SAP Community - FIN (Finance)

FI-AA: Possible Issues Post S/4HANA Transition

2026-01-31T07:31:11.033000+01:00

This blog is to share a few things that were experienced in a S/4HANA - post Project transition and the way it was resolved, successfully. Might be helpful for someone encountering a similar issue.

Fixed Assets:

Once the S/4HANA migration is fully completed say from ECC and later when a new Company Code is directly created in S/4H environ, the Asset module requires some adjustments.

Assuming there is a Chart of Depreciation already existing for a specific Country / Company Code and the new Company Code also requires to be assigned to the existing COD, system does not allow the same. Despite the fact that multiple Company Codes can be assigned to a single Chart of Depreciation, as per standard model.

We might face errors in multiple transaction codes like 'FINSC_LEDGER', 'FAA_CMP' etc. (owing to currency related settings).

Therefore, to overcome this scenario, SAP recommends creating a new Chart of Depreciation and assign the new Comp Code to the same. In addition, a few more settings are also required, as given below.

Check and update transaction Codes 'OADB','OADC' and under SPRO: Asset Accounting > General Valuation > Currencies > Specify the Use of Parallel Currencies

The Screen Prints are just for representation purposes only 😊.

In this regard, please find a link to SAP OSS Note - https://me.sap.com/notes/2882574/E (2882574 - Message ACC_AA116 for a new company code created in SAP S/4HANA)

The note clearly states "currently, there is no other solution available in FI-AA".

Balance C/F - FAGL-GVTR:

Another error could be encountered during Balance carry forward. This could be due to a missed sequence in close process, by a user. Please find link to SAP OSS Note - https://me.sap.com/notes/3630930 (3630930 - Error in transaction FAGLGVTR although the fiscal year was successful carried forwarded in asset accounting) The note describes further:

Quote: " error message AA594 is issued for each processed asset in the balance carryforward (Errors occurred for asset 1780 60603514-0 in fiscal year 2026). This error message is the information that postprocessing activities (-> AFAR) are necessary.

Nevertheless, at the end, you receive the information:
CCode XXXX Fiscal year change 2026 performed, postprocessing necessary." Unquote.

The note is pretty useful and guides well.

Depending on the Product and support pack level, there are more notes available to guide on the BCF related issues. Reproducing below, excerpts from one common note; link to OSS.

Hope you find the information useful. Thanks for your comments and feedback.

To view my other blogs, please follow the link.

Regards,
J. Swaminathan

Find all the Finance learning content!

2026-02-02T12:41:26.247000+01:00

Hi all!

I would love to make you all aware of the excellent blog post by our Finance Learning Portfolio Manager @Doris_Lindauer. In it you will find all our current learning offerings in the Finance area and you can also see which are new in the comments section!

Your Guide to Free Learning Journeys on SAP Financ... - SAP Community

You can add feedback on the original blog post or here as well!

New SAP Learning Insights podcast episode with Stefanos’ Finance Update is live now!

2026-02-03T12:43:26.599000+01:00

In this episode, David Chaviano met again with Stefanos Pougkas from SAP to talk about the evolution of SAP's financial offerings. They explore the core functions of SAP Financials, the shift to SAP Public Cloud solutions, and the importance of foundational accounting knowledge for newcomers. Stefanos highlights the impact of AI on automating financial processes and encourages embracing a fit-to-standard philosophy in cloud environments. We conclude by discussing the future of finance consultants amidst evolving market demands, offering valuable insights for anyone looking to excel in SAP finance. And of course, at the end of the episode, Stefanos shares some words of wisdom.

Download transcript

Dive deeper

Further resources

Enjoy listening to this new podcast!

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Understanding the New Tags in the SAF-T Poland VAT Report (JPK_V7M(3) and JPK_V7K(3))

2026-02-04T09:47:39.960000+01:00

Poland's tax reporting landscape is evolving, and SAP has introduced new tags in the Standard Audit File for Tax (SAF-T) structures JPK_V7M(3) and JPK_V7K(3) to help businesses stay compliant with the country's electronic invoicingrequirements.

Understanding the Four New Tags

In this blog article, we' ll explain what the new tags mean and how to use them, along with examples to make things clearer.

The new structures JPK_V7M(3) and JPK_V7K(3) of the Polish SAF-T VAT report now include the following tags designed to simplify the reporting process:

"NrKSeF": This tag is the KSeF Reference Number, which serves as an identifier for invoices in the National e-Invoice System (KSeF).

