Computerized Accounting Systems (PDF)

COMPUTERIZED
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Historical Overview of SAP S/4 HANA Finance.......................................................................1
Difference between SAP S/4 HANA finance and Current SAP ERP FICO..............................4
Benefits of SAP S/4 HANA Finance for any business...............................................................5
Issues Faced in Migrating to SAP S/4 HANA Finance..............................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In the present world where Enterprise Resource Planning software plays an important
role, a German Company had provided SAP for data management programs. They have started
with single ERP's software and now they had updated there versions and providing the best ERP
solutions in the world. This project reports consists of an overview of SAP S/4 HANA Finance
about its working and implementation and benefits in business of any company. It provides
difference between older version of SAP FICO and SAP S/4 HANA had been discussed. There
had been taken two case studies of Metcash, who is a wholesaler of FMCG Products and BHP,
they work in extraction and processing of mineral resources, in which discussions had been made
regarding problems that are faced in migrating SAP S/4 HANA Finance.
Historical Overview of SAP S/4 HANA Finance
SAP is an Enterprise Resource Planning Software which enables any company for
capturing different opportunities in today's world of digitalization (Maheshwari, 2017). SAP
software removes obstacles that are associated with other ERP applications such as complexity,
batch latency and complex manual driven process. The software of SAP HANA is available from
2010, and different business suite of SAP are used to run SAP HANA. In New York stock
Exchange the launch of new software called SAP S/4 HANA took place on 3rd February 2015. It
had been called as biggest update in the world of ERP software. In March 2015 they had come
with another update which is known as SAP S/4 HANA Finance. This software is provided in 39
languages and having versions of 64 country. When this software is launched it was known as
SAP Simple Finance (Kepczynski and et. al., 2018). As it covers all matters of financial
management which includes financial accounting, compliance and risk management, financial
planning and analysis etc. SAP ERP was based on SQL, ORACLE, DB2 etc. whereas SAP S/4
HANA Finance is based upon HANA database which are created by themselves.
SAP S/4 HANA is a financial application that is developed in SAP S/4 HANA ERP
Platform. This software consists of different sets of function of financial management which
provide real time data form different ERP applications (Missbach and et.al., 2016). This software
can be said as part of SAP S/4 HANA that is built on memory database of SAP HANA platform.
It integrates all organisational functions in one system and combines all transactions into a real
time applications (Overview of SAP S/4 HANA Finance, 2018). This software was previously
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known as SAP simple finance, but as it is designed to integrate modern analysis by removing all
traditional barriers of planning, data entry etc. and also provide analysis of data at all levels of
management. This software is one of important update that had been created for managing
finance and accounting that is powered by SAP HANA. It helps in performing different financial
operations and reporting of transactions in real time scenario (Riesner, Frank and Klaus-Peter
Sauer, 2017). It helps in analysing different financial conditions of any organisation in market.
This updates include new features such as real time analytics, provide universal journals and
streamlined design. This has been developed for increasing efficiency process for a life cycle of
any asset. SAP S/4 HANA Finance can provide analysis using react time data even in live
strategy meetings. The innovations that had been done SAP Cash Management are-:
1. It provides real time visibility for bank balances as data are maintained in real time basis
2. The finance operations that are done are of collaborative nature.
The SAP S4/ HANA Finance consists of four components-:
1. The functional core component of this update is it provides various enhancements and
financial capabilities that allows business to make there income statements in an easier
manner.
2. This Software is based on SAP Fiori which is an graphical user interface which helps in
interacting there core components through Fiori screens which are very much user
friendly(Nica and et. al., 2017).
3. The analytics component that been provided in this software enables an real time
reporting and also provide systematic analysis of data.
4. It helps in providing key financial decisions at all level of management because it
provides data at every level.
This software can be implemented in any premises, in cloud and even in hybrid
environments and they are regularly updating their software for better features.
Process for switching to SAP S/4 HANA Finance-:
1. Greenfield Approach which is also known as implementation of new system with help of
data migration from previous system
2. Brownfield Approach-: It is up-gradation of older version of SAP by converting from
older software to new software.
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3. Landscape Approach-: This is mix of both of above approaches in which conversion and
installation both process are done at a point of time.
