accrual engine

1. ACCRUAL ENGINE
Accrual processing is a typical and painful period end activity for the business users. SAP has
come up with Accrual Engine in S4 HANA 1909 to make accrual processing easier.
1.What is Accrual Engine:
Accrual postings belong to the typical period-end closing activities, since the amount of the
necessary accruals is not usually known until the end of the period.
From a technical point of view, the Accruals Management functions build on the Accrual Engine,
which calculates the accruals that are posted in Financial Accounting.
Accruals do not need any separate journal entries but are saved as line items in the Universal
Journal with REFERENCE KEY = ‘ACES4’
2.Accruals supported by Accrual Engine:
i) Manual Accruals
For manual accruals, you enter the data of the business transaction to be accrued or load the
corresponding data to the Accrual Engine. The system calculates the amounts to be accrued.
ii)Purchase Order Accruals
In purchase order accruals, the required data is taken from the Materials Management
component, transferred to the Accrual Engine, and automatically converted to accrual items. The
system calculates the amounts to be accrued
3.Business needs & Motivation: Advantages of S4 HANA Accrual Engine
The S/4HANA Accrual Engine
a) Is optimized for S/4HANA
It is fully integrated into the General Ledger:
All currencies of General Ledger are supported

2. The Accrual Engine postings are stored only as line items of the universal journal entry, in table
ACDOCA.
The fiscal year variant of the G/L ledgers are supported.
Standard FI reversal, e.g. using transaction FB08 or F.80 is supported.
There is no redundant storage of the postings as original document.
No reconciliation effort any more with G/L: Transaction ACACTRANSFER ‘Transfer of ACE Docs
to Accnting’ is obsolete.
b) There are no summary records in the Accrual Engine:
No limitation of the number of fields in reporting.
No separate balance carry forward run required. The G/L balance carry forward is sufficient.
Transaction ACACCARRYFORWARD is obsolete.
Enables Complex Postings – More than two line items are possible by customer-defined of
posting schemas.
Allows optional review and/or approval of periodic accruals at period end.
c). Mass Upload of Accrual Objects is possible:
Create or Update accrual objects with the total amount – For creating or update accrual objects.
The total accrual amount is a required field.
Create or update accrual objects with periodic amount – For creating or updating accrual objects.
The periodic accrual amount is a required field.
Update periodic amounts only (Quick mode) – For updating existing period periodic accrual
objects.
4. Delta Logic for Accrual Postings:
You can configure the accrual engine to post in each period the delta amounts compared to the
former period or to reverse and post again the full amount:
If delta posting is configured, the Accrual Engine calculates the amount for the given period and
subtracts the amount that was already posted before. Only the delta is posted.
If full posting is configured, the Accrual Engine first reverses the amount that was already posted.
Then the Accrual Engine calculates the amount for the given period and posts this full amount.
Both, reversal and full posting aredone in the given period.
5.Journal Entries: For Accrual Transaction Type PP-Periodic Posting
COMPLETE POSTING
1st Periodic Posting
Dr Offsetting Account / COST Account
Cr Accrual Account / B&S Account
2nd Periodic Posting
Reverse previous period posting
Dr Accrual Account / B&S Account
Cr Offsetting Account / COST Account
Post the Accrual amount for current period in the same JV
Dr Offsetting Account / COST Account
Cr Accrual Account / B&S Account
DELTA POSTING
Dr Offsetting Account / COST Account
Cr Accrual Account / B&S Account

