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ECC Vs S/4 HANA in Finance Module

Updated: Jan 19, 2023

First of all ,lets get to basics..

What is SAP FICO?

SAP FICO stands for Financial Accounting (FI) and Controlling (CO), it is an important module in SAP ERP. The purpose of this module is to help business organizations generate and manage financial statements for analysis and reporting which helps them in better decision making and business planning. SAP FICO works on ECC i.e. ERP Central Component.

It's Purpose:-

SAP FI is used for external reporting(basically to the Government) consisting of Balance sheet, P/L Statement , while CO module deals with internal or management reporting.

Sub Modules in SAP-FI

1. General Ledger Accounting

2. Accounts Payable

3. Accounts Receivable

4. Banking

5. Asset Accounting

Sub Modules in CO

1. Cost Element Accounting

2. Cost Center Accounting

3. Internal Orders

4. Management

5. Product Costing

6. COPA ( Profitability Analysis)

What is SAP S/4HANA Simple Finance?

SAP S/4 HANA Simple Finance is the financial and accounting component of SAP Business Suite for HANA. It runs only on SAP HANA's in-memory platform (HANA database) which allows users to run real time reports on financial and operating data using BI tools.

What's changed SAP FICO (ECC) Vs SAP S/4 Hana Simple Finance

1. Technological Difference:

(a). SAP ECC can run on databases like Oracle, IBM DB2 etc. whereas SAP S/4HANA SF is based on SAP HANA database.

(b). HANA is superfast due to its In-Memory Computing, Columnar Database, Multicore processing and Powerful Calculating Engine.

(c). In S/4 HANA OLTP(Online Transaction Processing) and OLAP(Online Analytical Processing) capabilities are present in single system . Hence read/write operations and real-time analysis can be done simultaneously.

2. Functional Difference:

S/4 HANA has an edge over ECC due to following reasons:

(a). FIORI -the new GUI- Focuses on flexible app style development , interactive and can even work on mobile phones. So easy to use -click/copy/paste link in browser > login with credentials > get into system.

(b). Universal Journal- Also referred to as ' Single source of truth'. Data from all modules such as FI ,CO, COPA, ML & Asset Accounting is stored in this single line item table called ACDOCA- Accounting Document Actual. This table is referred to as Universal Journal. It helps in data integration a single location i.e centralized processing ,hence is faster.

Image credits to itpfed.com

(c). FI & CO are merged very efficiently , to make a document posting Controlling area setup has to be enabled. Further General Ledger Accounts(FI) and Cost Element(CO) are mapped together in a way that cost elements(both primary and secondary ) are part of G/L accounts.

(d). Customer-Vendor Integration - In S/4 HANA Both are now integrated/interlinked as Business Partners, and is a mandatory setup .Earlier in ECC separate vendor master and customer master had to be created.

(e). New Asset Accounting - Here there is no need to setup delta depreciation areas where additional accounting principles are present. Real time update of asset (depreciation) whenever master data gets changed/modified. Also screen of depreciation run was simplified in S/4 HANA.

(f). Cost element accounting- There is no separate cost element master data in S/4 HANA, it is merged with G/L.

(g). In S/4 HANA ,a new feature of 'Budgeting' in cost center has emerged, which was not present in earlier versions.

(h). COPA- In S/4 HANA , SAP recommends Accounts based CO-PA.

(i). The efforts of running multiple transactions as a part of MEC ( Month End Closing) are reduced.

(j). Simple Finance supports both account based and cost based profitability analysis. The S/4 HANA account based approach uses the Universal Journal to calculate real-time cost of goods sold (CoGS) which allows deep study of profit and loss centers based on different contribution margins.

Happy SAP learnings with Sastrageek Solutions..

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