Computerized Accounting in an ERP System

This article discusses SAP S/4HANA Finance, its benefits, differences from SAP ERP FICO, and case studies of companies migrating to it. It also covers the historical overview of SAP's ERP systems and the benefits of SAP S/4 HANA Finance for businesses. The subject is computerized accounting in an ERP system, and the course code, course name, and college/university are not mentioned.

Running head: COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
Computerized accounting in an ERP system
Name of the Student
Name of the University
Author’s Note

1COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
Table of Contents
Introduction......................................................................................................................................2
Body.................................................................................................................................................3
Brief historical overview of the SAP S/4HANA Finance...........................................................3
Difference between SAP S/4 HANA Finance and current SAP ERP FICO...............................6
Benefits of SAP S/4 HANA Finance for businesses...................................................................6
Case studies of two companies and the issues they faced migrating to SAP S/4 HANA Finance
.....................................................................................................................................................8
Case study 1.................................................................................................................................8
Case study 2...............................................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

2COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
Introduction
The SAP S/4HANA Finance refers to a financial application in the platform of SAP
S/4HANA ERP. It is comprised of a collection of interrelated functions of financial
management. It gives a real-time information from the applications of enterprise resource
planning (ERP). The SAP S/4HANA Finance is portion of S/4HANA which is established on
platform of in-memory SAP HANA database. The S/4HANA incorporates the cross-
organizational business functions into a single system that collaborates the transactional analytics
along with processes for real-time applications (Junnarkar and Verma 2016). The SAP
S/4HANA Finance, previously was known as Simple SAP Finance, is the basic application of
business established for the S/4HANA platform. It is made to eliminate the traditional hurdles of
the analytics, transactional and planning systems to provide instant solutions and on-the-fly
evaluation utilizing the financial data levels. A maker business decision can utilize the SAP
S/4HANA Finance to find out the information and make various predictions of possible
decisions using the real-time financial informations from various systems. The SAP S/4HANA
Finance has the objective to provide guidance to the financial specialists and professionals in
every industries that includes Chief Financial Officers and others included in treasury accounting
tax and financial operations, compliance along with volatility. The user base includes small
businesses to large businesses globally (Lorenc and Szkoda 2015).
The primary benefit of SAP S/4HANA Finance has is trending at a high speed as it
includes various integrated characteristics for the various pecuniary functions like the
management accounting and financial accounting (Junnarkar and Verma 2017). Due to this, the
SAP S/4HANA Finance provides a easy reconciliation of the financial methods and gives a

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single source of financial truth for the business, as per the SAP. The other key benefit is the
capability to utilize the real-time information with analytics to model and forecast the changes
effect that an enterprise may consider, such as acquisitions (Umar, Khan, Agha, and Abbas
2016). This make the financial professionals, that may include CFOs, to operate a more vital role
in the corporations decisions.
Body
Brief historical overview of the SAP S/4HANA Finance
For the past few years, SAP has been operating with several customers across the globe
for helping them in becoming the best run businesses in this sector by solving challenges of
information technology and complex businesses. SAP has identified the present business trends
and developed digital business framework for supporting their customers as they attempts to
make their way through digital transformation. After tier-architecture versions, SAP has changed
its design completely with introduction of ERP central component in the year 2004. ERP central
component enables the users to run Business Warehouse (BW) as well as Strategic Enterprise
Management (SEM) applications within an instance (Assets.kpmg.com 2018). The first SAP
solution was ECC (ERP Central component) that helped to extend the business applications to
web browser. In the year 2011, SAP launched SAP HANA in-memory platform that is designed
to be better simplifier for the customers in inventing and reinventing their business with timely
insight. HANA is the new high- performing database of SAP that utilizes latest technological
innovations for boosting business performance (Maheshwari 2017). SAP launched certain
applications such as SAP Business Suite and SAP ERP in the year 2013 for facilitating the
enterprises drive real- time businesses as well as simplify running these applications by bringing
analytics and transactions together in single memory- platform. In addition to this, SAP re-

4COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
programmed this application logic for optimizing Business Suite performance combining with
HANA. SAP Business Suite is the business application set that enables procedure to run within
the SAP. SAP then turned its concentration to particular business line and customers have been
able to increase real- time insight over the finance system. Moreover, these applications that are
built on SAP HANA also facilitates to drive business procedure and framework. These SAP
HANA applications for business lines leverage platform value by addressing vital requirements
for business.
In the year 2015, SAP again launched high- generation business suite namely SAP S/4
HANA based on native HANA platform for supporting simplified data frameworks. This
application contains functionality that permits enterprises to accelerate, optimize and simplify
finance function (Vosough et al. 2016), Besides this, SAP S/4 HANA application operates on
integrated basis with other solutions in SAP, which are again reprogrammed for optimization
with HANA. Various new features have been included in SAP S/4 HANA such as streamlined
design, real- time analytics and universal journal. SAP S/4 HANA also incorporated Flori- based
user interface as well as role- based accessibility for various objectives. S/4 HANA depends on
the advanced in- memory and provides personalized Flori- based customer experience for
accessing role- based solution. It might be integrated over the cloud environment or on- ground
solution. There are several customers who are moving from this SAP Business Suite to S/4
HANA owing to certain benefits offered by this new business suite. SAP also provides SAP
deployment project for performing fast migration to HANA platform as well as to SAP Finance
solution. Different partners of SAP provides incorporation of fixed price for some clients. With
SAP S/4 HANA, SAP has been offering new products and future generation of the business
applications - simple corporation software for big data and is also designed for facilitating to run

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in digital economy. Furthermore, with advanced characteristics of SAP HANA, SAP S/4 HANA
has been designed for operations and planning of real- time business and analysis of BI. In
addition to this, SAP Flori- based user interface of this S/4 HANA solution gives role- based
experience to the users. SAP S/4 HANA generally delivers simplifications regarding customer
adoption, user experience, data model, business procedure, decision making and helps in
innovations for helping businesses run in digital economy. SAP S/4 HANA finance usually
covers SAP accounting that is powered by SAP HANA as well as SAP Cash management. The
benefit that SAP S/4 Finance provide is its features combined with processing speed for different
financial functions that include- financial accounting as well as management accounting. Owing
to this, SAP S/4 HANA finance permits for faster reconciliation of financial procedure that
include quarterly close, single financial source based on SAP. Installation of SAP S/4 HANA
Finance aids to replace financial applications of the SAP enhancement package for SAP ERP. It
also provides real- time version of truth that supports higher data transparency and offer users
ability in drilling down to line- item as well as to have accessibility in real- time reporting.
Difference between SAP S/4 HANA Finance and current SAP ERP FICO
The SAP FICO is the primary component of functional in SAP ERP Central Component
that allows the business enterprises to administrate its financial data. The objective of SAP FICO
is to provide the organizations to manage and generate the pecunary statements for reporting and
analysis and help efficient business planning along with making of decision (Al-Sabri, Al-
Mashari and Chikh 2018). The SAP FICO comprises of two modules that includes SAP
Controlling (CO) and SAP Finance (FI) that are utilised specific financial processes. The SAP
FICO deals with total financial accounting and reporting at that time the SAP CO highlights
more narrowly on monitoring and planning the costs.