3. 6.Review and Approval:
Review means: A reviewer can adjust the periodic accrual amounts that are proposed by the
system. If no user performs the review, the system will post the proposed amounts.
Approval means: An approver can approve or reject the periodic accrual amounts that are
proposed by the system. If nobody approves the amount, the system will post no accruals for this
accrual object.
Accrual Transaction Types – Different types of Posting:
IP – Opening Posting When an accrual object is created, the total amount can be posted.
PP – Periodic Posting The amount that is calculated by the accrual method for the single periods
can be posted.
FP – Automatic Release Posting (also called Final Posting)Reduce the accruals by posting them
to some other account, for example a P&L account. This type of posting occurs if the status of
the accrual object is changed to Prematurely Finished.
There are other transaction types as well which can be explored as per customer requirement.
Accrual Methods for Accrual Calculation:
LINEAR – Amount equally distributed through all periods automatically
UPLD_AMNT – Use amount that was uploaded into the Accrual Engine manually
There are other methods as well.
Configuration Steps:
Basic Settings:
Step 1: Set Application Component to be Customized
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Set Application Component to be Customized
Step 2: Assign Company code
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Basic SettingsAssign Company code
Select New Entries button
Company code: HIL
Save
Save in your request
Step 3: Close fiscal year for changes to Accrual Objects
Same Path
For Company code: HIL Close Fiscal Year 2001
Save
Save in your request

4. Step 4: Define Accrual Line Item Type
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Basic SettingsAccrual Item TypesDefine Accrual Line Item Type
Select New Entries button
Accrual
Item
Type/Category Default
Accrual
Method
Description
SCSTACT N-Accrual /
Deferral
Select
Linear
Costs
Save
Select Accrual item SCSTACT
Double click on item type settings for Ledger group including representative ledger folder
Posting Frequency Select P Posting per period
Reversal posting Select Inverse posting
Deselect review active check box
Deselect Approval required check box
save
Step 5: Assign Currency Types to Accrual Line Item Type
Same path
Select new entries button
Accrual Item type Company code Ledger Currency Type Currency
Handling
SCSTACT HIL 0L 00 BY Accrual
Engine
Save
Step 6: Define Accrual Methods
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Accrual Calculation Define Accrual Methods
Select new entries button
Accrual Method ABAP Class for Accrual
Calculation
Text
LINEAR CL_ACE_CFG_METHOD_LINEAR
_P1
Linear Distribution Periodic
Specific
Save
Step 7: Define Posting Schema (Given by SAP)

5. SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Accrual Postings Define Posting Schema
Symbolic accounts

6. Step 8: Assignment Accrual Item types to Journal Entry Types and Posting Schemas
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Accrual Postings Assignment Accrual Item types to Journal Entry Types and
Posting Schemas
Select new entries button
COMPONENT ACAC
ACCRUAL ITEM TYPE SCSTACT
COMPANY CODE HIL
ACCRUAL TRANSACTION TYPE PP (PERIODIC POSTING)
DOCUMENT TYPE SA
POSTING SCHEME SAP_ACE_PP
POST DELTAS DESELECT CHECK BOX
POST ONLINE DESELECT CHECK BOX
POST PERIODICALLY SELECT CHECK BOX
INACTIVE DESELECT CHECK BOX
SAVE

7. ‘Post Deltas’ checkbox unchecked here. That means full posting will take place in each period. Refer to the
full posting logic mentioned above.
Deselect ‘Post Deltas’ checkbox is checked here. Deselect post periodically check box

8. Step 9: Define Accrual object categories
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Applications for the accrual engineManual AccrualsAccrual Object
CategoriesDefine Accrual Object Categories
Select new entries button
Accrual Object Category Text
0RENTING Rental Agreements
Save
Step 10: Define Accrual object sub-categories
SPROFinancial AccountingGeneral Ledger AccountingBusiness TransactionsAccruals
Management Applications for the accrual engineManual AccrualsAccrual Object
CategoriesDefine Accrual Object sub-categories
Select new entries button
Accrual Object SUB Category TEXT Accrual Object Category
ZRENT RENT 0RENTING
Save
Step 11: Define number ranges for Accrual Object Categories
Same path
Company code: HIL
Select change intervals
No. Range From No. To No.
01 1 100000
Save
Step 12: Assign number ranges to Object Categories
Same Path
Accrual Object
Category
Company Code No. Range
0RENTING HIL 01
SAVE
Step 13: Create and Edit Account Determination
Same path
Company Code Accrual Object
Category
Accrual Item
Type
Symbolic Account G/L Account
HIL 0RENTING SCSTACT FIN_ACCR_ACCNT 100503-NOT
TO BE OPEN
ITEM
ACCOUNT
HIL 0RENTING SCSTACT FIN_OFFSENG_ACCNT 400100
HIL 0RENTING SCSTACT INC_ACCR_ACCNT 100503
HIL 0RENTING SCSTACT INC_OFFSENG_ACCNT 400100

