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SAP Accounting powered by SAP HANA – Moving controlling and finance closer together

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New users have traditionally struggled to understand the way SAP separates Financial Accounting and Management Accounting where most legacy systems see the two as one. While it’s easy enough to understand how a payroll account flows from the profit and loss statement into cost center accounting because the account information stays the same, the situation becomes more challenging as a revenue account flows into profitability analysis and is transformed into a value field, or a cost of goods sold account becomes multiple value fields depending on the cost components involved. In its latest product release, SAP is bringing the two worlds closer together. In this session we’ll look at how SAP is addressing these issues with its new product SAP Accounting powered by SAP HANA, part of SAP Simple Finance. This presentation will delve into how the requirements for internal and external reporting are converging and how this convergence impacts SAP Controlling.
This session will cover:
*Changes to report revenue and cost of goods sold by the CO-PA dimensions and how break out the cost of goods sold into multiple accounts
*How overhead is captured and allocated either from cost centers to CO-PA dimensions (assessment) or from high-level to lower-level CO-PA dimensions (top-down distribution)
*The underlying architecture and how FI and CO line items are linked.
*New reports that visualize the transformation of expense into cost of goods sold, work in process, and assets under construction
*How the period close process has been accelerated in SAP Controlling
Get a sneak peak at the first planning applications that allow you to plan costs according to the new paradigm of SAP Simple Finance, where the account is the leading dimension for all accounting activities.

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SAP Accounting powered by SAP HANA – Moving controlling and finance closer together

  1. 1. SAP Accounting powered by SAP HANA – Moving Controlling and Finance Closer Together © 2014 ERP Corp. All rights reserved. Janet Salmon SAP AG
  2. 2. Introduction 3 • The vision for SAP Accounting powered by SAP HANA • SAP Accounting powered by SAP HANA – No More Aggregates • A Common P&L: Linking FI and CO line items • Account-based CO-PA: • Changes to report revenue and cost of goods sold by the CO-PA dimensions • Enhancements to provide the necessary detail • Allocations and Top-Down Distribution: • How overhead is captured and allocated from cost centers to CO-PA dimensions • Top-Down distribution to disaggregate revenues and costs • Work in Process: New reports and new approaches at period close
  3. 3. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances, and Results Analysis • Summary 4 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  4. 4. Hasso Plattner and Real-time Business One atomic copy of data for Transactions + Analysis, all in Memory Cache VS  Eliminate unnecessary complexity and latency  Less hardware to manage  Accelerate through innovation, simplification + in-memory Transactions + Analysis + Acceleration processes separated  3 copies of data in different data models  Inherent data latency  Poor innovation leading to wastage SAP HANA (DRAM) Transact ETL Analyze ETL A Common Database Approach for OLTP and OLAP Using an In-Memory Column Database Hasso Plattner Accelerate
  5. 5. The Vision for SAP Accounting powered by SAP HANA  One source for financial and management accounting  Beautiful user interfaces  Availability on multiple devices  Line item based and extensible  Not limited by totals or pre-configuration  Fast and flexible  Beautiful user interfaces  Apps for improved quality  Accelerated month-end closing processes and postings  Intra-month processes and simulations  Consolidation methods on the fly  Basis for comprehensive Consolidation  No data replication necessary * planned
  6. 6. Three Financial Offerings Today … SAP ERP Finance Client SAP Business Suite Finance Finance incl. AnyDB Business Suite on SAP HANA Client SAP Business Suite Accelerators SAP HANA DB BW Financials Add-On for SAP Business Suite powered by SAP HANA Client ERP Business Suite Financials Add-On SAP HANA DB BW Apps EhP 7 EhP 7 Apps Any DB Based on InMemory Technology (e.g. HANA)
  7. 7. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances and Results Analysis • Summary 8 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  8. 8. Materialized Aggregates (Totals and Index Tables) Real World Process e.g. Invoice FI Document CO Document Totals & Indices Financial Accounting Pre-Defined Aggregates Totals & Indices Management Account. ERP Financials any classic DB Financials powered by HANA Stability Processing Analytics Real World Process e.g. Invoice FI Document CO Document Flexibility Processing Totals for Financial Accounting HANA views on the fly Totals for Management Accounting Flexibility Stability Analytics http://www.saphana.com/community/blogs/blog/authors/D000002 • Data Redundancy • Reconciliation Effort • Minor Flexibility • Higher Throughput • Reduced Reconciliation • Higher Flexibility • Reduced Data Volume • High Performance