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On the other hand SAP S/4HANA Finance is the more new technique of financial
application in the platform of SAP ERP that comprises of a set of interrelated functions of
financial management that gives a real-time information from the applications of enterprise
resource planning (ERP). The SAP S/4HANA Finance is portion of S/4HANA and is established
on the SAP HANA platform of in-memory database.
SAP S4 HANA is mentioned as the new a direct evolution and digital core from SAP
FICO for existing customers. The new version SAP is now offering many discounts to nudge this
adoption forward. But, it is not a direct replacement for SAP ERP with respect to the capabilities
and functionalities (Hejazi, Halpin and Biggs 2014). The S/4HANA integrates the cross-
organizational business functions into one system that collaborates the transactional analytics
and processes for applications that are real-time. The SAP S/4HANA Finance that was
previously known as the SAP Simple Finance previously is the primary application of business
made for the platform of S/4HANA. It reduces the outdated barriers of the transactional,
analytics, and systems of planning to give instant solutions along with analysis using the levels
of financial data (Narayanan 2017). A maker business decision can utilize the SAP S/4HANA
Finance to find out data and generate various predictions of decisions with the help real-time
financial information from several systems.
Benefits of SAP S/4 HANA Finance for businesses
Businesses in digital era needs increased agility, capacity and proper real- time
information to leverage full advantage of emerging technologies. SAP that emphasized
advantages of new suite has provided customers proper insights into next generation of ERP
systems that meet their demands in business. S/4 HANA in SAP’s in future generation business

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suite provides support as well as real- time collaboration to digitalized business procedure. May,
Böhm and Lehner (2017) has found out that SAP S/4 HANA has been proving to be SAP’s
effective ERP systems. This application provides unique benefits to every stakeholders of the
business organizations. By using SAP S/4 HANA, enterprise can decrease complications of the
SAP landscape with streamlined suite running on the platform of SAP HANA. The information
technologies fraternity mainly realizes potential of S/4 HANA as driving force for decreased
TCO (total cost of ownership) that relies on savings from the leaner databases and
consolidations, simplifications and speed opportunities (Sun, Gregor and Keating 2016). This
new business suite mainly focuses on giving decision support to end users in real time, which is
data- driven and considers both external as well as internal sources of data. Most significantly,
this SAP S/4 HANA permits the enterprises to work in the digital economy seamlessly.
However, this application has been a vital driving factor for different businesses that uses SAP
ERP over the past few years. This takes into account business benefits of the S/4 HANA and
make decision whether they might adopt modernized ERP solution.
The finance leaders are making investments in this technology for providing better
insights to the organizations. By adopting this application, the finance leaders enhance their
influence on making strategic decisions beyond core processes. There are some business benefits
of SAP S/4 HANA that might be taken into account while deciding which ERP system is best fit
for the business. These benefits are described below-
Performance- SAP S/4 HANA runs on SAP HANA that flagships in- memory estimating
database. This signifies that running SAP solution namely S/4 HANA generally takes benefits of
speed of the transaction reporting as well as processing native to SAP HANA. This SAP S/4
HANA permits an individual to experience better performance since it relates in complex finance

8COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
activities including- execution, reporting, real- time planning and better forecasting.
Furthermore, it also permits an employee to offer better service for consumer- centric
applications.
Batch to real-time- This application helps to run financial closing in faster and effective way.
SAP S/4 HANA Finance has been natively built on the SAP’s in- memory platform, permitting
financial organizations to shift from lengthy batch –oriented procedure to the real-time procedure
(SAP 2018).
No aggregation and duplication of data- This new business suite helps to better recognize what
has better contributed to the cash movements. With this SAP S/4 HANA Finance, an individuals
application work at line item level provides deeper insights of business.
Source of truth- This application helps to accelerate the intercompany reconciliation as well as
enhance its efficiency. Apart from this, SAP S/4 HANA finance characterizes the Universal
Journal for the management as well as financial accounting. Each finance applications generally
access similar- up-to date.
Non-disruptive replacement- This SAP S/4 HANA assures seamless transition for the custom
applications. However, transitioning to the SAP S/4 HANA finance do not disrupt any kind of
present financial disruptions.
Centralized Finance- This tool centrally manages the group liquidity and cash of the business.
Integration of SAP S/4 HANA Finance in the shared service framework, thereby centralizing the
transactions of an individual into consolidated instance.
Smart Application- This tool automatically matches payments as well as invoices with the
machine learning. The intelligent services like the IoT, machine learning along with modern

9COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
analytics are now implementing to finance procedure for delivering automation as well as
predictive insights.
Case studies of two companies and the issues they faced migrating to SAP S/4 HANA
Finance
While SAP S/4 HANA has been identified for its capability to create redefined users
experiences, assists in the digitization processes and drive simplification, this application has
faced with certain level of uncertainty for few enterprises (Burns 2018). The findings from HCL
commissioned research survey of the SAP end users published that indecision persists among
different companies with around 60% of the respondents are not committed to S/4 HANA
roadmap within next few months. Other challenges involve lack of compelling business case for
the SAP S/4 HANA migration, ambiguous migration flowchart, business disruption and unclear
commodity roadmap (Pattanayak 2017).
Case study 1
One of the reputed multinational corporation TCS faced certain issues and challenges
while migrating SAP S/4 HANA Finance. Based on the beginning of start point and systems, the
two major paths exists in migrating to SAP S/4 HANA that include- greenfields and brownfield.
But both these routes occurs with their own benefits and challenges. The deployment of
brownfields might face huge difficult paths since they shift from systems that have not been
updated in decades owing to customizations as well as fear of breaking critical business systems
(Tcs.com. 2018). Greenfield SAP S/4 HANA installations did not created problems for this
organization even though in any migration, there can be some vital decisions to be made. Some
of the vital components to successful installation of SAP S/4 HANA include- designing of
schedule, creating teams and assigning ownerships. On the other hand, in brownfield migration

10COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
creates difficulty for this organization. This might take several months to assure that data is clean
and system is ready. Moreover, other challenges that this company face while migrating SAP
ERP to SAP S/4 HANA finance are given below-
 Inconsistencies of data- One of the critical part of the conversion to SAP S/4 HANA is
financial data migration. During this stage, the transactional data is mainly transformed to
new data framework of universal journal. One error that occurred in this organization
during migration involve difference between common ledger and subledgers as well as
document tables and inconsistencies in the asset accountancy.
 Huge changes in functionalities- With migration of SAP S/4 HANA , there can be some
vital changes to functional scope of the SAP S/4 HANA as compared to SAP ERP. The
finance managers of TCS faced problems regarding unavailability of liquidity
management in SAP S/4 HANA and thus replaced with developed SAP S/4 HANA cash
management (Menon 2016).
Case study 2
Another major multinational enterprise Infosys has also faces some challenges while
migrating from SAP ERP to SAP S/4 HANA. This organization became the SAP global service
based partner in the year 2008. It had also acted as co- development partner with the SAP for
developing tools and sector specific extensions and thus act as SAP S/4 HANA value assurance
partner. The main areas that this company focuses on is its own suite of sector- specific
S/4HANA extensions, accelerators and migration tools. While migrating SAP S/4 HANA, this
organization faced few challenges that include-
 Less concentration on its SMB client base that has been driving much of S/4 HANA
adoption

11COMPUTERIZED ACCOUNTING IN AN ERP SYSTEM
 The workforce of SAP is mainly weighed towards other rivalries
As the SAP S/4 HANA has been providing defined functionality, this might not meet
requirement of clients that presently utilize customized sector procedure and technologies.
While finance functionality has been offered by SAP S/4 HANA finance, client specific
requirement are met for facilitating adoption. The experts faces time limit issuers while
understanding the ways to adapt to its. The finance mangers of this company also agreed with
the fact that assessing the transition cost is the major challenge that Infosys has been facing
during migration. Thus, the finance experts are required for detailed configuration as well as
testing and monitoring during the project proceeding.
Conclusion
The SAP S/4HANA Finance refers to a collection of software functions for business that
enables the core business and business support processes beyond and inside the organisation
boundaries. It’s built on the proprietary operational data base system of SAP. It based on the in –
memory data base that refers to management system that is primarily dependent on the main
memory for the storage of computer data. The SAP S/4HANA Finance is the Enterprise
Resource Planning package of software that helps to cover a day long process of business and
core capabilities that includes, procure-to-pay, order-to-cash, request-to-service and plan-to-
product. SAP S/4HANA Finance integrates functions businesses and industry along with re-
integration of SAP Business products Suite like the SAP SRM, SAP CRM and SAP SCM.

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