is the field status group of the account.
2. Line item 1 detail screen: amount and additional account assignments (business area, cost center, profit center…).
3. At the bottom, enter posting key and account of line item 2; Enter leads to its detail screen.
4. Post. If the expense account has G/L account type Primary Costs or Revenue (cost element), the line is also passed to Controlling (cost/revenue elements exist only for P&L accounts).

Accounting document structure

Every FI document consists of a header (document type, dates, currency, reference) and line items (at least two, debits = credits). The document receives its number from the number range assigned to its document type.

Document types

Document types classify and sort accounting documents and carry the number range. Important standard types shown in the course figure:

Posting keys

Each line item has exactly one posting key, which controls (a) the account type posted to, (b) debit or credit, and (c) the field status of additional data. In the Enjoy transactions and Fiori apps you only choose Debit or Credit – the system inserts the key, which still appears in the document and still exerts its control functions.

For pure G/L postings only 40 and 50 are needed. A posting key is always valid for one account type only.

Analyzing the result

• Balance display – overview of the saved transaction figures of an account per period; expand a node to list the items behind a balance, then branch to the document.
• Line item display – FAGLL03 (Display/Change Items) or the apps Display G/L Account Line Items – Posting View / – Reporting View; the open/cleared status is available for G/L accounts only.
• If the original document was archived optically, it can be displayed from the FI document.
• The posting appears in the balance sheet / income statement only if its account is assigned to a line of the FSV used; otherwise it is shown under "accounts not assigned".

Unit 4: Accounts Payable

Lesson 1: Maintaining Vendor Master Records

Explain how vendor master data is organized in SAP S/4HANA using the Business Partner – its roles, categories, groupings and data segments – and how customer/vendor integration keeps the FI vendor account in sync.

Business example

A foreign employee will arrive in Hamburg next month; the company has rented an apartment through a realtor and signed the lease. Accounting must create a vendor master record for the landlord so that the monthly rent can be posted and paid.

The Business Partner (BP) as single point of entry

In S/4HANA vendors (and customers) are maintained through the Business Partner – one object and one UI (transaction BP, Fiori apps Maintain Business Partner / Supplier Master) for business partners, customers and vendors. The classic ECC transactions FK01/XK01 are no longer used.

Structure of the BP master record

A vendor account therefore has two segments – general data at client level and company code data; the reconciliation account sits in the company code segment. If MM purchasing is also used, a third segment (purchasing organization data, see Lesson 3) is added.

Customer/Vendor Integration (CVI)

Technically AP still uses its own vendor master tables, which are embedded in every accounting transaction. Therefore the BP and the FI vendor must exist synchronously. CVI runs in the background: when a BP is created or changed, the system creates or updates all required fields of the vendor account according to the synchronization control and CVI settings in Customizing. Users only ever touch the BP.

Lesson 2: Maintaining Accounts Payable Transactions

Post vendor invoices and credit memos, understand document splitting and the CO account assignment rules, set up recurring entries, and pay vendors manually or with the five-step automatic payment program.

Business example

The realtor's commission of 4,000 EUR arrives as an invoice directly in accounting (master record already exists). The rent of 2,000 EUR per month is to be generated automatically as an open item on the landlord's account by the recurring entry program and paid by the periodic payment run. The realtor wants his money quickly, so a cheque is created and the payment posted manually. After each step the accountants review the accounts.

Vendor invoices and credit memos (Fiori app Create Incoming Invoices / FB60)

An invoice entered directly in AP, without a purchase order, is a "miscellaneous" invoice. The screen has four areas:

Foreign-currency invoices are translated into local currency with the stored exchange rates. An operating expense line needs a CO-relevant assignment (cost center, internal order); the G/L account must be of type Primary Costs or Revenue with a cost element category so that a CO document is created alongside the FI document.

Document splitting

Scenario: the realtor's commission covers apartments for two employees in different departments, i.e. two cost centers. The demo company produces balance sheets and P&L per segment, and the segment is derived automatically (cost center → profit center → segment; the profit center can also come from an internal order or project). The user enters three lines – vendor total, expense 1 (cost center A), expense 2 (cost center B); the tax line is added automatically from the tax code, so the entry view has four lines. But the vendor and tax lines carry no segment, so the segment balance sheets would not balance. With document splitting activated, the system splits the vendor and tax items proportionally across segments 1000_A and 1000_B and inherits the segment to them – the general ledger view has six lines and a zero balance per segment. Benefits: complete, balanced segment financial statements without the user having to type six lines. If splitting is not active, both views are identical. The same mechanism works for customer invoices whose revenue is spread across entities.