"OFF": Use this tag for invoices referred to in Article 106nf(1) of the act that don't have a KSeF identification number and haven't been submitted to KSeF.

"BFK": This applies to either electronic or paper invoices not categorized as e-invoices by KSeF, for example in cases where it’s not mandatory to issue invoices using the National e-Invoice System.
"DI": Represents any proof of transaction other than an invoice issued through the KSeF. This applies to all other cases of documents that will not have a KSeF number, have not been sent to KSeF and can’t be categorized as ‘BFK’ or ‘OFF’.

Examples

To help companies meet the new standards, let's look at examples of where these tags are applicable.

The ‘NrKSeF’ Tag

Use the "NrKSeF" tag when there's a KSeF Reference Number for an invoice. This number identifies the invoice within the National e-Invoice System. For example, if you're processing an invoice registered in KSeF, you should tag it with the appropriate "NrKSeF" number.

Complete this field if, as of the date of submission of JPK_VAT, the invoice has been assigned a KSeF number.

The ‘OFF’ Tag

Apply the "OFF" tag to invoices referred to in Article 106nf(1) of the act that don’t have a KSeF number as of the date of submission of the records.

This designation applies to invoices issued during the period of malfunction of the National e-Invoice System, according to Art.106nf(1). This designation indicates that, due to the inactivity of this system, the invoice does not have a KSeF identifying number as of the date of submission of the JPK_VAT.

If an invoice exists in e-Document processing but still lacks a KSeF Reference Number, mark it as "OFF".

The ‘BFK’ Tag

The "BFK" tag is for invoices not handled by KSeF, such as paper invoices, vendor invoices for foreign transactions or invoices with document types that are excluded from KSeF. This category also includes invoices from cash registers, invoices from consumers in B2C relations issued outside of KSeF, invoices for financial services using KSeF exemption, etc.

This tag allows you to indicate transactions that for various legal reasons fall outside of the KSeF.

If the document is not marked with DI, OFF or KSeF th en it is reported by JPK_V7K(3) and JPK_V7M(3) with status BFK.

The ‘DI’ Tag

Use the "DI" tag for all other documents that serve as transaction proofs but are not an invoice and do not qualify as ‘OFF’ or ‘BFK’.

For example, daily reports from cash registers, internal documents, customs documents, or other accounting documents.

Invoices issued in the offline24 mode must also be tagged with the ‘DI’ tag.

DI should be also assigned to invoices, which should be registered in KSeF, but due to different reasons cannot be registered. This may happen in the initial period applicable with KSeF, when for various reasons, mainly technological and configuration ones, the taxpayer is unable to register the invoice in KSeF, but will have to forward it to the business partner.

With SAP Document and Reporting Compliance you can select for which type of transaction DI is relevant. See the example below.

Why This Matters

These tags help you accurately categorize your transactions, ensuring compliance with Polish tax regulations while reducing reporting errors.

You can also find detailed information about the changes in the JPK_V7M(3) and JPK_V7K(3) structures in the Regulatory Change Manager.

For detailed guidance on implementing KSeF requirements in your SAP system, check out the related blog articles.

How Official Document Numbering helps to fulfill the Polish KSeF Requirements in S4HANA Public Cloud

How you can manage Polish KSeF Requirement in SAP S/⁠4HANA Cloud Private Edition & SAP S/⁠4HANA

How to store long Supplier Invoice Reference Numbers in SAP S/4HANA ERP Products

Staying updated with the latest legal changes is essential for navigating the ever-evolving taxation landscape. By understanding how to use these tags, you can ensure compliance with national regulations, reduce errors, and streamline your tax processes.

Paying with stablecoins in B2B scenarios - business process end-to-end

2026-02-09T14:20:00.018000+01:00

As an SAP S/4HANA user, you can pay your suppliers with stablecoins. Or receive payments in stablecoins. Key to it is SAP Digital Currency Hub. Here's a process-focused perspective on it.

Paying Supplier Invoices

Assuming your company is using SAP Digital Currency Hub, it's as easy to pay with stablecoins as paying the way you are used to: as an accounts payable accountant, you do a payment run. A dedicated payment method (you could use D for digital) would find all supplier invoices for business partners accepting stablecoins.

