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Aleks_Kubanski
Product and Topic Expert
Product and Topic Expert

Introduction & What to Expect.


Welcome, fellow SAP S/4HANA Cloud adventurers, to the labyrinth of initial system setup & configurations, where the wrong turn might just lead you straight to the system re-provisioning pit.

During my 5 years of being in the SAP S/4HANA Cloud delivery team – I’ve led, supported, overseen, or been involved in more than 20+ projects as a Project Manager. And I’ve found these initial systems setup steps to be like playing a high-stakes game of chess, but instead of pawns and knights, you're maneuvering through fiscal year variants and group currencies, hoping to avoid that checkmate move.

So, join me on an exploration of the pivotal configuration aspects within your SAP S/4HANA Cloud systems. In this blog post, we'll delve into the minefield of potential pitfalls that, when overlooked or misconfigured, could prompt the need for a system re-provisioning. Understanding and pre-emptively addressing these pitfalls can safeguard against disruptions, ensuring a smoother and more efficient Implementation.

The main purpose of this blog is to highlight these areas that can result in the need to re-provision the system, which is a non-desirable outcome that can cause days of delays to a project, as well as completely wipe out progress made within the system. This blog will not be aiming to provide a detailed overview of these topics nor to describe the available configuration options within S/4HANA Cloud, however, there will be links and references to other blog posts and documentation that do give that level of detail.

Here are the main areas that you don’t want to misconfigure or forget during your system setup:

  • Group Currency

  • Fiscal Year Variant

  • Ledger Scenario Setup

  • Group Valuation [5W2]

  • Fixed Assets – Additional Depreciation Areas [5HG & 5KF]

  • Organizational Structure


1) Group Currency


Your group currency is one of the first things you’ll have to specify before you provision & set up your Development and Test Systems, so it is a pre-activation requirement. It is required in order to generate your group-level reporting in a single currency (of choice) deriving from all the available company codes in your system.

Get this wrong and you get a fast-track ticket to the system re-provisioning show.
Learn more about Group Currency via Currencies in SAP Help or through this blog post on Currency Options in SAP S/4HANA Public Cloud

2) Fiscal Year Variant


Fiscal year variants define the relationship between the calendar year and the fiscal year in SAP S/4HANA Cloud, much like synchronized gears in a clockwork masterpiece. Just as each gear's alignment dictates the precise movement of time, choosing the right fiscal year variant orchestrates the symphony of financial timelines within the SAP universe, ensuring that reporting and financial cycles march in perfect harmony. Get this wrong and you’re certainly steering the ship towards the murky waters of system re-provisioning.

Both the Fiscal Year Variant and the Group Currency fall under the category of "Primary Finance Settings" which the system will require you to specify and confirm your choice.




Avoid getting this wrong by learning more about it via SAP Help for Fiscal Year and Fiscal Year Variant relationship

3) Ledgers Setup


Ledgers form the bedrock of reporting and financial statements in accounting, acting as the meticulously organized shelves in a library. Just as these shelves store and categorize books for easy reference, ledgers organize transaction data and journal entries within SAP, facilitating the structured retrieval and compilation of financial information for accurate reporting and analysis.

You have good flexibility in SAP S/4HANA Cloud in terms of the ledger scenarios and combinations available. However, there are 2 aspects that you need to be mindful of:

3.1) Once initial scoping is confirmed & complete – you cannot delete or add, nor activate or de-activate your ledger scoping settings. (E.g. if you’ve missed activating Scope Item 2VA for US GAAP or 1GA for IFRS, then you cannot activate them afterward)

Get this wrong and you are rewarded a special VIP front-row seat to watch your systems get re-provisioned to make a correction.


3.2) Once you’ve set up your ledgers and postings have been done in the system – you cannot change the ledger setup/accounting principle. (The local ledger is the leading ledger by default and if you’d like to change that you should do so prior to doing any postings)

If there are postings in your system, you can delete those by using the job template Reset Transaction Data from the app Schedule Accounting Data Corrections

Learn more in SAP Help about choosing the right Ledger Combination for your Business Needs or check these blog posts on Ledger scenarios available within SAP S/4HANA Cloud as of 2302 and an in-depth overview of the Ledger Scoping in S/4HANA Cloud Q&A


4)
Group Valuation [5W2]


This newly introduced scope item is related to the activation of an additional ledger to store a consolidated view of the transactions relating to intercompany business. Currently, it can only be activated by net new customers --- during the initial scoping, and more importantly, before the initial scoping is actually confirmed.
This scope item comes with a myriad of benefits, but also restrictions in terms of countries that are not supported and scope items that are not compatible. Before making a decision on this - please familiarize yourself thoroughly with note 3093830 – SAP S/4HANA Cloud: Release Restriction Note for Group Valuation – SAP for Me.

Please note that this scope item, once activated, will be automatically applied across all legal entities.

To activate this, you have to create a CBC project for the respective tenant (e.g. Dev. Customizing) that you’d like to activate this scope item to and you need to request the activation of this scope item via ticket/incident while providing the CBC project name. Furthermore, scope items can only be added when the project is in the Scope and Organizational Structure Phase (as explained in this note - https://me.sap.com/notes/3122430).

Should you wish to activate this scope item after the initial scoping is complete – the success would be nearly the same as boarding on your flight if you've forgotten your passport / ID card while at the airport security check. Re-provisioning awaits you.


5) Fixed Assets – Additional Depreciation Areas


As of release 2308, you can activate the following 2 scope items to add an additional depreciation area:

5HG – Asset Accounting – Additional Depreciation Area

5KF – Asset Under Construction – Additional Depreciation Area

However, if you do not activate these scope items during the initial scoping process they can no longer be activated after that. Meaning that the sentence for overlooking this detail is serving system re-provisioning time. For more information – see note 3377871 - Activate Scope Items 5HG and 5KF.

6) Organizational Structure


The structure of your business will be mapped to your SAP S/4HANA Cloud system via your organizational structure. The organizational structure is composed of organizational units that include your legal company entities (company codes), sales organization, sales area, purchasing organization, plants, storage locations, and a few other elements that you can explore in SAP Help for Creating an Organizational Structure

Be mindful! While an error in the setup of the organizational structure may not be detrimental in the same way as with your Fiscal Year Variant or Group Currency, since you can always add additional entities – you still want to make sure you have a clear mapping of your org. structure in order to avoid data inconsistencies or redundant elements after the activation of content.

You can add additional entities or define relationships between units before the initial content activation. However, once you have created an entity, you cannot delete it. See note 2780957 - Wrongly created company code in S/4HANA CLOUD

Summary & Conclusion


Avoiding these missteps is vital to ensuring a harmonious and stable start of your SAP S/4HANA Cloud Implementation project without disruptive setbacks. Hope you've found this valuable and curious to hear of other similarly intricate elements that you have encountered!
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