CO account assignment logic

Posting to an FI account with a primary cost element requires a CO account assignment object, which is real or statistical (an internal order is defined as one or the other at creation). Real objects can be allocated further in CO; statistical assignments are for information only and cannot be allocated. Rules:

• Every posting line needs exactly one real CO object.
• A statistical object (e.g. statistical order) cannot be assigned without a real object.
• Costs cannot go to more than one real object per line – exception: cost center plus one other real object, in which case the other object is real and the cost center becomes statistical.
• The cost center is always a real object but can receive both real and statistical postings; any number of statistical objects may be added.

Recurring entry program

For postings repeated at fixed intervals (rent, fees, property tax). Flow:

1. Create a recurring entry original document (FBD1) containing first and last run date, interval and next planned posting date, plus the posting data.
2. Run the recurring entry program (F.14) periodically with a date range; it selects all original documents whose next run date falls in the range and creates a batch input session.
3. Process the session (SM35): the accounting documents are posted and the next run date in each original document is advanced.

Outgoing payment process

Payments can be made manually (post outgoing payment with cheque – F-58/Fiori Post Outgoing Payments) or automatically with the payment program (F110, Fiori app Manage Automatic Payments). Elements of a payment transaction: company code, paying company code, vendor/customer, payment method, house bank and partner bank, forms. Standard payment methods and their forms are delivered per country. The payment program was built for international payments to vendors and from customers; it handles incoming and outgoing payments but is mostly used for outgoing ones.

The proposal can be skipped – then the clearing postings are made directly after the parameters are entered.

Lesson 3: Managing the Integration between AP and Materials Management

Understand the MM organizational units and purchasing data of the supplier, the procurement cycle, and exactly which steps of the three-way match generate FI documents.

Business example

Plant 1010 needs tyres and tubes. The responsible purchasing organization orders them from a known supplier; some days later the goods arrive, then the invoice.

Organizational units in MM

• Plant – the central logistics unit: an operating area or branch (central warehouse, regional sales office, factory, headquarters, maintenance plant). A plant belongs to exactly one company code; a company code can have many plants. All plants of the demo company in Germany post to company code 1010.
• Purchasing organization – negotiates purchasing conditions with suppliers; the purchasing data of the supplier is specific to one purchasing organization.

Supplier purchasing data

To use a vendor in procurement, the BP needs an MM role (e.g. FLVN01 – Supplier). Just as several company code segments may exist, several purchasing-organization segments may exist, each valid for exactly one purchasing organization. Maintained via Fiori apps Supplier Master or Maintain Business Partner, or BP. A complete vendor/supplier BP thus has three parts: general data, company code data, purchasing organization data.

Procurement cycle

1. Demand determination – a department reports a requirement (manually, e.g. purchase requisition/order).
2. Source of supply determination – RFQs, quotations, existing POs and conditions.
3. Supplier selection – price comparison of quotations; automatic rejection letters.
4. Purchase order handling – guided PO entry (Fiori app Manage Purchase Orders; screen areas: document type and vendor, header, item overview, item details).
5. PO monitoring – status tracking (goods/invoice received?), reminders/dunning of suppliers.
6. Goods receipt – quantity checked against PO.
7. Invoice verification – invoice checked for content and accounting correctness.
8. Payment – usually in FI (payment program).

Three-way match and FI postings

Goods receipt and invoice receipt may occur in either order. The GR/IR clearing account ensures that for each invoice goods were received and vice versa; an open balance signals a mismatch to be analyzed at period end.

Lesson 4: Performing Accounts Payable Closing Operations

Carry out the AP-specific month- and year-end tasks: balance carry-forward, balance confirmations, foreign currency valuation of open vendor items and regrouping of payables.

Business example

At month/year end AP must send balance confirmations to vendors, revalue open foreign-currency items and – in certain countries – regroup payables by remaining term.

