SAP Accounting Procedure Analysis

This assignment provides a comprehensive analysis of SAP's accounting procedure and its implementation in various organizations. It discusses the differences between SAP S/4 HANA finance and current SAP ERP, and concludes with a case study on McLaren Technology Group's successful migration to SAP S/4 HANA. The report also references relevant literature and online resources, providing a thorough understanding of SAP's financial management capabilities.

RESEARCH PAPER

Table of Contents
INTRODUCTION...........................................................................................................................1
A brief historical overview of SAP S/4HANA Finance.............................................................1
The difference between SAP S/4HANA Finance and current SAP ERP FICO.........................3
Benefits of SAP S/4HANA Finance for businesses....................................................................6
Case Studies of companies and the issues they faced migrating to SAP S/4HANA Finance....8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Research paper considered a writing piece preprepared on the basis of author's research
subject to particular topic or point (Beel and et. al., 2013). Analysis of particular topic done with
the help of research paper. SAP S/4HANA is an entrepreneurial system software that helps in
analysing the data with the help of the proprietary operational database system. This report is
prepared to analyse the immediate need to embrace the digital age to match the new and evolving
business models and offer decision makers with instant insight. The use of SAP S/4HANA
Process analysed with effect of flexible and easy reporting.
A brief history and overview of SAP S/4HANA finance and the difference between SAP
S/4HANA and SAP ERP FICO are analysed in this report. Advantages of SAP S/4HANAKeep
changing and managing the departmental needs it is require to demonstrate the results that only
relevant to the business operations. This paper mainly use the different segments regarding the
structure and preparing plans for deploying strategies.
A brief historical overview of SAP S/4HANA Finance
SAP S/4HANA is an business resource planning software that helps in managing the
transactions, process of recording transactions, procure to pay, order to cash plan to product and
request to service and core capabilities (Johnson, 2012). It is a short form of “SAP Business
Suite For (4) SAP HANA” It is one of the integrated system software that records the
information at large level and produce a comprehensive report to assist management decision
and resource planning. It was introduced in 2010 and different applications were used as SAP
ERP, SAP business suite. It is ran on the basis of SAP HANA database and other data base. New
software was launched on February 3rd, 2015 at the New York Stock Exchange. The event
introduced could process cloud and premise editions and launched the on premise edition. Cloud
addition was on of the new addition launched followed at SAPPHIRE NOW on 6th May, 2015 in
Orlando, Florida.
SAP's journey started back from 1972 when it introduced its first product in market
named R/1. The architecture was mainly introduced to analyse the different culture and sections
for different systems. R1 also considered as a one tier system that helps in recording the financial
and accounting transactions. The architecture of R/1 was made off three layers as presentation,
application and database. It is required for an ERP system to installed one single system and
1

server to record the information and data at single place. The management and procedure mainly
based upon the product mainframe version. It was firstly introduced in 1979 and the three layer
were installed in main two servers. In 1992 R/3 with three layer interface system was launched
for efficient accounting and information retaining software. The current software of SAP is R/3
requires three servers and systems. R3 is one of the widely used system software by clients and
customers for better understanding and use of management procedures and management skills. It
is analysed that the user friendly interface was mainly introduced for managing the Graphical
user interphase for ethical base and standards. It was the main aspect considered essential in
terms of developing the accounting and reporting structure of business and managing sections in
better use and enabling process of interfacing between the SAP and R/3. It enables IDOC/ALE
processing form that creates a segmented and oriented information to users for better use and
management. It allows changes with in system and reduce the conflicts by deducting repetitions
of same financial transaction for a particular time duration.
After the tier architecture different type of formats and architectures were introduced in
the form of ECC (ERP central component) in 2004 (Plattner and Leukert, 2015). ECC assist
accountants to run the software business warehouse and strategic enterprise management (SEM).
It was the first SAP solution to organisations subject to application to a web browser or the
internet. It was the high performance tracker that impacted the net effect of distinction and
clearance between the data base. Till 2012 R/3 was considered in the list of innovative system
software and the was considered most valuable and voidable product in SAP's history. This
changed by HANA after implementing the new software. S/4 HANA was also one of the form of
SAP system. There is no any major difference between the HANA and S/4 HANA. It is one of
the high performing software used in management accounting.
After wards it get updated from ERP to SAP S/4HANA which is that is considered one
of the biggest update at this platform. Form two decades it is assisting the medium and large
enterprises to assist the management decisions. It evaluates the transactions by their nature and
provide a consolidated information and details. SAP S/4HANA finance is a part of SAP
enterprise management that release 1610 and the solutions to enterprises. It contributed huge
contribution in terms of attaining the accounting and financial requirements of organisation in
given deadlines. Financial planning and the managing sections were analysed in term of
developing the viable accounting and financial planning software. Booking keeping is one of the
2

