Simple Finance is SAP

AP Simple Finance is SAP’s HANA solution for Accounting. The functionality that comes with Simple Finance is quite revolutionary as far as changes go. I have worked in the SAP Finance space for over 17 years and have not seen this many enhancements to the Finance solution introduced at the same time. Before we get excited about all this, let us get down to some brass tacks. Some SAP customers that I have spoken to feel that it is pretty brazen of SAP to come out with a product with the designation of “Simple”. After all, it was its complexity compared to other systems that was used to lure customers to SAP in the first place. I have heard comments such as “Simple Finance was the solution that we had BEFORE we implemented SAP” and “Why should we pay more money to get a simpler solution?” I am not part of SAP’s marketing team, and cannot say that I totally endorse the “Simple” moniker. I don’t think the name matters. In fact, the previous name of the solution was “Smart Financials”. In a certain context, the word “Smart” is the exact opposite of the word “Simple”, so who knows the thought processes behind choosing these product names. In my experience working with finance team members (CFOs, Controllers, Financial Analysts, Accountants etc.), a prevalent and recurring issue is with understanding and hence trusting of the numbers that are reported. However, due to the complexity of the system, when you have variances or reconciliation issues, it is very difficult to untangle the underlying causes of the differences and resolve mismatches between different reports. I think the Simple Finance Solution addresses some of the major issues which were previously dealt with by using workarounds and custom programs. Here is a summary of some of the new functionalities: 1.

Secondary Cost Elements are now part of the chart of accounts, hence all assessments, overhead calculations, internal activity allocations and settlements can now be seen in the financial statements;

2.

Using Account-based CO-PA, you can now break up the cost of sales value into different cost components, and you can break up the production variance into different variance categories. Basically you now have the advantage of costing based CO-PA (which is useful for contribution margin reporting) and account based CO-PA (which is useful for reconciling with the G/L) combined in one solution;

3.

Real-time summarization analysis is available for product costing reports, which means you do not need to run the data collection transaction (which can take a considerable amount of month end time) before producing these reports in a hierarchical format.

4.

By taking advantage of HANA’s in-memory processing, you can speed up the month end processes such as WIP and variance calculation, results analysis and settlement, and this frees up more time for analysts to evaluate the output of these transactions.

5.

Real-time reporting in the same system that the transaction was processed. This was the original design in the R/3 system. However, those reports became outdated and did not run well with massive amounts of data (and some of them were ugly, to boot). This led to the introduction of Business Warehouse (BW) and subsequently Business Objects reporting. As good as these systems are, not all businesses were impressed with the fact that there was a time lag between processing and reporting, and

that some reconciliation issues occurred between the ERP and reporting systems. With Simple Finance, you get the advantage of a “single source of truth” without encountering the issues described above. I will be blogging over the next few months about the specifics of the new functionalities and will flesh them out in more detail, so please stay tuned. I have also recorded a podcast with SAPinsider on the topic of Simple Finance, which you can find here.

Migration to SAP Simple Finance powered by SAP HANA by Jayanth Maydipalle on April 2, 2015

SAP Accounting powered by HANA contains New General Ledger accouting , Controlling and New Asset Accounting. If you want to implement and use SAP Accounting powered by SAP HANA, you have to migrate the existing user data from the G/L Accounting (FIGL), Asset Accounting (FI-AA), Controlling and Material Ledger areas. The comprehensive data table “ACDOCA” contains all of the line item documents from FI, FI- AA and CO. All postings of these applications are written to the new table after the installation and migration are

complete. Th e above screenshot shows the various accounting applications merge in the new structure of SAP Simple finance powered by SAP HANA. The following tables were replaced by SAP HANA views with the same names:  The line item, totals tables and application index tables of General Ledger Accounting (GLT0, BSIS, BSAS and FAGLFLEXA, FAGLFLEXT, FAGLBSIS, FAGLBSAS)  The totals tables and application index tables of Accounts Receivable and Accounts Payable (KNC1, KNC3, LFC1, LFC3, BSID, BSIK, BSAD, BSAK)  The line item and totals tables of Controlling (COEP for certain value types, COSP and COSS)  The material ledger tables for parallel valuations (MLIT, MLPP, MLPPF, MLCR, MLCD, CKMI1, BSIM)  The Asset Accounting tables (ANEK, ANEP, ANEA, ANLP, ANLC) Replacing these tables with views with the same names ensures the continuation of all read accesses to the tables mentioned. With the SAP Simple Finance add-on for SAP Business Suite powered by SAP HANA 2.0, the comprehensive data tableACDOCA is provided, containing all line item documents from FI, FI-AA, and CO. All