Structure of closing

Year-end activities are either legal requirements (demanded by authorities) or technical/organizational requirements (needed by the system or the accounting organization). The AP sequence:

1. At the start of the new fiscal year run the balance carry-forward in FI-GL; carrying forward the leading-ledger G/L accounts automatically carries forward vendor accounts too (a separate vendor carry-forward is optional).
2. Block the posting periods of the old year and open the special periods (13–16) for closing adjustments.
3. Confirm balances with selected vendors.
4. Valuate foreign-currency open items.
5. Regroup payables by remaining term (country-specific).
6. Close the special periods.

Balance confirmations

The program (F.18) produces for a freely chosen set of vendors: the confirmation letters with reply requests, a reconciliation list and a results table. Letters go to the vendors; replies are returned to a control center (audit department), which compares them with the reconciliation list and records the outcome in the results table.

Foreign currency valuation

Open items in foreign currency were translated at the posting-date rate; at closing the rate has usually changed, so the program (FAGL_FCV, Fiori Perform Foreign Currency Valuation) revalues them with the closing rate and stores the difference on the valuated items.

Because reconciliation accounts cannot be posted directly, the valuation uses an adjustment account shown in the same FSV item as the reconciliation account. A valuation method defines how items are valuated (e.g. lowest value principle vs. general principle, per country rules) and is assigned to a valuation area, which represents an accounting principle/valuation approach for closing.

Regrouping payables

Receivables and payables must be shown separately on the balance sheet, and in many countries payables must be grouped by remaining term. The regrouping program (FAGLF101) does three things: (1) regroups payables by remaining term (long-term portions to separate adjustment accounts), (2) reclassifies vendors with a debit balance to the receivables side, (3) corrects items whose reconciliation account was changed in the master record. All postings use adjustment accounts as offset and are reversed on the first day of the next period, because regroupings are irrelevant for daily business.

Unit 5: Accounts Receivable

Lesson 1: Maintaining Customer Master Records

Maintain customer master data through the SAP Business Partner in role FI Customer and understand how it mirrors the vendor structure learned in Unit 4.

Business example

A customer phones to announce a change of address; you update the address in the business partner's general data – once, for all company codes.

Structure of the customer BP

The structure is identical to the vendor side (Unit 4, Lesson 1); only the role differs:

Customer/Vendor Integration

AR technically still works with its own customer master tables integrated in every posting transaction. CVI synchronizes the BP to the customer account in the background according to the synchronization control settings in Customizing. Details of this configuration belong to course S4F12.

Lesson 2: Managing Accounts Receivable Transactions

Enter miscellaneous customer invoices and credit memos directly in AR, and post incoming payments including the handling of payment differences via partial payments and residual items.

Business example

A customer complains that his last invoice lacked the usual 3% cash discount; SD confirms the error, so the invoice's payment terms are corrected. Separately, a payment advice announces that a customer will pay only 80% of an invoice because of an incomplete delivery; when the money arrives, the accountant posts the difference as a residual item.

Customer invoices and credit memos

Almost all customer invoices come from SD billing. Only when no sales order exists is an invoice entered directly in AR – via the Fiori app Create Outgoing Invoices or FB70; GUI-only entry is a thing of the past. The screen mirrors the AP invoice: work templates (screen variants, account assignment templates, held documents), header and customer data, G/L account items, and an information area with the balance, customer master link and open items. Foreign-currency documents are translated with the stored exchange rates.

Incoming payments

Posted with the Fiori app Post Incoming Payments (or F-28). Outcomes depend on the amount received:

Lesson 3: Managing Customer Correspondence

Run the dunning program, request and print correspondence such as account statements, and use the AR analytical Fiori apps for quick analysis.

Business example

Important customers want monthly account statements, produced by a periodic report (normally a background job, run online here for demonstration). Other customers are overdue and must be dunned.

Dunning functions

The dunning program analyzes all open items, identifies overdue ones and determines a dunning level based on days in arrears. The level drives dunning charges, interest and the dunning text. The dunning history records every notice issued; the date and level of the last dunning are stored both in the correspondence section of the master record and in the dunned documents. Dunning can be run for one account (individual notice) or for many accounts.