conventional accounting method used by business and organisation in routine operations. Type
of accounting software were introduced that assisted accountants to make efficient plans and
opportunities to improve the internal business management functions at large level.
SAP R/2 to SAP R/3 are some previous version introduced for managing the financial
challenges and terms of for long term growth and development. It is important to publish
accurate results and information for getting desired financial outcomes. These virions was not
delivering adequate results and outcomes to accountants and it was becoming the barrier for
users to make appropriate financial planning procedures and financial plans. By analysing the
changing needs and requirement of users and business organisation lots of changes and upgrades
were made to convey the needs of business. Revolutionary changes were seen after introducing
SAP S/4 HANA in 2015-2018 in accounting and financial reporting for large entities and small
entities.
The difference between SAP S/4HANA Finance and current SAP ERP FICO
SAP ERP FICO is a previous version of SAP that helps in analysing the financial and
accounting needs of small and large business organisations (Sun, Gregor and Keating, 2015). A
synchronised information and database prepared for better evaluation and control subject to
management planning and strategic mapping for financing. It is considered that the consolidated
financial and corporate information not only assist the decision making but also divide the
challenges for better evaluation and control. Different sections are categorised in terms of
operating the business transactions and S/4 Enterprise management as SAP for marketing, sales,
services, assets management, research and development.
The administration and system essentially dependent on the item centralized server
rendition. The design was predominantly acquainted with dissect the diverse culture and areas
for various frameworks. It is broke down that the easy to use interface was primarily presented
for dealing with the Graphical client interphase. A transformed and well synchronised The
differences can be bifurcated as follows;
Basis SAP S/4HANA SAP ERP FICO
Concept It contributed enormous
commitment as far as
accomplishing the
SAP FICO considered as a
core functional component in
SAP ERP central component
3

bookkeeping and monetary
necessities of association in
given due dates. Main
difference between the Data
was used to analysed the
business operations for better
use and operations. ECC
enables the uses to apply the
business warehouse and
strategic planning for near
future and requirements. It
permits changes with in
framework and diminish the
contentions by deducting
reiterations of same money
related exchange for a specific
time term. Conventional
banking data base and use
utters the in memory database
and analyse the innovative
approach in terms of boosting
the performance.
that helps in analysing and
managing the information of
all financial data and
accounting information in
better and effective use. It is
mainly helps the organisations
to generate and execute the
procedures of more effective
business planning and decision
making. SAP FICO retains
specific share of profit and
analysing criteria of
developing needs and
requirements for better
decision making. It is one of
the more over the information
helps to consolidate the
information for better
understanding and recording of
accounting and formatting
information. The main purpose
of SAP FICO is to maintain
the financial information, SAP
controlling, specific process. It
deals with overall financing
reporting and recording
procedure for planning and
supervision of cost aspects.
Performance In terms of performance this is
more beneficial for comprising
and compiling transaction
This software contains bulk of
information at a single point
that provides results and
4