postings of these applications are written to the new table after the installation and migration are complete. SAP Accounting powered by SAP HANA is based on new General Ledger Accounting (FI-GL (New)) and uses functions such as ledgers to update a particular valuation, and the document splitting function. If you want to use SAP Accounting powered by SAP HANA, but were still using classic General Ledger Accounting until now, migrate the application data for General Ledger Accounting and the necessary settings for the new Customizing, for example ledgers and integration for Controlling. However, none of the functions of new General Ledger Accounting such as Parallel Ledgers and document splitting, are implemented. For Asset Accounting purposes you use new Asset Accounting in SAP Accounting powered by SAP HANA. During the migration from classic Asset Accounting to new Asset Accounting in SAP Accounting powered by SAP HANA, you migrate Customizing settings and transaction data. Source:SAP.com

New General Ledger Accounting powered by SAP HANA by Jayanth Maydipalle on March 2, 2015

Smart Financials requires New General Ledger Accounting. ( The classic General Ledger Accounting is not part of Smart Financials)  Either you already have New General Ledger Accounting active  Or when you don’t have New General Ledger Accounting active yet, you can install the Smart Finanicals first. Then you can migrate to New General Ledger Accounting directly and active it there.

The data model of new General Ledger Accounting was simplified for the integration with SAP Accounting powered by SAP HANA. All data in new General Ledger Accounting is stored in document tables and line item tables. The system calculates the aggregated data in the relevant views. The new data model eliminates the need to save redundant data (for example, in totals tables or index tables). Furthermore, inconsistencies can no longer arise between FI documents and totals tables. The following tables have been replaced by views:  BSIS  BSAS  GLT0  FAGLFLEXT  FAGLBSIS  FAGLBSAS Tables GLT1 and GLT2 are no longer available for new General Ledger Accounting within SAP Accounting powered by SAP HANA. Consequently, ledgers for these tables are no longer updated and can no longer be processed or analyzed in the Special Purpose Ledger (FI-SL). If you still need to use one of these ledgers, contact SAP Development Support (message component FI-SL-SL). The new data model allows you to continue to use programs to access

the database as before. This also applies for user-defined programs. The following functions are no longer available with SAP Accounting powered by SAP HANA:  Balance Sheet Planning  Reports for comparing planning data and actual data in Profit Center Accounting  Destruction of data or deletion of FI documents (Information Lifecycle Management)  Average balance ledger Classic General Ledger Accounting is no longer available due to the changed data model within SAP Accounting powered by SAP HANA. If you have previouslybeen using classic General Ledger Accounting, you can transfer your data to new General Ledger Accounting during the migration to SAP Accounting powered by SAP HANA. Since Customizing for classic General Ledger Accounting is no longer available with SAP Accounting powered by SAP HANA, the following Customizing activities have been included in Customizing for new General Ledger Accounting:  Clocing Cockpit: General Ledger Accounting(New) ⇒ Periodic Processing ⇒Closing Cockpit.  ReGroup: General Ledger Accounting(New) ⇒ Periodic Processing ⇒ Re Classify. As of SAP Accounting powered by SAP HANA, new General Ledger Accounting offers the following new functions and changes to existing functions (compared against SAP enhancement package 7 for SAP ERP 6.0 : SAP Accounting powered by SAP HANA.

 Balance Carryforward: In addition to the functions that were previously available, the program for carrying forward balances now enables you to initialize data carried forward previously when you want to repeat a balance carryforward. Furthermore, you can save results lists and then use the program to display them at a later point in time.  Integration with Materials Management: Account Determination for Cost of Sales, You can specify that the cost of sales is posted to different accounts on the basis of the cost component assignments. For more information, see the relevant release note for Controlling.  Data Aging: The previous functions for archiving accounting documents has been replaced by data aging. For more information, see the release note for data aging.