Payment Run in S/4HANA

Once the payment is released, it is sent via SAP's Multi-Bank Connector to the SAP Digital Currency Hub (DCH), which initiates payment immediately. It interacts with your custody provider, to process the stablecoin payment, and confirms execution of the payment, allowing to clear the payable in your accounts.

SAP Digital Currency Hub - Outgoing Payment

SAP Digital Currency Hub - Blockchain Transaction

Additionally, when doing the payment run, you should send a remittance advice from your ERP system, using the established ways like email or direct integrations, to the other party, detailing the payment's purpose.

Receiving Payment for Receivables

Assuming, you have communicated a dedicated destination address to your customer, they will direct their payment to it. SAP Digital Currency Hub communicates permanently with your custody provider to check for incoming payments on the blockchain networks. Once a payment is received, the address used tells, who has paid. Together with the payment date and amount, the customer's ID is reported back to your S/4HANA as an incoming payment.

As the currently used stablecoin format definitions (ERC-20) do not support fields like "note to payee" or "payment reference", a remittance advice, received on an established channel (see above), will help to reconcile this payment with an open receivable.

Destination addresses are a great way to receive payments. They can be seen as an alias for your wallet's address, generated only for a certain business partner. Hence, all payments received on this destination address can be attributed to them - hence only they know it.

Payment preparation in SAP Digital Currency Hub

As an accountant, you usually do not enter the SAP Digital Currency Hub, which is intended to run as a rather invisible component. Nevertheless, to establish the payment agreement for a business partner, you need to log in.

The payment agreement consists of a set of destination addresses.

Receive-to addresses: For your customer, you will create a dedicated address they have to pay to. Payments received on this address will be attributed to this business partner. So, you need to communicate it to them.
Pay-to addresses: As a customer, you will enter the destination address received from your supplier. You will direct all payments for this business partner to this address.

This allows to identify the payer based on the address he as paid to.

Optional: Replicating Receivables to SAP Digital Currency Hub

Receivables processing can be enhanced by replicating receivables to the hub. When an incoming payment drops in, it will reconcile the open receivable with these transactions. It applies a simple mechanism, determining the business partner by receive-to address (see above), and matching the receivable by amount, based on a FIFO principle. The benefit is enhanced note-to-payee information when the transaction is sent to the ERP solution, allowing instant clearing in accounts receivable.

Summary

Stablecoin transactions are fast, taking only seconds or minutes. They can be used to pay your suppliers, without modification of your ERP system. You only need to set-up a dedicated house bank account and a payment method, and to integrate with SAP Digital Currency Hub. Then, existing means like payment runs are used to trigger a payment, and bank statements received from the hub are used to receive payments. The hub itself does not need your attention, only at setup.

Efficient Document Inbound Processing in SAP Cloud ERP with SAP Document AI: March 12, 2026

2026-02-09T21:12:08.498000+01:00

Managing incoming documents efficiently is critical for business operations. SAP Cloud ERP, powered by SAP Document AI, offers pre-delivered use cases to automate and optimize document processing across Sales, Finance, and Quality Management.

In this live session, we’ll explore how SAP Document AI enhances document inbound processing, reducing manual effort and improving accuracy. You’ll see live demos of end-to-end workflows and learn how to activate these capabilities in your system.

Key Takeaways:

Discover pre-built document processing use cases in SAP Cloud ERP.
See live demos of end-to-end workflows for Sales, Finance, and Quality Management.
Learn how to activate and extend these capabilities for your business needs.

Who Should Attend? Project managers, consultants, business users, and administrators looking to improve document processing efficiency.

Register Now!

AI in Management Accounting – We Need Your Input!

2026-02-10T18:47:13.636000+01:00

Dear SAP Community,

Artificial Intelligence (AI) is reshaping management accounting. However, there is often a gap between technological vision and the operational reality of a management accountant’s daily work. To ensure AI is not just a buzzword but a tool that delivers value, we need to understand: Where do the actual challenges in management accounting lie?

SAP investigates together with the Technical University of Munich (TUM) how AI applications can be specifically designed to solve existing challenges in management accounting. We want to identify concrete, value-generating use cases.

To achieve this, we rely on your expertise. Let’s tackle the problems where support is needed most!

Target group: Experienced professionals working within the field of management accounting.
Duration: Approx. 5-7 minutes.
Privacy: The survey is completely anonymous.

We invite you to be part of this study and help shape the next generation of SAP solutions.