Dunning procedure

Dunning is controlled by the dunning procedure, which must be entered in each customer (or vendor) account to be dunned automatically; one-time accounts carry a procedure suited to one-time customers. Any number of procedures can be defined; SAP delivers standard ones as templates.

Dunning run (F150, Fiori Manage Dunning Runs)

1. Parameters – run date and ID, dunning date, documents posted up to, company codes and accounts; an existing run can serve as template.
2. Dunning run – accounts are selected, overdue items found, need for notices checked, dunning levels assigned; everything is stored in the dunning proposal.
3. Edit proposal – change, delete and recreate as often as required (e.g. block an item or account).
4. Print – notices are printed and, in the same step, dunning data (dates, levels) updated in master records and documents. The proposal step is optional: with "dunning print with scheduling" the notices are printed immediately.

Correspondence types

Day-to-day correspondence must be requested before printing. Requests arise:

• automatically from certain transactions (payment differences → payment notice; bill of exchange charges → charges statement);
• manually by the clerk;
• via a mass request program (periodic account statements, internal documents, standard letters).

Requests are stored in a correspondence request table and printed by a trigger program (F.61/F.64; periodic statements F.27).

Analytical apps for AR

Role-based, real-time KPIs rendered in the browser directly from SAP HANA: Overdue Receivables, Dunning Level Distribution, Days Beyond Terms, Open Disputes, Total Receivables. They combine HANA's analytical power with the S/4HANA integration layer and allow drill-down into the underlying items.

Lesson 4: Creating Accounts Receivable Dispute Cases

Explain why SAP Dispute Management exists, how it integrates with AR processes, and how to create and manage dispute cases with the Fiori app.

Business example

A customer paid an invoice only partially because the delivery was incomplete; the AR accountant creates a dispute case to start the clarification process.

Why dispute management?

Dispute management (part of Financial Supply Chain Management) covers the stage between invoice and payment in the chain purchase order → delivery → invoice → payment. Problems it addresses:

• Reduced or missing payments increase Days Sales Outstanding (DSO) – the average number of days customers take to pay, based on annual sales.
• Deductions invalidate the net value date used in cash-flow forecasting.
• Manual dispute resolution is costly, and the volume is rising.
• Disputes reveal customer relationship or internal quality problems.

Disputes surface in many ways: the customer reports actively (complaints department, account manager, accounting), pays short, delays payment; or AR discovers a payment difference while posting or an overdue item during account maintenance.

Process integration

• Dispute functions (create, display, edit cases) are embedded in FI transactions – e.g. a case can be created directly while posting an incoming payment with a difference.
• Certain FI transactions (payments, clearing) update the dispute case automatically.
• Actions in dispute management update the disputed items in FI.

Fiori app Manage Dispute Cases

A transactional app for analyzing and processing receivables-related disputes, typically created when a customer reduces a payment without agreement. It lets you search and filter cases, view details (notes, linked invoices), edit attributes such as the processor, add text notes and attach files – structuring the investigation and sharing results with everyone involved.

Lesson 5: Managing the Integration between AR and Sales Order Management

Understand the SD organizational structure, the sales area data of the customer, the order-to-cash document chain, and which steps generate accounting documents.

Business example

Sales organization 1010 receives an order from customer T-C##. On the delivery date an outbound delivery is created, the goods are picked, goods issue is posted and the customer is billed.

SD organizational units

Before a sales area can do business with a customer, the BP needs sales area data (role Customer) holding the conditions and payment terms agreed with that sales area – the SD counterpart of the company code segment.

Sales process overview

1. Pre-sales: customer inquiry → quotation.
2. Order processing: sales order (at distribution chain level; items may belong to different divisions). No FI posting; the system runs an availability check for the requested date.
3. Procurement: supplier of the goods determined from stored data.
4. Shipping: outbound delivery document; picking via a transfer order (warehouse management); goods issue – creates a material document and an FI document: debit cost of goods sold, credit inventory. Billing is possible only after goods issue.
5. Billing: billing document and printed invoice; FI document posts debit customer (receivable), credit revenue.
6. Payment processing: open items checked and incoming payments posted in FI.

The document flow displays all related documents of a process. Fiori app Create Sales Order has header data, header combined with item overview, and item details.