The SAP S/4 Finance had been simplified from previous SAP in following manner-:
1. The User interface which was in older versions of SAP was Graphical user interface
which was outdated had been changed to Fiori which is very much user friendly and easy
to use. This supports all devices which includes computers, smart phones, tablets etc.
2. The Functions had been made easy and it offers a single solution for various business
requirement which helps in time and cost saving of any company.
3. The Data Model that had been established in HANA Finance is of HANA itself whereas
in older version database had been created by Structured Query Language (SQL) or
ORACLE (Bardhan and et.al., 2017).
The SAP S/4 HANA Finance have three main characteristics-:
1. It has new design which focusses on specific needs of users that can accessed anywhere
with any browser.
2. It has an modern architecture that is based upon simplified data that helps in processing
all data using a single system.
3. This software is having intelligent business approach that notifies users where there is fall
in parameters.
The Key Capabilities of SAP S/4 HANA Finance are -:
1. Helps in Financial Planning and analysis of Data
1. Provide simulation for changes in business model directly in ERP systems
2. Uses operational and real time data for eliminating redundancy (Okungbowa, 2015).
2. Closing of Financial accounts
1. As it uses a single unified model that increases productivity and helps in reducing
risks and helps in providing quicker financial statements
3. Helps in Receivables Managements
1. Easily record and manages receivable of customers
2. Reduces manual efforts and costs that are associated with account receivables.
4. Cash and management of financial risk (SAP S/4 HANA Finance. 2018)
1. As it includes liquidity planning cycles helps in planning for cash managements
2. Provides real time visibility of bank balances and there currency exposures.
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Difference between SAP S/4 HANA finance and Current SAP ERP FICO
SAP ERP FICO-: This is an functional component which allows ant organisation to manage all
of there financial data and also helps in generating analysis of financial statements by effective
planning and decision making (Seethamraju, 2015). In this SAP there are two modules for
different financial process named as
SAP(FI) Finance
SAP(CO) Controlling
SAP (FI) deals only with financial reporting and book keeping whereas SAP(CO) mostly
focusses on planning and controlling costs. These updates were released separately but now it
has been integrated by many users and are referred as single module SAP FICO(Roze and et. al.,
2016).
As SAP FI helps in enabling any companies to generate there financial statements and there
reporting analysis. It contains several sub-modules for accounting process, they are-:
1. General Ledger which contains all transactions that had been done in accounting system.
2. Accounts Receivable manages all customers’ accounts like invoice posting, advances etc.
3. Accounts Payable manages all transactions relating to vendors like credit memo, invoice
posting etc.
4. Assets accounting involves all transactions that are related to their fixed assets such as
land and building, plant and machinery etc. and all accounting related activities and there
reporting.
SAP (CO) helps in managing all accounting and there reporting for internal and external
sources. It helps in planning, reporting and monitoring costs of any business operations
(Kepczynski and et. al., 2018). It comprises of following sub modules-:
1. Cost centres that deals with cost that are associated with there internal departments. For
ex-: production, marketing, sales etc.
2. Product costing enables company to know about cost that is required to produce goods
and services.
3. Profits Centres as compared to cost centres deals with both revenue and expenses
whereas cost centres only deals with expenses.
4. Profitability analysis helps in enabling for any company to analyse there profits of there
products.
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The difference between SAP S/4 HANA Finance SAP FICO
1. SAP S/4 HANA Finance in based on SAP HANA ERP software whereas SAP FICO is
based on module ECC 6.0 Platform.
2. SAP S/4 HANA Finance runs on HANA Database whereas SAP FICO runs on SQL
Server or ORACLE or any compatible versions of this database.
3. The FICO Module was base on traditional methods whereas HANA Finance was based
upon modern methods of accounting.
4. The User interface Fiori which was created in HANA Finance was more user friendly
that that was with SAP FICO.
5. HANA Finance can be said as updated version of SAP FICO, as HANA Finance provides
all solutions that are related to financial management (Bardhan and et.al., 2017).
6. HANA Finance is used by larger and big organisation as they need to all analysis related
to financial management whereas FICO module are used by smaller firms.
7. All important functions are stored in one table ACDOCA which is known as universal
journal in HANA Finance whereas in SAP FICO the n number on tables are made like
MSEG, BSEG etc.
8. SAP FICO does not provide analysis of Real time data whereas HANA Finance provides
analytics through real time data.