Click here to take the survey: https://s.userzoom.com/m/MSBDODgzUzkzMzEg

Thank you for your support and insights!

The Top 5 Things You Always Wanted to Know About Situation Handling

2026-02-11T15:26:17.458000+01:00

Situation Handling let’s you alert appropriate users about critical business issues requiring their attention. If you're curious about how it works or need more details, this blog post is for you. Additionally, we've enhanced our documentation - be sure to take a look here: Documentation.

1) How does it really work?

Situation Handling detects business issues in your systems. The detection works for issues with either business objects or error and warning messages. In the following, these will simply be referred to as “objects”. An issue is typically defined by specific conditions or events happening that are assigned to the objects. – and then, voilà, either a routine daily batch run or business event monitoring identifies the objects with issues.* It can be, for example, an expiring sales contract, an overbooked flight, and many more. This leads to the next question:

2) How do I specify the business issues to be addressed by Situation Handling? How is the setup done?

Let’s understand this first: Situation Handling can detect issues from only one object or between two associated objects. If only one object is involved, that’s quite easy – the object triggering an issue, with certain conditions or events, is the very same object that helps to solve it by changing itself in a specific app. One example would be a sales quotation that has expired and needs to be checked for purchase details in order to get back to the customers.

How two associated objects work: One is usually triggering the situation. For example, the situation is triggered because the object is newly created, extends a certain value, or expires. The other object is the one that needs to be changed because it’s the one affected. This is also called the anchor object, as it “anchors” the situation. For example, a change in the processor may cause a purchasing document item to require a review. Alternatively, missing supplier confirmations make operational purchasers check the schedule lines of purchase order items again.

For the Situation Handling engine to detect situations, it needs to know what to look for. The objects with their conditions, events, and possible mappings between them need to be defined. Your business area may have very specific business issues – we got you covered with a wide range of ready-to-use situation templates. They are called “templates” because elements (like conditions) are predefined, while others (like condition filters or your specific situation texts) can be adapted by you. Just copy a template into your personal situation type and enable it.

I can already anticipate your next question: What if my case is not on the list? No problem at all – with our new framework, you can define all parts of Situation Handling yourself. It’s called “extended framework” because of its extended functionalities.

3) And how do I alert someone? This seems complicated.

I’m not gonna lie, it seems complicated. It’s seems complicated at first, because we’ve provided all the different ways to alert someone that we (and you!) could possibly think of. First, your company’s organizational structure – a lot of customers want to alert specific team members based on their job functions. But we also offer the possibility to alert people depending on the data a situation provides – for example, the creator of a sales order, its processor, or other field values. For more information, check out the documentation.

4) Let me try it 🤩

Now you must be wondering: Can I check this out? Sure – all SAP S/4HANA, SAP S/4HANA Cloud Private Edition, and SAP S/4HANA Cloud Public Edition customers have Situation Handling included. Just assign the “Business Process Specialist” role to your user and open the “Manage Situation Types” app. Our situation template “Sales Order Is Close to Expiry” is auto-activated, which means you can immediately check it out under “Situation Types”.

If you want to try setting up something very simple, we recommend following the test script from SAP Best Practices of our Situation Handling scope item (31N) under “Accelerators”. If you’re more interested in our extended framework, we’ve even built three demo situation templates and our own demo app for creating dummy data. Check it out in this blog post.

5) Uff… I have issues (and I don’t mean my business issues 😫). I did all the setup, and Situation Handling doesn’t seem to work. No one gets alerted.

No worries at all. There’s already a very well-written blog post that provides a lot of guidance.

6) What next?

Interested? Great. We have a lot more to offer.

Let’s get started 😊 Check out all situation templates to see if any fit your business issues. For the setup, check out Getting Started.
Already a pro? Check out how you can improve your Situation Handling by monitoring it and changing certain parameters in this blog post.
Interested in AI? Stay tuned 😎
Need more help with Responsibility Management and alerting relevant users? There’s also a blog post series available.
Start creating your custom use cases (if you haven’t done so already): Blog post

Last but not least: I’m one of your technical writers for Situation Handling. Not only do I provide you with six steps when you only expected five, I’m also always happy to help 🫡This is our documentation (quick link: http://help.sap.com/s4_ce_situationhandling for SAP S/4HANA Cloud Public Edition and http://help.sap.com/s4_op_situationhandling for SAP S/4HANA Cloud Private Edition/SAP S/4HANA) and we love to hear your feedback.