  9. 9. Avoiding Redundancy in FI: Non Disruptive with Equally Named Views For Previous Total/Index Tables 10
  10. 10. Views Replace DDIC Tables (GLT0) • ABAP Programs that previously read table GLT0 now select directly from BSEG • Back up tables (GLT0_BCK) are used during the migration progress
  11. 11. Avoid Redundancy in CO • Non-disruptive with equally named views for previous total tables
  12. 12. Views Replace DDIC Tables (COSP) • ABAP Programs that previously read table COSP now select directly from COEP • Back up tables (COSP_BAK) are used during the migration progress and for non-redundant data, e.g. commitments
  13. 13. Other Aggregates: Summarization Reports • Summarization reports are used to summarize values according to hierarchical structures defined by your organization. • This makes it possible to analyze values and quantities at higher levels, such as at plant level • A summarization hierarchy is used to summarize the values of the following objects: • Maintenance and service orders • Internal orders • Projects • Sales orders and their items • Manufacturing orders, QM orders, and PCC
  14. 14. Summarization: Before and After Goal: Remove VD* objects from tables Goal: Aggregate along hierarchy on the fly
  15. 15. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances, and Results Analysis • Summary 16 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  16. 16. Reducing Reconciliation: Logical Document Balance Sheet Accounts Profit and Loss Accounts e.g. Payroll, COGS, Revenue Primary Cost Elements e.g. Payroll by Cost Center, COGS & Revenue by CO-PA Dimensions Secondary Cost Elements e.g. profit center boundaries are crossed One to one link by line item Secondary Cost Elements e.g. no change to profit centers Real Time Integration Accounts Account extended by CO dimension(s) Different account granularity Switch in account structure
  17. 17. Harmonized Internal and External Reporting SAP ERP Financials – Postings to FI and CO Management Accounting CO line item nr. 123 Cost element: 400000 100 DR Cost center: A FI line item nr. 10 Vendor: 4711 100 CR Cost account: 400000 100 DR - MM PP SD HR Header Table COBK Line Item Table COEP Header Table BKPF Line Item Table BSEG Financial Accounting No link between FI and CO line items in SAP ERP MM = Material Mgmt SD = Sales & Distribution PP = Production Planning HR = Human Resources 1:1 Cost and revenue relevant postings create line items for P&L accounts in FI and cost elements in CO. FI line items are often aggregated compared to CO line items. Even if posted with the same granularity, there is no link on line-item level. This makes reconciliation of FI versus CO difficult. FI and CO documents are only linked on header level.
  18. 18. Harmonized Internal and External Reporting SAP Accounting powered by SAP HANA – Postings to FI and CO CO line item nr. 123 Cost element: 400000 100 DR Cost center: A FI line item nr. 10 Vendor: 4711 100 CR Cost account: 400000 100 DR MM PP SD HR Header Table COBK Line Item Table COEP Header Table BKPF Line Item Table BSEG Management Accounting Financial Accounting 1:1 NEW 1:1 Same granularity of line items and 1:1 link in Smart Accounting With SAP Accounting powered by SAP HANA, the FI and CO line items are stored on the same level of granularity and are linked 1:1. This facilitates an easy reconciliation and drill-down to full detail in reporting.
  19. 19. Extensions to the CO Line Item Table (1) • COEP line items contain a link to the source line item in FI (profit and loss items) or to the real-time integration postings in FI
  20. 20. Harmonized Internal and External Reporting SAP Accounting powered by SAP HANA – CO and Account-Based CO-PA MM PP SD HR Header Table COBK Line Item Table COEP CO line item nr. 123 Cost element: 800000 100 CR CO-PA Object No. 4711 BKPF BSEG FI line item nr. 10 Receivables 100 DR Revenues (acc. 800000) 100 CR Header Table Line Item Table Management Accounting Financial Accounting NEW CE4xxxx Account-based Profitability Analysis (CO-PA) CO-PA Object number: 4711 Material: F-01 Material group: FERT Sales org.: S001 NEW Each CO line item for primary postings includes a consistent object number from CO-PA for improved multi-dimensional P&L reporting.
  21. 21. Extensions to the CO Line Item Table (2) • COEP line items contain a link to the CE4 table where the CO-PA dimensions are stored. • COEP line items break out the CO object number by account assigment for easier reporting.