Predictive accounting

A development focus in S/4HANA: forecasting future revenue and cost (even a forecast P&L) from expected values such as open sales orders. Predictive postings live in dedicated ledgers, so reporting always distinguishes actual (realized) from predicted values.

Lesson 6: Performing Accounts Receivable Closing Operations

Carry out AR period-end tasks, focusing on individual and flat-rate value adjustments for doubtful receivables with the valuation program.

Business example

Each month-end the recoverability of receivables is assessed and bad debt expense is posted; the estimate is refined with a value adjustment key and, because it serves reporting, reversed at the start of the next month. At year-end a permanent estimate is made.

AR closing sequence

1. Balance carry-forward run centrally in FI-GL; carrying forward the leading ledger automatically carries forward customer accounts (separate run optional).
2. Block old posting periods, open special periods.
3. Balance confirmations (F.17) – as in AP.
4. Foreign currency valuation – as in AP.
5. Value adjustments for overdue receivables (AR-specific).
6. Regrouping into short- and long-term receivables – as in AP.
7. Close special periods.

Three ways to adjust receivables

IVA at year-end: doubtful debts are written down via the special G/L method because the transaction is visible on the customer account yet posted to a separate G/L account. Once the debt proves irrecoverable or is paid, the IVA is reversed; an irrecoverable receivable is cleared from the customer account against "depreciation of receivables", with the sales tax adjusted.

The valuation program (F107)

Works like the dunning and payment programs; each run is identified by run date and identification.

1. Parameters – valuation method, valuation area, posting specifications; an earlier run can be the template.
2. Valuation run – analyzes the selected accounts/documents and builds an editable valuation proposal. Values come either from IVAs entered manually in the documents earlier, or from the value adjustment key in the customer master: a percentage of the overdue amount depending on the days overdue. Several keys allow weaker customers to be written down more aggressively than strong ones.
3. Transfer – G/L documents post the valuation (debit reserve for bad debt expense, credit value adjustment to receivables) and the valuation is recorded in the valuated documents for traceability. If the posting fails, the batch input session "F107–<run name>" can be processed.

Notes: with several accounting principles the differing results are posted to separate accounts picked up by different FSVs; the run can also discount open receivables to net present value where national law requires it.

Unit 6: Asset Accounting

Lesson 1: Maintaining Asset Master Records

Explain the asset master record, its assignment to organizational units, the controlling role of the asset class, and how depreciation areas and the chart of depreciation drive valuation and G/L posting.

Business example

The company groups its assets by asset class and buys a new building near Hamburg with a planned useful life of 50 years; an asset master record must be created for it.

What is an asset?

An object, right or item owned by the enterprise, intended for long-term use and individually identifiable in the balance sheet. Every asset belongs to exactly one company code, where all its postings (acquisition, retirement, depreciation…) are made. Additionally it can be assigned to a business area, profit center, segment and to CO objects such as a cost center, internal order or WBS element – these receive the depreciation.

Asset class – the main classification criterion

Each asset must belong to one asset class. The class supplies control parameters and default values for depreciation and master data. Assigned to the class are:

Assets that appear in different balance sheet lines (buildings vs. machinery) belong to different classes with different account determinations. There is at least one special class for assets under construction and one for low-value assets; classes for intangible and leased assets (with leasing functions) are also possible. Note the component split: technical asset management is Plant Maintenance (PM); financial assets are handled in Treasury (TR).

Depreciation areas and chart of depreciation

Assets must be valued differently for different purposes – commercial/book, tax, group (IFRS), cost accounting. Each view is a depreciation area; the areas needed for a country or economic region are grouped in a chart of depreciation. How an area reaches the G/L is set in Customizing:

Depreciation itself is always posted periodically by the depreciation run, never in real time.

Subnumbers and group assets

• Asset subnumbers structure components of an asset (e.g. later additions). The main asset always has subnumber 0000; further subnumbers are assigned as desired.
• Group assets have their own master record; several main assets are assigned to one group asset and depreciation is calculated at group level. Important in the US, rarely used in Europe.

Lesson 2: Executing Asset Transactions

Post asset acquisitions in the different possible ways, understand transaction types and the technical clearing account for integrated acquisitions, and analyze asset values with the Asset Explorer and the Fiori asset apps.