according to functional needs
and requirements.
outcomes in single format.
Criticality This is less complex and
reviewable method to assist
the structure in systematic
form. It conclude the expenses
and growth aspects to enhance
the transparency of different
accounting information for
developing in managing the
business operation in more
specific
It is mainly focused around
accounting and controlling.
Use of management and
functions mainly associated
with the comprehensive and
configuration system. It
incorporates the detailed
knowledge and information for
generating the practical
examples for particular sources
and options. Level of
criticality remain high in this
section.
Feasibility It provide large feasibility to
draw a valid conclusive report
and structure in terms of
financial planning and decision
making process.
Module for financial and
management accounting within
SAP and ECC accounting
procedures mainly helps in
understanding the optimisation
methods for development and
growth. Regulations and
methodologies are mainly
considered for simplify and
clarify the financial functions
of business.
Comparative analysis between SAP S/4HANA and SAP FICO
With the help of more functionally transformed in terms of simplified for table structure
and realisation for logistic module and financial terms for developing simplify the table and
5

structure. Logistics module has been set for releasing the functionality that becomes more
advanced to promise with ATP and integrated quality management for etc. The SAP accounting
mainly contains the core functionalities for financial and management accounting and deploying
the finance and focusing the SAP and simplify the data model.
Benefits of SAP S/4HANA Finance for businesses
Keep changing and managing the departmental needs it is require to demonstrate the
results that only relevant to the business operations. This paper mainly use the different segments
regarding the structure and preparing plans for deploying strategies.
Reliable source: This system helps to ease data processing and simplify complex
processes. It removes duplication and errors of data which enhances accuracy. SAP S/HANA
Finance software detects origin and sources of data so that these can easily appropriated. Also
brings clarity in understanding accounting transactions and their segregation (Ghattamneni,
2016).
Restricts data from copying and accumulation: SAP S/HANA Finance improves
efficiency as all the applications imposes load and complexity. This accounting software helps in
understanding business insights. As earlier data was not clearly identified among different
categories but with the help of this data is easily be processed in accurate table form which
reduces time of processing. If time is saved then system can also give feedback to queries and
this valuable time contributes to the success of organisation. With the help of this software,
financial data processing consumes less time because it brings lengthy process to real-time.
Simplification: It brings simplification through centralizing digital resources. It relies on
collaborating different financial processes in a way so that planning becomes easy.
Bring flexibility in business processes: It develops different business models which can be easily
changed. Designed in such a way that complex and time taking tasks are being highly focussed
as compared to unnecessary processes. So in short, companies are provided with higher
flexibility in designing as well as changing processes.
Learning from other companies: Data of reporting, measurement, statistics are
accessible to every company for taking help in learning this system. Practices of processing data
from this software differs from one company to another. A company can learn these practices
from another by just access to their data (Pattanayak, 2017).
6

Enhance innovation and performance: SAP S/HANA keep focus on enhancing
performance through efficient planning, their execution and creating reports from available live
data. This software offers services of management of financial risk, accounts receivable data and
fraud management. Along with it application of this reduces risk of slow speed and provides
access to data in just seconds. In terms of innovation, it provides innovative solutions to business
financial problems and expands the capacity of this software itself. Innovation is indeed needed
for application of this because it is not easy to change from traditional systems. Before accepting
it company has to evaluate all the aspects of cost, applicability etc.
Centralised system: Consolidation is done of all financial data in a shared model so that
liquidity will be maintained. And information of transactions comes on a single location for
better decision making. Benefits of central bank account management can be derived from this
software.
Immense security: There is doubt on security of SAP S/HANA finance. Companies are
provided with better safety of information and data. Only some of self-learning information
which is accessible to some of companies for better solutions are revealed (Sachan and Jain,
2018).
Profitability analysis: It helps in continuous reconciliation of transactions related to
expenses and revenues so that financial closing become easy. Also areas of profit can be easily
identified.
It is analysed that the system mainly help in functionality for asset accounting within S/4
HANA finance. SAP's new asset accounting helps in determining the longer sustainability with
participial and significant calculation in engine and software. Moreover, the information and
periodically depreciation calculation mainly determine the period end and more efficiently.
Accounting based information and analysis helps in managing the financial and accounting
section for delivering the options in more systematic manner.
Period ending and closing procedure also one of the important aspect consider while
preparing strategies and plans. It become more beneficial and effective for evaluating the starting
date and end date for code level and controlling process. In management code of conduct the
process become more complex and significant for flexibility and control. Non leading ledgers
and offerings more over depends the extension and practical use for appendix and control.
7

