Manual Accrual Engine Sep by step Configuration process in SAP S4 Hana-Part1

[rajeswari123]

Manual Accrual Engine Sep by step Configuration process in SAP S4 Hana-Part-1

[rajeswari123 · Accepted solution]

Accrual Management

• Accrual postings to the 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’.

S4 Hana Accruals supported by Accrual Engine:

• Manual Accruals: You enter the data of the business transaction to be accrued or load into Excel the corresponding data to the Accrual Engine. The system calculates the amounts to be accrued.

• Purchase Order Accruals: The required data is taken from the Materials Management module, transferred to the Accrual Engine, and automatically/Manually converted to accrual items based on the configuration. The system calculates the amounts to be accrued.

Advantages of S4 HANA Accrual Engine

1. Is optimized for S/4HANA

• It is fully integrated into the General Ledger.
• The functions in Manual Accruals support the use of parallel valuation methods. This means that you can calculate and post accruals according to different accounting principles simultaneously.
• All currencies of General Ledger are supported.
• 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• No reconciliation effort any more with G/L: Transaction ACACTRANSFER ‘Transfer of ACE Docs to Accounting’ is obsolete.

2. 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 Transaction ACACCARRYFORWARD is obsolete.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.

3. 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.

Accrual Item Types – Different types of Posting: Mainly we use below 3 Types.

COSTS -referred by Accrual Item Type IP.

ACCR_PER- referred by Accrual Item Type PP.

COSTS_UPLD-Referred by Accrual Item Type FP.

· IP – Opening/Initial Posting
-When we upload the excel file an accrual object is created.

-The total amount can be calculated and distributed to all the periods based on the method and start and end period which we updated in the excel file and posted FI Document.

· 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.

-In simple and short We are telling the system that this is the final posting and we are not going to run the accruals every month as defined in the start of life and end of life. We are ending the accruals in the middle of the posting period end of life.

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 posting periods automatically.
• UPLD_AMNT – Use amount that was uploaded into the Accrual Engine manually.

There are other methods as well. But we are using above 2 methods for our demo.

Configuration Details and main Transaction codes that we use in Accrual Engine.

To use the functions in Manual Accruals, you need to make extensive Customizing settings via the menu path Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions >Accruals Management>Basic settings> and then the associated paths below.

Steps to set up the periodic accrual engine flow

Step1: Set Application Component to be Customized.

Step 2. Assign company code to the S4 HANA accrual engine

• Assign the company code for which accrual engine must be activated.

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• Step 3. Close fiscal year for changes to Accrual objects

  • Mention the year for which accrual objects is not required to be change.

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  • Step 4: Define Accrual Line item type.

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  • As part of our test demo we have made many config changes to Item types as below get the expected output. If needed please select "upld allwd" check box.

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  • If you want to use excel upload functionality, ‘Upld Allwd’ checkbox must be ticked.

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  • Next step will be continued in part 2.