Business example

The FI-AA team tests integrated and non-integrated acquisition postings; such postings can be entered both in the asset accounting department and in AP.

Transaction types

Asset postings use posting keys 70 (debit) and 75 (credit), but each asset line additionally needs a transaction type. It classifies the business transaction and determines where the amount appears in the asset history sheet. Examples: external acquisition (100), acquisition from in-house production, credit memo, adjustment, retirement without revenue, depreciation and write-up.

Ways to post an acquisition

Technical clearing account for integrated acquisitions (S/4HANA)

An integrated acquisition is split into an operational part and valuating parts:

1. Operational part (the vendor invoice): one document valid for all accounting principles – vendor against the technical clearing account for integrated asset acquisitions.
2. Valuating part (capitalization): one document per accounting principle – asset against the same technical clearing account.

Result: the technical clearing account always balances to zero per accounting principle and account assignment object; to guarantee this, manual postings to it are blocked. This design is what allows the ledger approach to capitalize different amounts under different principles from one invoice.

Asset Explorer (AW01N) and app Asset Value

One-stop overview of an asset: all posted transactions, planned and posted depreciation per depreciation area, period and fiscal year, depreciation parameters, and the accounting documents behind each transaction. You can switch to another asset without leaving the screen. The Fiori app Asset Value shows the same information.

Fiori apps for asset management

Lesson 3: Executing Asset Accounting Period-End Closing Activities

Describe the FI-AA closing tasks: fiscal year change, depreciation posting run, year-end closing program and the asset history sheet.

Business example

At month/year end the company posts depreciation and produces asset reports, including the asset history sheet.

Two kinds of closing work

As in AP/AR: legal requirements (government mandates) and technical/organizational tasks (preparatory steps).

Year change vs. year-end closing

Depreciation posting run

Program FAA_DEPRECIATION_POST (AFAB, Fiori Post Depreciation) posts the value adjustments (depreciation) and interest to the G/L. It can be run for several company codes and accounting principles. Ordinary, special and unplanned depreciation are first calculated and kept as planned values in FI-AA; only the run makes them visible in the G/L accounts and financial statements. Depreciation can also be transferred to CO objects assigned in the asset master (cost center, internal order, WBS element) – usually the values of depreciation area 20 (cost accounting).

Asset history sheet

The most important FI-AA closing report. Legally required in Germany, useful everywhere, it reconciles the development of asset values during the year. Its structure is country-specific and many versions can be defined. Each version groups values into:

• Book values at the beginning of the fiscal year
• Acquisitions
• Retirements
• Adjustment postings (transfers)
• Depreciation
• Book values at the end of the fiscal year

The transaction type on each posting decides the column/row where it appears (Lesson 2).

Unit 7: Bank Accounting

Lesson 1: Maintaining Bank Accounting Master Records

Distinguish banks in the bank directory from house banks, understand Bank Relationship Management, and know how house bank accounts are connected to the general ledger.

Business example

UNI-Bank has been taken over by Interbank and announces a name change, which must be recorded. A customer phones in new bank details, to be stored in the customer master.

Bank master data – app Manage Banks

The Manage Banks app (classic FI01–FI03) displays, creates and changes the banks used by the company, its customers and suppliers. A bank is identified by bank country + bank key; name and address are stored in the bank directory. When you enter bank details in a BP master record you only type country and key, and the directory supplies the rest. A bank that does not exist yet can be created in Manage Banks, or entered directly while maintaining the BP – it is then added to the directory automatically.

Bank Relationship Management (BRM)

Part of SAP S/4HANA Cash Management (full scope) or the basic Cash and Liquidity Management, depending on licence. Cash managers and bank accountants centrally manage bank accounts with:

• bank account master data and a table view of banks and accounts;
• workflows for opening, changing and closing bank accounts, and for periodic review – so subsidiaries no longer reconcile account changes manually and information is always harmonized.

Views: the Bank Hierarchy (banks as organization BPs in role Bank TR0703, structured by bank groups), the Account List (sort, group, filter by column), and user-defined views based on bank account groups.