Parallel Accounting in New Asset accounting powered by SAP HANA by Jayanth Maydipalle on April 14, 2015

In New asset accounting, you can handle parallel accounting using depreciation areas. For representing parallel accounting in New asset accounting, you have two scenario’s as mentioned below.

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Using Parallel ledgers: The Ledger approach

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Using Additional accounts: The Accounts approach Ledger approach:

1.

2. 3.

4.

5.

6.

Different accounting principles or valuation are mapped in separate ledgers, as in new General ledger accounting. In general, the same accounts are used in the ledgers. The depreciation areas have equal status. Separate documents are posted for each accounting principle or valuation. For each accounting principle or valuation, the system posts the correct values in real time. The values that are posted are full values and not delta values. For each valuation, there is always just one depreciation area that posts to the general ledger in real time and manages APC. For this leading depreciation area, choose the posting option Area Posts in Realtime. This applies both for the leading valuation and for all parallel valuations. You can choose which of these depreciation areas, which post to the general ledger, posts to the leading ledger. One or more depreciation areas represent a valuation. You must assign an accounting principle uniquely to all depreciation of a valuation. For each valuation, the accounting principle has to be assigned to a separate ledger group. The ledgers of these ledger groups are not allowed to overlap. Differences in values in each accounting principle: You can enter documents that are valid only for a certain accounting principle or valuation. To do so, when entering the business transaction, you can restrict the posting to the accounting principle or to one or more depreciation areas.

7.

You can assign different fiscal year variants to each type of valuation. (There is a restriction in this case: The start dates and end dates of the fiscal year variants must be the same.)

8.

Within an asset class, it is possible to make a simple assignment of different G/L accounts (such as, reconciliation accounts for APC and value adjustments) for each valuation.

9.

If you have defined parallel currencies in new General Ledger Accounting, and you want to use these currencies in new Asset Accounting, you are required to create – for the leading valuation and the parallel valuations – the necessary depreciation areas for each currency.

10. Managing quantities: In the standard system, depreciation area 01 is intended for the quantity update. If needed, you can specify a different depreciation area for the quantity update. However, this has to be a depreciation area that posts to the general ledger. The quantity – if it is to be managed on the asset – is updated in the asset master record only when a posting is made to this different depreciation area. Different Fiscal Year Variants: You can enter a separate fiscal year variant for each depreciation area in Asset Accounting. The start and end dates of this fiscal year variant have to be the same as the start and end dates of the fiscal year variant of the company code. As part of the ledger approach, the system also allows a posting in a representative ledger, to which any fiscal year variant is assigned. The system then derives the period from the posting date. The depreciation, however, is determined as before using the fiscal year variant of the depreciation area of the posting.

Accounts Approach: 1.

You represent different valuations on different accounts within the same general ledger. This means that you have to create the same set of accounts again for each parallel valuation.

2.

Separate documents are posted for each accounting principle or valuation.

3.

For each accounting principle or valuation, the system posts the correct values in real time. The values that are posted are always full values and not delta values.

4.

For each valuation, there is always just one depreciation area that posts to the general ledger in real time and manages APC. The following applies for these posting depreciation areas:

1.

For the leading valuation, choose the posting option Area Posts in Realtime.

2.

For the parallel valuations, choose the posting option Area Posts APC Immediately, Depreciation Periodically.

You can choose which of these depreciation areas that post to the general ledger represent the leading valuation. ii. There can also be investment support on the liabilities side for the valuations. These depreciation areas also receive the posting option Area Posts in Realtimefor the leading valuation or Area Posts APC Immediately, DepreciationPeriodically for parallel valuations.

iii. One or more depreciation areas represent a valuation. You must assign an accounting principle uniquely to all depreciation areas of a valuation. For each valuation, the accounting principle has to be assigned to a separate ledger group. These ledger groups must always contain the leading ledger as the representative ledger. iv. If you have defined parallel currencies in new General Ledger Accounting, and you want to use these currencies in new Asset Accounting, you are required to create a depreciation area for each currency for the leading valuation. However, this is not mandatory for the parallel valuations. v. Differences in values in each accounting principle: You can enter documents that are valid only for a certain accounting principle or valuation. To do so, when entering the business transaction, you can restrict the posting to the accounting principle or to one or more depreciation areas.