Computerised Accounting

This article provides an overview of computerised accounting and its importance in business operations. It discusses the evolution of SAP S/4HANA Finance and the differences between SAP ERP FICO and SAP S/4HANA Finance. The article also highlights the benefits of SAP S/4HANA Finance for businesses and presents case studies of companies that have migrated to this system.

Running head: COMPUTERISED ACCOUNTING
Computerised Accounting
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COMPUTERISED ACCOUNTING
Introduction:
In the current era, majority of the business organisations have formulated strategies in
order to maintain their productivity and market relevance when it comes to their main operations.
There are various factors in an organisation, which have impact on its performance level. On the
contrary, one of the significant factors of any organisation is the financial aspect that plays a
pivotal role in general business operations. It is imperative for the financial aspect as a
significant factor, since it attracts the potential investors because the overall decisions are
affected coming to investments (Appiah et al. 2014). Moreover, it is not sound to underestimate
the importance of finances in any business organisation. The finance departments in different
organisations are needed to conduct the task of assuring the presence of financial health in all
business operations.
The technological trends have transformed the way of performing the accounting and
management functions. In this context, one notable trend could be identified as SAP S/4HANA
Finance in order to conduct management and financial functions (Bardhan et al. 2017).
Depending on this, it is necessary to concentrate through the evolution of SAP S/4HANA
Finance, the differences persisting between SAP ERP FICO and SAP S/4HANA Finance and
advantages. Finally, the essay would cover the case studies for representing the ways through
which organisations have shifted to SAP S/4HANA Finance in their transactional services.
Overview of SAP S/4HANA Finance:
The introduction of SAP into the market has been made in the year 1972; however, the
initial product has been made as R/1 and the design was in relation to the one-tier system. On the
other hand, there was need of three layers for the ERP software to be incorporated on a single

COMPUTERISED ACCOUNTING
server system. During the year 1979, there was introduction of the next version (R/2) having
three layers and it could be fitted in two servers. In addition, SAP has produced R3 as the final
version, in which the design was utilising a three server set. It has been identified that the users
could use R/3 easily because SAP GUI was released (Burns 2018). The other significant aspect
inherent in SAP R/3 was processing of IDOC/ALE allowing SAP and other system flow like
SAP and non-SAP. In 1992, SAP R/3 was launched, which was deemed to be a technological
advancement from R/1 and R/2.
Nevertheless, small modifications were carried out in the system, particularly after the
tier version. The modifications were made to the design completely by SAP and the ERP Central
Component (ECC) was initiated in 2004. As a result, complete change could be observed in the
architectural design of ASAP by the central component of ERP (D. Carnegie 2014). With the
help of ECC, the users could be able to carry out business operations in the strategic enterprise
management within shorter timeframe. It was taken into account that the initial SAP solution was
utilised in an organisational environment and it was diversified to the applications used in an
organisation as well as internet services. It was inherent from the period R/3 was formed in 2012,
it was deemed to be the most innovative product.
On the other hand, change could be observed with the initiation of HANA that attracted
majority of the people towards its application in their work areas. According to Densborn et al.
(2017), it is found that even majority of the people has embraced the usage of HANA in
managing their organisations; most of them have no idea regarding the variation between
S/4HANA and SAP S/4HANA Finance. The HANA system has enhanced the performance of
numerous organisations resulting in popularity among users and business owners. S/4HANA is a
new kind to set business operations, which is referred as S4/HANA Enterprise Management,