Cash management and control for small and medium scale organisation is also a key
point consider to incorporates the changes with in cash inflows and outflows. It assess all the
cash related information and data with simple collection methods and analyse the single source
of truth and redundancies. It drives the process form intangible to tangible frequencies for
transaction records. Replications and management information are created in significant manner.
It engage the process process of optimising the risk and uncertain changes occurs during the
tangible and non tangible aspects. It become more complex and stable after having the feasible
models. It focuses towards lean processing system and cross functional management in order to
determine the embedded statistical reporting and benchmarking (Bhattacharjee, and et. al.,
2017).
Case Studies of companies and the issues they faced migrating to SAP S/4HANA Finance
Case 1
Fujitsu case study states the scope and Nature of SAP S/4HANA finance for use of
structural data base and synchronised accounting system. The classic digitalisation challenges
subject to using the SAP S/4HANA financing system in organisation. Major issues occurs while
managing the software issues. IT departments have to manages the bugs and errors circulated
through cloud networking and web services. Inflexible processes reduce the responding tome and
extend the time duration of resolving the issues in desired requirement and time. It also fluctuates
the ratio of changing the IT staff subject to analyse requirement and complexity of reporting.
Problems mainly associated evaluation of data (Fujisu case study, 2017). Lack of integrations
and transparency also key factor as entire company. Optimisation of management capacity
licences management and inconsistency of SAP system is also one of the major issue faced by
organisations.
NAB (National Australian Bank) is an international financing and banking service sector
provides financing and banking facility to small and large scale enterprises. SAP HANA is one
of the method that helps in managing the finance sections for developing the structure of better
financing and banking operation. Clients were getting problems regarding the deposits and
information regarding the saving accounts. Approx $200 million was write-down on due to fail
of ERP project and the challenges mainly helps in determining the challenges for generating
finance initiatives and for more synchronised form. It exactly analyse the different process of
preparing the base of business process and it provides organisations for better look for data
8

ceases. A high performing data analysing procedure helps in understanding the process for
categorising the section for different sections. A memory based information and utilisation of
profit and sections are used for better understating and realisation of transactions and financial
changes. Implementation of SAP HANA finance process mainly helps in managing the inbound
accounting and finance transaction details by framing them as per nature of data.
Case 2
McLaren technology group is an automotive industry manufactures racing cars for
formula one (F1) and other racing segments. It tries ERP cloud platform for free IT department
form maintenance and keep them in close network connectivity. The department mainly helps in
managing the sections to reduce the cost of ownership and provide reliable aspects for
availability benchmarking. It mainly listed under potential technology partners as SAP and
analyse the several options. SAP HANA finance helped users of Maclaren to manage and
fluctuates the cloud networking subject to business suite and optimise the SAP HANA. The
system created a supply chain for better advancement and decision making process (Study on
Use of SAP by McLaren technology group , 2017).
Categorise the using criteria of SAP in cloud networking was the major issues for
accountants and finance department of organisation. Suite application mainly undertake the
process of implementation in modelling of new segments for better solutions and the massive
business growth. SAP S/4 HANA basically consolidate the analytical part and sections for better
evaluation and control. Finance users and accountants wants to use the software in decision
making by comprising the cost of sources used in manufacturing cars. After analysing several
options Mclaren decide to leverage SAP HANA enterprise cloud as its migrated off legacy
system to SAB business suite and optimised the system in systematic way.
CONCLUSION
This report is conclude the research made upon the financial and accounting decision
making subject in order to maintain the SAP accounting procedure for better better
understanding and financial management. Brief history of SAP and SAP S/4 HANA finance are
defined in organisational context. The difference between SAPS/4 HAAN finance and current
SAP ERP and FICO are considered in this report. The concept of SAP accounting procedure and
analysis of SAP ERP FICO for concluding the information in affirmative manner are analysed in
this report. A conclusive outcomes by using SAP S/4HANA finance for business used in
9

organisational context. Case studies of organisations and the issues are faced by consolidating
the SAP S/4 HANA finance.
10