House banks and account IDs

A house bank is a bank at which the company code holds accounts. Each house bank gets a house bank ID and each account an account ID (up to four alphanumeric characters each). For payment processing every house bank account must be linked to a G/L account – in one of two ways:

Because the method is chosen per house bank account in its master data, both approaches can coexist; customers can migrate gradually without a big-bang conversion.

Lesson 2: Managing Bank Accounting Transactions

Use the cash journal for petty cash, process incoming checks via check deposit list (Germany) or lockbox (USA), and import and post-process electronic bank statements.

Business example

Petty cash is tracked online in cash journals. Incoming checks are handled differently by country: company code 1010 (Germany) receives checks from customers and forwards them to the bank with a deposit list; company code 1710 (USA) uses the house bank's lockbox service and receives lockbox files.

Cash journal (FBCJ)

• Identified by a four-character code; each journal is assigned to exactly one G/L account (the petty cash account).
• Transactions are stored in the journal and transferred to the G/L periodically (e.g. daily); the transferred entries can be printed as a journal and a receipt can be printed per transaction.
• Screen sections: data selection (period), balance display (receipts, payments, opening and closing balance), accounting transactions split into cash payments, cash receipts and check receipts.
• Business transaction types with pre-set offsetting account and tax code are defined in Customizing but can also be added from the application, e.g. "office supplies" as an expense posting against the office material account.

A cash payment credits the cash journal account; a receipt debits it. General rule: bank payments are never posted directly to the bank account but to bank clearing accounts, which are cleared when the bank statement is processed.

Incoming checks – two country procedures

Depositing checks (FF68)

1. Enter the checks manually or with a check scanner.
2. Display the list of checks to be deposited and correct it if needed.
3. Print the deposit list and send it with the checks to the bank.
4. Create the postings via two batch input sessions, or
5. post directly using the post-processing transaction without a session.

The two sessions:

Lockbox: if the system cannot identify an invoice from the lockbox data, the item is handled afterwards with the Post Processing function.

Electronic bank statement

On import, several programs read the statement, assign each item to a posting rule and look for clearing information. A clear match clears the customer open item and posts bank, bank sub-account and customer in one go. Items without a match become exceptions for post-processing. A customer transfer is posted in two steps:

1. Posting area 1 (bank accounting): debit bank account, credit bank sub-account.
2. Posting area 2 (sub-ledger): debit bank sub-account, credit customer – clearing the invoice.

Fiori app Reprocess Bank Statement Items: reprocess an item, mark it reprocessed with a reason, add attachments, assign and clear payments on customer/supplier/G/L accounts, post payments, confirm company-initiated payments (checks, transfers), define own reprocessing rules and automate them to run during import.

Unit 8: Closing Operations in General Ledger Accounting

Lesson 1: Performing General Ledger Closing Operations

Perform the general ledger closing after the sub-ledgers are closed: control the process with the Financial Closing Cockpit, post accrual/deferral documents, use ledger groups for ledger-specific postings, analyze the GR/IR account and run the financial statements and analytics.

Business example

Every company code must produce year-end financial statements according to its national rules. The company controls the closing with the Financial Closing Cockpit, closes the sub-ledgers (AP, AR, AA, Bank) first and then the G/L, in the order SAP recommends.

G/L closing sequence

1. Start of new year: balance carry-forward of G/L account balances.
2. Block old posting periods, open the special periods.
3. Technical reconciliation of transaction figures vs. documents to prove there are no technical posting errors.
4. Foreign currency valuation of G/L items (balances and open items).
5. Post accrual/deferral documents.
6. Analyze and regroup the GR/IR clearing account.
7. Close the special periods.
8. Documentation: balance audit trail, financial statements and additional legal reports.

SAP S/4HANA Financial Closing Cockpit (FCC)

A structured interface for executing the transactions and programs of a complex process such as the financial close, organized on organizational levels (typically controlling area / company code). Its capabilities fall into three groups:

Accruals and deferrals

Revenues and expenses posted in one period often belong economically to another and must be spread over the periods in which they are incurred. At year-end the IDES companies create accruals that are typically reversed at the start of the next month.