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while the S/4HANA Finance could be defined as an application, which is designed for managing
the organisation currently in financial accounting (Hilker, Awan & Delvat 2018).
SAP/4HANA has two separate editions, which include the S/4HANA On-Premises and
S/4HANA Cloud. It is crucial to obtain an overview that the users are enabled by SAP
S/4HANA Finance in using the SAP software on the cloud, which represents that it is not
compulsory with the maintenance of application. There could be variations in the product
lifecycle for all editions (Jolton & Eisbart 2017). On the other hand, it is necessary to liberate
SAP S/4HANA On-Premises annually; however, it receives few rectifications as well as
additional roles as Feature Pack or Service Pack Stacks quarterly. On the contrary, SAP
S/4HANA Cloud is liberated quarterly, generally after three months owing to the presence of a
new system in the market. By taking this into consideration, the intertwined analysis in SAP
S/4HANA Finance eradicates the requirement of having different information related to
warehousing operations along with the requirement of copying data as with the past system
(Laing & Perrin 2018).
Difference between SAP S/4HANA Finance and current SAP ERP FICO:
Another crucial operational aspect is SAP FICO that lies within the SAP ERP’s primary
components, which allows the organisation in managing the entire financial information. By
using SAP FICO, it becomes possible for an organisation in developing and managing financial
information for evaluation and relay. In addition, by using the system, the organisation could
ensure sound design system and process of decision-making (Missbach et al. 2016). SAP FICO
contains two modules, which include SAP Finance (F1) ad SAP Controlling (CO), which are
utilised for provided financial operations. The SAP F1 manages general financial accounting and

COMPUTERISED ACCOUNTING
reporting, whereas SAP CO is involved in cost planning and monitoring. The SAP CO and F1
have been initiated originally in the form of a different module; however, integration has been
made later on so that majority of the users would perceive the same as a single module. Different
sub-modules could be seen in SAP F1 module that manages specific accounting functions along
with enabling the companies to form statements for evaluation and analysis and it is crucial in
terms of business productivity ((Nieuwenhuis, Ehrenhard & Prause 2018). In addition, SAP CO
is involved in promoting operations that include designing, reporting and monitoring costs from
crucial functions.
However, the applications of SAP $/4HANA Finance are placed on the ERP framework
of SAP S/4HANA. This includes a series of financial planning as well as roles of coordination,
which are inter-associated along with offering new information from the utilisation of ERP. SAP
S/4HANA Finance is a part of S/4HANA and it is designed on SAP HANA within the site of
memory storage. Linkage could be observed between operations and cross-organisational roles
via S/4HANA along with placing them together with the transactional processes. SAP S/4HANA
Finance is created with the intent of eradicating the insights by using varying degrees of financial
information. The financial experts and professionals apply SAP S/4HANA Finance in different
industries. In addition, it is possible to adopt SAP S/4HANA Finance in the cloud or on-premise;
hence, providing alternatives for the system users (Pedell et al. 2017). Besides, the usability of
SAP S/4HANA Finance could be adopted either as self-contained product or combined
depending on the needs of the organisation or proclivity of the customers.
Benefits of SAP S/4HANA Finance for businesses:

COMPUTERISED ACCOUNTING
Various benefits are observed to be linked with the usage of SAP S/4HANA Finance
within a business organisation. Majority of the business organisations are implementing the
usage of SAP S/4HANA Finance, which validates to lead different organisations in the correct
directions. In terms of initiation, it allows an organisation in migrating from the past lengthy
batch-based operations to real-time operations. As a result, the organisations are enabled to
conduct their financial costing in a sound manner and at the right time. Depending on this, it is
not needed for the organisation to devote additional time in undertaking decisions. This is due to
the presence of data and the application made by the managers to undertake significant decisions
within an organisation (Plattner & Leukert 2016). Moreover, SAP S/4HANA Finance has earned
global recognition in terms of financial operations and coordination, which represents that the
financial applications have retrieval to equivalent information to be updated in the long-term.
This makes easy access of information for all individuals within an organisation and hence, the
finances could be monitored easily.
SAP S/4HANA Finance eradicated data lay-offs, which represents that there is absence
of information replication. It becomes easy for the management in locating and follow-up with
the cash movements on the part of the contributors. This would provide greater degree insights
owing to the applications at line item level. The firms are able to move from fixed planning made
yearly to existing dynamic planning. SAP S/4HANA Finance provides overview such as
predictive, actual and historical data (Quinn & Kristandl 2014). Therefore, the users could have
an overview of the patterns inherent in data along with undertaking informed decision in relation
to the existing data. The organisations utilising the system could match their invoices and
payments by using the process of machine learning so that they could offer predictive and
automated insights. Besides this, at the time the organisations intends to move, it has to ensure

