Computerized Accounting in ERP Systems

Running Head: COMPUTERIZED ACCOUNTING IN ERP SYSTEMS
COMPUTERIZED ACCOUNTING IN ERP SYSTEMS
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COMPUTARISED ACCOUNTING IN ERP SYSTEMS1
Executive Summary
Evolving technology and digitization makes every process easy in life. Moreover, with evolution
of technology there are changes in business models and the traditional ways of doing a business
process. The introduction of new systems help in better collection and organization of data.
Better insights about the collected data can also be acquired to study the market trends and
customer behavior. ERP or Enterprise resource planning is an enterprise related software that
helps in managing the business processes. SAP ERP is a very famous and one of the most used
resource planning enterprise software across the globe and was developed by SAP SE, a German
company. This report will provide a detailed research and study of ERP systems along with SAP
S/4HANA Finance software. Some of the challenges or difficulties faced by organizations in
implementing the SAP S/4HANA Finance are as well deliberated through this report with
several case studies.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
SAP S/4HANA Finance History.................................................................................................4
SAP ERP FICO............................................................................................................................4
Difference between SAP S/4HANA and SAP ERP FICO..........................................................5
Advantages of using SAP S/4HANA Finance.............................................................................6
Case Studies of companies and the issues they faced migrating to SAP S/4HANA Finance.....8
Conclusion.....................................................................................................................................15

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Introduction
Advancement in technology also marks for the changes it brings with it. The huge data
flow over the internet is not useful until there is a proper way to collect and use it. Modernization
should be adapted by the organizations fast for better processing and evaluation of the
organizational data. Mainly, the aim of a business process is to accomplish a solid or fixed goal
by the stakeholders, through a number of steps (Hammer 2015). Business processes can be both
manual and automatic. Management of business process can be a huge challenge for most of the
organizations today. Business process management or BPM is a process for identifying and
improving the performance of an organization by means of various methods to automate the
business processes (Rosemann and vom Brocke 2015). If there is a lack of proper management
of these business processes then the organizations can face a lot of difficulties related to time
management, greater number of errors, data handling and might demoralize the employees. To
overcome these challenges, introduction of a proper and advanced system in the organization is
very important and for this reason ERP (Enterprise resource planning) applications comes into
action (Tarhini et al 2015).
ERP as stated earlier is a software to manage business processes efficiently and allows
organizations to automate many process (Hoch and Dulebohn 2013). The ERP includes
integration of various process like product planning, sales and marketing and also human
resource planning. The ERP software is a form of enterprise utility software that consist of
different modules which needs to be purchased individually (Seethamraju 2015). These modules
are used in some combination according to the requirements of the organization. The most
common ERP modules used by an organization are for product planning, controlling the

COMPUTARISED ACCOUNTING IN ERP SYSTEMS4
inventory and distribution of products, marketing and sales, finance management and HR
management (Hoch and Dulebohn 2013).
SAP ERP is a very popular ERP used across the world by many large scale organizations
(Sikka et al. 2013). The company that developed SAP ERP was a German company known as
SAP SE. In 2011, SAP HANA was launched that provided real time insights of the data. SAP
Business Suite launched by SAP, in 2013 was driven using SAP HANA that provided a single
platform for transactions and analytics (Brunel et al. 2015). Finally, in 2015 in the month of
February, SAP Business Suite 4 HANA (SAP S/4HANA) was introduced which is considered as
the most advanced ERP till date.
Discussion
SAP S/4HANA Finance History
SAP S/4HANA Finance is basically a financial application that is based upon SAP
S/4HANA ERP platform, previously recognized as SAP Simple Finance (Prassol 2015). The
interconnected array of financial management tasks deliver actual-time data and monitoring. The
SAP HANA platform is in existence ever since 2010. The programs developed by SAP like the
SAP ERP and SAP Business Suite used the database of SAP HANA to run. SAP S/4HANA
finance was brought into market in 2015, 3rd February at the New York Stock Exchange (Pedell
et al. 2017). There are two editions available in the market which are cloud and the other one on
premise. Sources reveal that by October 2015, the customer database of SAP S/4HANA was
1300 (May, Böhm and Lehner 2017).

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SAP ERP FICO
The financial and cost controlling module in SAP ERP is commonly known as SAP
FICO (Maier, Laumer and Weinert 2015). The FICO comprises of mainly two parts, where FI is
for Financial Accounting and CO means Controlling. Recording all the financial transactions and
producing them at the end of trading period is the main objective of SAP FICO (Blount et al.
2016). This module is implemented and is very important for a wide number of organization.
This module can cover almost all the business processes that an organization can encounter and
thus is a very robust module (Heinzelmann 2017).
Difference between SAP S/4HANA and SAP ERP FICO
SAP S/4HANA Finance SAP ERP FICO
1. Former name for SAP S/4HANA
Finance was SAP Simple Finance and the
term is no longer an official term. The part
of S/4 HANA suite that deals specifically
with Financial Management and their
solutions is well-known as SAP S/4HANA
Finance (Rudolf et al. 2013).
2. SAP S/4HANA enable a common view
of the financial data and this data is
consistent throughout the organization and
SAP S/4HANA minimizes reconciliation
efforts (Maheshwari 2017).
1. SAP FICO is basically a component of SAP
ERP that deals with Finance and Cost controlling
functions (Dhungana 2013). Here, FI stands for
Financial Accounting, CO stands for Controlling.
It is one of the most applied modules with SAP.
2. SAP FI is made up of sub modules and the
most common sub modules that are used are
account payables, general ledger accounting,
bank accounting, asset accounting and account
receivables (Gaikwad and Bharathi 2018).
Everything is interlinked and integrated in real
time.