SAP S/4HANA Accruals Management (Accrual Engine)

Calculates, reviews and posts accruals automatically. Users work with the application components Manual Accruals (contract-like data) and Purchase Order Accruals (automatic calculation and posting of PO accruals, optionally with a monthly review/approval workflow) – never with the engine directly, "like driving a car without touching the engine". Optimized for S/4HANA:

• Fully integrated in the G/L: all G/L currencies, postings stored only as Universal Journal line items in ACDOCA, fiscal year variants of the ledgers supported, standard FI reversal (FB08, F.80) works.
• Complex postings with more than two lines via customer-defined posting schemas.

Deferral example (insurance invoice of EUR 120 at the start of the year):

1. Invoice posted in period 1: expense / vendor.
2. Opening posting moves the full amount to the deferral account: prepayments and accrued income / expense.
3. At each period-end a prorated share returns: expense / prepayments and accrued income (EUR 10 per month).
4. If the contract ends early, the whole residual is expensed: expense / prepayments and accrued income.

Manual accruals process: (1) maintain time-dependent basis data – accrual objects holding everything needed for the postings; (2) start the periodic accrual run – the engine selects the objects, reads ACDOCA to see what has already been posted for each item, and posts the differences as regular FI documents.

Ledger groups and extension ledgers

By default a document updates all ledgers. The Ledger Group field on the posting (e.g. Fiori Post General Journal Entries, FB50L) restricts it to selected ledgers or one ledger – needed for valuation differences between IFRS and local GAAP. Additional ledgers are defined in Customizing; each ledger automatically gets a ledger group of its own, and ledgers with similar behaviour can be combined in further groups so that one document suffices.

An extension ledger is a special parallel ledger that stores only delta values on top of an underlying (base) ledger; reporting on it always includes the base ledger data. Several extension ledgers may point to the same base ledger. Typical use: a management view that differs from the legal view (adjustments, reclassifications). Benefits:

• Small data footprint – only deltas are stored.
• Less reconciliation – only manual delta postings (standard journal entries) live in the extension ledger.
• Stored in the Universal Journal with the same reporting options as main ledgers.
• Own posting period variant – can be opened/closed independently of legal accounting.

GR/IR clearing account analysis

Each goods receipt and invoice receipt posts to the GR/IR account; when quantities and prices match, the items clear automatically. Items stay open when a GR or IR is missing, amounts differ, the PO used an outdated price, or delivery costs hit the wrong GR/IR account. The GR/IR reconciliation process is exception handling at PO-item level, supported by the apps Reconcile GR/IR Accounts and Monitor GR/IR Account Reconciliation, which help the G/L accountant, buyer and warehouse staff find root causes quickly and take the right steps.

At period end the balance is normally not zero and must be shown correctly in the balance sheet:

The regrouping program (F.19) posts these reclassifications via a correction (adjustment) account and reverses them on the first day of the next period, because they would distort daily figures. GR/IR account and correction account are sometimes shown only in the notes. Country rules differ – in the US, goods received but not invoiced must be recorded, whereas invoices without goods create no legal liability.

SAP S/4HANA embedded analytics

Analytics run on the same technical stack and UI as the transactions, inside the business process, lowering TCO and making users more efficient. The simplified data model (fewer tables, less redundancy) leaves room for longer history and eases building Virtual Data Models. Architecture: Core Data Services (CDS) views are developed in the ABAP layer and form the Virtual Data Model (VDM) on top of transactional and master data tables; the system generates SQL runtime views so that reading and transforming happens in the HANA database layer. Three user roles: the IT user (develops CDS views, apps, planning functions), the analytics key user (queries, predefined reports, KPIs, dashboard tiles) and the analytics end user (consumes and acts).

SAP Analytics Cloud (SAC)

• Self-service BI on SAP HANA Cloud Platform combining business intelligence, planning and predictive functions in one SaaS product hosted and updated by SAP; can work independently of other SAP applications.
• Planning: financial and operating plans on one linked platform. Predictive: machine learning insights and modelling of future scenarios.
• Connectivity: with S/4HANA on-premise, SAC is opened in the browser and reaches company data via a reverse proxy (live connection – data stays on premise); non-HANA sources are replicated to the cloud.
• Delivered financial business content: stories and a Digital Boardroom built on S/4HANA live connectivity, reading CDS views whose KPIs are defined by semantic tags; shows the current and previous year in real time with KPIs grouped by Growth, Profitability and Liquidity – plug-in content usable out of the box.