9. HANA Finance can combine data very easily when as compared with SAP FICO as there
were some complexities in combining data in that software.
Benefits of SAP S/4 HANA Finance for any business
It provides data from batch oriented process to real time process-: As this software is built
on memory platform of SAP so it allows any financial organisation to convert from lengthy
process to real time process by-:
1. Through end to end process of automation
2. by continuous accounting and monitoring
3. Faster Financial Analysis
4. Real time analysis of cash and treasury management
5. By predictive planning
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Universal Journal-: As SAP S/4 HANA Finance provides data from universal journal so
it will accelerate there inter-company reconciliation and improve there accuracy. For ex
entering any entry in books of accounts of BHP can post all the transaction in relevant
accounts.
User Friendly-: As Fiori is user interface in HANA Finance which had been designed as
user friendly as it enables easy access for work lists and different reports. It is specifically
designed as simple and responsive which helps there users to easily access detail that are
required (Missbach and et.al. 2016). For ex-: Like When there was DOS was there that was
no graphical interface and afterwords XP had came which was very much user friendly.
Generates Real time reports-: As HANA Finance uses technology of in memory
computing for generating real time and detailed reports, so it eliminates any need for data
replication and lengthy batch job process (Bardhan and et.al., 2017). For example Bank
statement of Metcash can easily be matched with cash books as report provided is
considering whole time real data.
Helps in Financial Planning-: This can be access through interface of Microsoft Excel
which will help in streamlining there financial process. With the help of this feature in
HANA Finance it will automatically transfer financial data to there cloud quickly and easily.
For Ex-: As data are maintained from real time data then reports that are generated are
factual that helps in financial planning of Metcash.
Helps in Combining Data-: This is best combining tool as it has feature to combine data
from managerial and financial accounting, which helps in speeding up there reconciliation by
using real time data. For ex-: Accounts receivable can easily be known as it combines all
accounts and provide real time information for BHP
Adopting HANA Finance is cost effective-:As it brings together all transactional and
analytical capabilities of different system to one location, which helps in better decision
making as checking and creating reports in different software (Seethamraju, 2015). As SAP
S/4 HANA finance provides all facility so no other software are required for managing other
things so it saves cost of BHP.
Adopted Throughput-: As HANA Finance had adopted throughput feature which helps
in shrinking there processing time by which any company can faster close there books of
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accounts. So, if financial statements are prepared earlier, Metcash can do forecast of next
financial year which will help in getting quicker and better results in business.
Financial Reporting-: HANA Finance provides quicker financial reports and replaces all
problems which were associated in providing slow and in depth reports. The Reports that are
made with HANA Finance are realistic and are based in real time data.
Close of Financial Data-: As HANA Finance prepares there reports monthly, quarterly,
annual or bi-annually which provides instant visibility on profit and loss of any organisation
that will help in decision making. As early financial reports are made it will help in
providing analysis faster which helps in creating quicker planning for next year for BHP
Global Coverage-: As SAP S/4 HANA Finance has been covering 62 countries with 26
industries, so it covers all major finance scenarios and also ensure regularly updation of
statutory and regulatory compliances (Roze and et.al., 2016). As there is coverage in
different countries it helps in managing customer relationship by providing solutions to their
problems.
Automation of Routine tasks-: The routine tasks are automatically updated with the help
of this software which helps in effective utilisation of resources and saves cost. For ex
routine task like payment for fire insurance is done at regular intervals with same amount that
had to be recorded in frequent intervals so they are recorded automatically in books of
Metcash.
Issues Faced in Migrating to SAP S/4 HANA Finance
The following are key problems that are associated in migrating to SAP S/4 HANA Finance-:
Transition Paths-: There are different ways to convert to SAP S/4 HANA Finance-:
 Through System Conversion-:In this any company can covert there existing SAP ERP
software with the help of using data migration and software update manager(Nica and
et.al., 2017.).
 By Newly Implementing-: New configuration is made and data is imported by using
different data migration tools such as migration cockpits.
 Landscape transformation-: In this migration of software it includes both path of
transitions that is new implementation and conversion. As through by this some
applications are converted and some are newly installed.
So the main problem pertains regarding selection of path by which they should migrate.
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Challenges faced because of system conversion-: Conversion to SAP S/4 HANA Finance is
not a technical upgrade but also changes business process and functionality of any organisation.