9. HIL 0RENTING SCSTACT PER_ACCR_ACCNT 100503
HIL 0RENTING SCSTACT PER_OFFSENG_ACCNT 400100
SAVE
END USER AREA:
1.CREATE ACCRUAL OBJECTS (ACACTREE01)
ACCOUNTINGFINANCIAL ACCOUNTINGGENERAL LEDGERPERIODIC
PROCESSINGACCRUALS MANAGEMENTMANUAL ACCRUALSCREATE ACCRUAL
OBJECTS
COMPANY CODE: HIL
ACCRUAL OBJECT CATEGORY:0RENTING
ACCRUAL OBJECT SUB-CATEGORY: ZRENT
TEXT:RENT ACCRUAL
UNDER LIFE:
START OF LIFE: 01.06.2023
END OF LIFE: 01.12.2023
SELECT PARAMETER TAB
SELECT APPEND ROW (CREATE BUTTON)
ACCRUAL ITEM:SCSTACT
LEDGER GROUP:0L
TOTAL ACCRUAL/DEFERRAL IN TRANSACTION CURRENCY: 14000
TRANSACTION CURRENCY: INR
ACCRUAL/DEFERRAL METHOD: SELECT LINEAR
SAVE
WE GET PARAMETERS FOR ACTUAL POSTING SCREEN
SELECT
DETERMINE PERIOD FROM VALUE DATE RADIO BUTTON
ENTER
WE GET MESSAGE ACCRUAL OBJECT IS POSTED WITH DOCUMENT NUMBER
ENTER ONCE AGAIN
WE GET 3 TABS
CALCULATED ACCRUALS TAB, POSTINGS TAB AND POSTED TOTALS TAB
SHOWING FIRST DATE, LAST DATE, BALANCE AMOUNT, DELTA AMOUNT,
ACCUMULATED AMOUNT AND REMAINING AMOUNT IN TRANSACTION CURRENCY.
2.PERIODIC POSTING RUN (ACEPOSTINGRUN)
ACCOUNTINGFINANCIAL ACCOUNTINGGENERAL LEDGERPERIODIC
PROCESSINGACCRUALS MANAGEMENT PERIODIC POSTING RUN
EVERY MONTH END WE HAVE TO RUN
FIRST DATE WE HAVE GIVEN 1.6.23 WE HAVE TO RUN ON 30.6.23
APPLICATION COMPONENT: ACAC
COMPANY CODE: HIL
LAST DAY OF THE PERIOD: 30.6.23
ACCRUAL OBJECT: SELECT THE DOCUMENT NUMBER CREATED IN 1ST STEP
SELECT DISPLAY RESULTS LIST RADIO BUTTON
DESELECT TEST RUN CHECK BOX
SELECT EXECUTE BUTTON
RESULT: WE GET POSTED DOCUMENT NUMBER
TO SEE POSTED ENTRY GOTO EDIT ACCRUAL OBJECTS

10. 3.EDIT ACCRUAL OBJECTS (ACACTREE02)
ACCOUNTINGFINANCIAL ACCOUNTINGGENERAL LEDGERPERIODIC
PROCESSINGACCRUALS MANAGEMENTMANUAL ACCRUALSEDIT ACCRUAL
OBJECTS
COMPANY CODE:HIL
SELECT EXECUTE BUTTON
SELECT 0RENTING FOLDER
SELECT ZRENT FOLDER
KEEP THE CURSOR ON LINE ITEM AND CLICK
SELECT POSTINGS TAB
DOUBLE CLICK ON DOCUMENT NUMBER
CONCLUSION: EVERY MONTH END WE HAVE TO RUN PERIODIC POSTING RUN
(ACEPOSTINGRUN)