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seamless shifts. The non-disruptive replacements for the users having moving custom operations
allow the usual continuance of operations (Riesner & Sauer 2017).
In addition, SAP S/4HANA Finance has centralised finance implying that the aspects like
monetary aspects are managed by the management. It becomes possible for the users in applying
the SAP S/4HANA Finance in a distributed service framework resulting in immediate
duplication of data. There are different choices for the organisations depending on the utilisation
of SAP S/4HANA Finance. There is a choice for the system in either using the cloud or on-
premise hybrid in relation to their needs (Salmon & Wild 2016). On the other hand, the
knowledge of the users would stay the same regardless of the deployment method chosen by the
organisation. As a result, they could enjoy the consistency, which is perceived to be significant.
Case studies of companies and the issues they faced migrating to SAP S/4HANA Finance:
There are certain instances of global business organisations available, in which issues are
faced while migrating to SAP S/4HANA Finance. The first case study that is selected is the case
of The Cathay Pacific Airways. The airline intended to enhance procurement and finance
operations within the systems. Therefore, it took the assistance of a professional for obtaining
ideas in the transition process from its existing system to SAP S/4HANA Finance. Therefore, the
most suitable outsource organisation was identified as Capgemini. As a result, the outsourced
organisation was committed to procurement and improvement roles (Capgemini.com 2019). The
airline has different routes operating within 190 global countries. However, increase in the prices
of fuel and current risks imply that the organisation is needed to acquire more profits for used
capital.

COMPUTERISED ACCOUNTING
By taking this consideration, the airline desired to get rid of the existing legacy system by
using improved technologies. By using purchase and finance roles, the firm started a system
called Horizon 8, which needs to have four systems implemented with the modules of SAP
(Salmon et al. 2016). The known trucks include flight-to-settle, source-to-pay and flight-to-settle.
With the help of budget-to-monitor, it is possible to conduct system-based organising and
budgeting on the utilisation of indirect operational costs. The improvised solutions were to help
the organisation to push for transparent data, progressing transactional operations and providing
existing information for undertaking decisions.
The framework used by Capgemini was deemed to be collective, in which it was tasked
with the technology staffs of the Cathay Pacific Airways. In addition, Capgemini managed
operations from the past solution of SAP ECC6; however, it was changed in the long-term. The
importance of the task was to assist the organisation in acquiring a better insight of direct and
indirect expenses along with aiding in a fall of its general expenses. Furthermore, the airline
would manage variation in purchase throughout operating costs and different aspects of indirect
expenses (Singh 2017).
The implementation of SAP S/4HANA was compelled for the significant benefits to the
airline. In the initial stage, it intended to enhance its purchase and finance operations, enabling
planning and budgeting based on drivers, timely cost collection of direct operating expenses,
adoption of indirect operating expenses to allow route productivity reporting and procurement
management of complexities. It is necessary that the faults encountered by the airline were
mainly in relation to finances and time (Ware 2015). The reason is that the airline has learned the
complexities including the process of transition along with seeking the services of the
outsourcing organisation.

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The second study is related to Fitch Ratings. This is a global agency, which is involved
in managing the analysis whether the creditworthiness of the issuers in various fixed securities in
public as well as private sectors are evident or not. In progressing the effectiveness, accuracy and
flexibility in the evaluation of provision, the agency decided to transfer over to the Excel
Spreadsheet along with tending to apply SAP S/4HANA Finance formulated on the cloud (SAP
and ASUG 2019). The employees of the organisation at the moment could provide allocation
comfortably in contrast to the big duration undertaken in the past.
On the contrary, some faults were confronted before SAP S/4HANA Finance was
installed. The application of allotment framework would be made once in a quarter, instead of
monthly requirement. In addition, the conventional framework was prone to faults and it could
needed bigger timeline, since the conduction was made manually on the software. The duration
in framework transformation each time a modification is made to a business driver was
challenging. The files were not secure and they included audit information. The challenges
occurred at the time of integration of forces because of the geographical changes in offices. For
example, the New York offices would not be able to share information with other countries like
London. It is not possible to carry out sound data analysis (Suse.com 2019).
The benefits associated with the implementation of SAP S/4HANA Finance included
productive time undertaken in marketing owing to the design of solutions in weeks in contrast to
months like in the last settings. The staffs within the finance team of the agency are motivated
and they possess the ability to create, develop and modify instant allocations. The cloud system
implementation facilitated the entire process; thereby, resulting in waste of time in procurements
along with providing the steps and up-front spending to be utilised in the process.