  22. 22. Reporting – Architectural Overview Reporting Interfaces Embedded BW (queries) HANA Views on Financials Logical Document BSEG/ BKPF COEP/ COBK CE4SFIN Crystal Reports Analysis Office Fiori Apps . . . Financials Logical Document Master Data
  23. 23. Sample Report: Income Statement
  24. 24. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances, and Results Analysis • Summary 25 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  25. 25. Types of Profitability Analysis 26 • Profitability Analysis prior to SAP Accounting powered by SAP HANA Costing-Based Value Fields Revenue 1,000,000 Sales Deductions 100,000 ------------ Net Revenue 900,000 Variable Mat. Costs 400,000 Variable Prod. Costs 190,000 Production Variances 10,000 ------------ Contribution Margin 1 300,000 Material Overhead 50,000 Production Overhead 50,000 Contribution Margin 2 200,000 Res & Development 10,000 Marketing Costs 50,000 Administrative Costs 40,000 ------------ Contribution Margin 3 100,000 Account-Based Cost/Revenue Elements 800000 Revenue 1,000,000 808000 Sales Deductions 100,000 ---------- Net Revenue 900,000 893000 Cost of Goods Sold 690,000 231000 Price Difference Account 10,000 651000 R & D Costs 10,000 671000 Marketing Costs 50,000 655000 Administrative Costs 40,000 ---------- Operating Profit 100,000
  26. 26. Changes to Cost of Goods Sold, Variances & CO-PA Quantities Cost of Goods Sold posting > Split by Cost Components Variance Posting > Split by Variance Category Additional Quantities with BAdI Logic
  27. 27. Split of COGS Based on Standard Cost Components • Result in FI/CO (delivery quantity 1 pc) Costing: • CO document incl. split in fix: 2
  28. 28. Multiple Quantity Fields in the Line Item Tables • Quantity settings: • Three new fields in COEP -> BADI for populating fields 2
  29. 29. Split of Price Differences Using Variance Categories • Variances (delivery with SP3): • account 1 • account 2 Standard posting would be: New posting logic with CO-PA Object: 3 GBB AUA 100 PRD PRF 100 GBB AUA 100 PRD PRF 100 Link each line to one account Account 1 70 Account 2 30
  30. 30. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances, and Results Analysis • Summary 31 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  31. 31. Assessment Cycles in Account-Based CO-PA 2 = account-based Amount field used in combination with cost elements on sender tab
  32. 32. Top-Down Distribution in Account-Based CO-PA Amount field used in combination with cost elements in selection criteria 33 Top-down distribution in account-based CO-PA has been available since 4.7
  33. 33. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances, and Results Analysis • Summary 34 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  34. 34. SAP Accounting powered by SAP HANA - WIP Analysis • Work in Progress (WIP) • WIP positions are now available with a higher granularity that shows the underlying primary and secondary costs • The analysis is achieved by linking GL WIP line items with settlement line items via the order number in the GL line item.
  35. 35. Period Close Processing Old Code Pushdown ABAP Select valid orders Select orders data Loop each orders Do aggregation Do calculation DB update Endloop UI display ABAP Select valid orders HANA Do calculation DB update UI display Select orders data Do aggregation for all orders Loop aggregated data Endloop
  36. 36. Code Pushdown Approach Results Analysis for Sales Orders KKAK KKAKH
  37. 37. Optimized Period Close Transactions 38 • Settlement (plant selection) CO88 -> CO88H • Settlement (make-to-order sales orders) VA88-> VA88H • Settlement (internal orders) KO8G-> KO8GH • Settlement (projects) CJ8G -> CJ8GH • Results Analysis KKAK -> KKAKH (POC method or revenue-based) • WIP Calculation at Actual Costs KKAO -> KKAOH • Variance Calculation w. Full Settlement KKS1-> KKS1H • Variance Calculation for Cost Centers KSS1-> KSS1H
  38. 38. Topics • SAP Accounting powered by SAP HANA • Removing Redundancy • Reducing Reconciliation Effort • Why Account-Based CO-PA? • What Happens to the Allocations? • WIP, Variances, and Results Analysis • Summary 39 Start of first section: List the main points in your presentation and insert this slide at the start of each new topic. Move the highlighted box down for each new section. This divides your presentation into easy to follow sections.
  39. 39. Resources • SAP Accounting powered by SAP HANA - Frequently Asked Questions Blog Post • http://www.erpcorp.com/sap-controlling-blog/entry/sap-accounting- powered-by-sap-hana-frequently-asked-questions • Janet Salmon, Controlling with SAP – Practical Guide • ISBN-10: 978-1-4932-1012-1 • https://www.sap-press.com/controlling-with-sap-practical-guide_ 3625/ • Janet Salmon and Ulrich Schlueter, SAP HANA for ERP Financials • ISBN: 978-3-943546-97-2 • http://shop.espresso-tutorials.com/Gedruckte-SAP-Buecher/SAP-HANA- fuer-ERP-Financials-2-Auflage::35.html • http://help.sap.com/sfin100 40
  40. 40. Five Key Ideas • SAP Accounting powered by SAP HANA is a new product with a new code line designed specifically for use with SAP HANA • General availability began on August 1, 2014 • SAP Accounting powered by SAP HANA uses the line items instead of the totals tables, allowing for faster updates and removing redundancy • SAP Accounting powered by SAP HANA links the FI line items with the CO line items to give a complete profit and loss statement containing all relevant reporting dimensions 41
  41. 41. Five Key Ideas (cont.) • SAP Accounting powered by SAP HANA focuses on account-based CO-PA for reconcilability, but you can continue to use costing-based CO-PA to meet other business requirements • SAP Accounting powered by SAP HANA significantly improves the period close by offering new transactions for settlement, WIP calculation, variance calculation, and results analysis 42
  42. 42. Questions • Now: • Ask questions now for immediate answers • Later: • Janet.dorothy.salmon@sap.com 43 Q&A
  43. 43. Disclaimer SAP®, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP® products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. ERP Corp is neither owned nor controlled by SAP.

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