Inconsistency of Data-: As in data migration process there are chances loosing old data as
because all transactional data are migrated to universal journal.
Changes that are made in functions-: As there are many changes in SAP S/4 HANA
Finance when compared with SAP ERP there are chances where there is replacement of whole
application with different new solutions. For ex-: As for credit management in SAP ERP there
was function of SD(SI/AR) Credit Management which had been totally replaced with SAP
Credit management.
Fiori as new user interface-: As it had been changed totally from older graphical user
interface it can be difficult to understand to employees of different companies.
Hardware Configuration-: The hardware configuration had created problems with
companies as they had install hardware that are specified especially for SAP S/4 HANA Finance
(Nica and et.al., 2017).
Metcash is an leading wholesale and distribution company of Australia which deals in
variety of products like food, Liquor and hardware. They were using SAP ERP and they had
migrated it with SAP S/4 HANA Finance). The issues that they had faced regarding
implementation of HANA Finance. As, they ere using SAP ERP they had to adjust all there
hardware configuration according to SAP S/4 HANA Finance. There whole data was got
disturbed as transactional data which was there had to be transformed in universal journal and for
successful migration existing data must be consistent and clean. Data which was kept by
Metcash was not consistent which lead to lose their old data while migrating to HANA Finance.
The employees of Metcash was also not ready to adopt software because there were many
changes in functions. There was a need for training and development to employees for better
understanding of SAP S/4 HANA Finance.
BHP Australia works in process of extraction and processing Minerals, Gas and Oils.
They were using an older version of SAP and they had migrated with SAP S/4 HANA Finance.
The issues that majorly they had faced was regarding the interface that is provided. As Fiori is
totally different from their older Graphical User interface, there were major problem in
understanding that. The functionalities had been replaced with new ones like in SAP ERP for
Cash management there was function named as SAP Classic Cash and Liquidity Management
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had totally be replaced in HANA Finance with Cash Management. So there was difficulty in
understanding this functions. As in HANA Finance there is a feature of direct updation of routine
work which caused duplication in data. As when updates were made through improper
customization of data the master data of BHP had changed by which there income statements
affected.
CONCLUSION
This reports sums up that how SAP S/4 HANA finance can be implemented by upgrading
from older version of SAP. There are various advantages in migration with this new software
that can helps in saving of time and money. This report also concludes that there are major
differences from older version of SAP which was FICO when as compared with SAP S/4 HANA
Finance. There were some issues which were faced by Metcash and BHP as there will always be
problems in adapting new technology. But overall this report can conclude that if there is larger
organisation they should adapt SAP S/4 HANA Finance for better presentation, maintenance and
analysis of reports of real time data.
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REFERENCES
Books and Journals
Bardhan, D. and et.al., 2017. SAP S/4HANA: An Introduction (SAP PRESS).
Kepczynski, R. and et.al., 2018. Implementing Integrated Business Planning: A Guide
Exemplified With Process Context and SAP IBP Use Cases. Springer.
Maheshwari, A., 2017. Implementing SAP S/4HANA Finance (SAP PRESS). SAP PRESS.
Missbach, M. and et.al. 2016. SAP on the Cloud . Heidelberg: Springer.
Nica, A. and et.al., 2017. Statisticum: data statistics management in SAP HANA. Proceedings
of the VLDB Endowment. 10(12). pp.1658-1669
Okungbowa, A., 2015. SAP ERP financial accounting and controlling: configuration and use
management. Apress.
Riesner, Frank, and Klaus-Peter Sauer., 2017. SAP BW/4HANA and BW on HANA. Espresso
Tutorials GmbH.
Roze, S. and et.al., 2016. Long-term health economic benefits of sensor-augmented pump
therapy vs continuous subcutaneous insulin infusion alone in type 1 diabetes: a UK
perspective. Journal of medical economics. 19(3). pp.236-242.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers.
17(3). pp.475-492.
ONLINE
SAP S/4 HANA Finance. 2018. [Online]. Available Through:
<https://www.sap.com/india/products/s4hana-finance-erp.html>
Overview of SAP S/4 HANA Finance. 2018. [Online]. Available Through:
<https://www.michaelmanagement.com/blog/an-overview-of-s4-hana-finance>
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