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The third case study is associated with Deloitte. Deloitte is known to be the first
organisation, which enforced the utilisation of SAP within its system. The initiation was made by
the organisation by using SAP R/3 although the formulation was not made for professional
application by the organisation (Burns 2018). However, the enterprise was committed to obtain
the best from the system and finally, it ended up with system customisation. It compelled the
organisation to carry out more customisation of SAP over the previous years. The customisations
represented that Deloitte undertook some faulty decisions in terms of selecting S/4HANA, which
matched its business requirements and design. However, it is noteworthy to mention that when
the organisation was enforcing the SAP application, there was absence of advanced version. It is
crucial that various customisations resulted in different faults pulling the firm behind (Deloitte
2019).
The issues confronted by the organisation by using R/3 were related to maintenance. It
was a big challenge coming to maintenance owing to the increased customisations. As a result,
the overall maintenance cost has increased considerably. In addition, there was absence of any
flexibility given for the customisations that could be obtained from the systems. The organisation
aimed to improve for eradicating the issues it was confronting by utilising R/3. The objective of
the firm was to have SAP S/4HANA Finance, which would assist with significant financial
operations (Densborn et al. 2017). There would be improvement in significant financial
operations that provides the organisation with current perceptions and information on the
financial accomplishments.
The organisation is obtaining considerable benefits by applying SAP S/4HANA Finance.
It is making international advancements, which imply that the difficulties of financial operations
of the business are advancing the reasons as well for driving the organisation to search for new

COMPUTERISED ACCOUNTING
solutions to the issues. In addition, the organisation chose SAP S/4HANA Finance for getting rid
of the aspects as well as real-time closure. In the past, the organisation was driven for running
soft closes that reveals that it was getting down the operations within the organisation. At
present, the organisation could utilise soft closes in every few hours providing the CEO and the
role owners with sound perception depending on finance issues (Missbach et al. 2016).
From the organisational perspective, Deloitte has devoted its resources and time for
enhancing efficiency and accomplishment. The enforcement of SAP S/4HANA Finance allowed
the organisation in minimising normal labour-intensive operations. The result in operating
expense stability could be observed owing to the simplicity of infrastructure. There has been rise
in profit levels as well owing to the enhanced visibility of different revenue streams of the
organisation. The entire management needs to undertake sound decisions depending on the funds
of the firm (Bardhan et al. 2017). The implementation of SAP S/4HANA Finance was enhancing
business operations as portion of the roles of the system like progress of different tasks for
facilitation of accounting operations.
Conclusion:
From the above analysis, it is necessary to state that SAP S/4HANA, particularly finance,
plays a pivotal part in organisational performance. SAP S/4HANA has the goal of enhancing
financial operations in relation to productivity and efficiency. It is crucial that different
organisations are observed to seek the implementation of SAP within their systems. On the other
hand, another crucial factor originating from the paper is that SAP S/4HANA Finance could be
used in combination with other modules for ensuring the efficiency and productivity of
organisations. It has been found further that SAP S/4HANA has revealed its abilities or

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usefulness in contrast to SAP ERP FICO. The variations found from the two systems reveal the
technological change transforming the way of conducting financial accounting. Therefore, SAP
S/4HANA Finance is deemed to be a vital influential dynamic for majority of the business
organisations.

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