Don’t forget to comment on anything you didn’t get, missed, would have loved to explore further – I promise, we will react! And of course, comment on all the things you liked – then we know what to keep. Thank you 🫶

More questions? Comment on this blog post, and we will try to answer them 😊

@Christiane_Poreski
@angelika_salmen
@sebastian_doeweling
@axel_spriestersbach
@Dr_Joerg_Rett
@Vidya_Shetty1
@NisargaPuttegowda

_____

* For sure, monitoring business events is way more elegant than a batch run, as it catches issues right away (with some delay due to system load though, but still fairly recent). But obviously, not all conditions can be detected through events, so a once-a-day batch run is performed on the objects to identify those with issues. A batch run also has its advantages, for example, it sends controlled information once a day with no spam by frequent events.

CEI Invitation - Shape the Future of Financial Correspondence

2026-02-12T11:37:35.408000+01:00

What is CEI?

SAP's Customer Engagement Initiatives (CEI) platform, found at https://influence.sap.com, empowers SAP customers and partners by offering early access to SAP product developments. As a participant, you have the opportunity to interact directly with SAP product experts to influence future product direction.

Description of Planned Project

Our team manages the "Create Correspondence" and "Display Correspondence History" applications in SAP S/4HANA Public Cloud. We are now exploring how to leverage AI to further automate the financial correspondence workflows and increase operational efficiency.

Project Goals and Activities

Gather requirements and use cases
Identify existing pain points
Validate concepts
Prioritize potential features / processes

🛠️ SAP Product in Focus: SAP S/4HANA Cloud Public Edition
🗓️ Estimated Effort: 1 - 3 hours call with each customer
🗣️ Language: English
📍 Format: Calls, workshops, conferences and usability testing
💡 Expected Outcomes: user-centric, harmonized solution across financial correspondences processes

We’re looking for customers to join us in validating use cases, exchanging ideas, and shaping the potential future of financial correspondence.

👉 Register Now 👈

Registration End on Mar 15, 2026

#SAP #S4HANAPublicEdition #CustomerEngagementInitiative #Finance

Financial Management and Revenue Recognition for Project-based Services - The Blog Collection

2026-02-12T11:47:35.325000+01:00

Introduction

Professional Services organizations increasingly require revenue processes that mirror real project progress. Event‑based revenue recognition enables exactly this: revenue is recorded at the point of value creation—directly triggered by project activities rather than by periodic, manual routines. This approach increases financial transparency, strengthens compliance, and provides project and finance leaders with timely, decision‑ready insights.

By integrating operational events with financial accounting, organizations benefit from simplified period‑end processes, consistent data across finance and controlling, and true real‑time margin visibility at project and portfolio level

Blog Collection

👉The accompanying blog series provides deeper perspective on the concepts, architecture, and implementation approach for event‑based revenue recognition in Professional Services

An Introduction to Event-Based Revenue Recognition with Customer Projects in SAP S/4HANA Cloud

Financial Accounting for customer projects in SAP S/4HANA Cloud: Part 1 Real-time insights in project-based service scenario

Financial Accounting for customer projects in SAP S/4HANA Cloud: Part 2 Enhanced activity confirmation for service industry – including intercompany margin posting

Financial Accounting for customer projects in SAP S/4HANA Cloud: Part 3 professional service industry reporting – including margin per contributing profit center

Financial Accounting for service industry in SAP S/4HANA Cloud: Part 4 market segment reporting based on flexible profit center hierarchies

External Contingent Workforce for Customer Projects

Down payment 4 customer projects in S/4HANA

Advanced WIP reporting in S/4HANA Cloud Public Edition

EBRR Currency Conversion with Spot Rate in S/4HANA Cloud Public Edition

Automatic Loss Handling with Event-Based Revenue Recognition for Projects

Revenue Cap in Event-Based Revenue Recognition: Understanding and Troubleshooting

SAP S/4HANA Cloud, Public Edition for Professional Services. The dynamic EAC in cost based POC fixed-price project.

Customer Projects with T&E Billing & PoC-based Revenue Recognition

Financial Planned Data in Professional Services – by Project Financial Booklet

Deciphering the Functional Mechanics of FYV.

2026-02-13T18:02:30.971000+01:00

Date: February 2026

Author:- Er. Pratik Das (B.Tech, Mechanical Engineering , SAP Functional Consultant ).

Specialization :- MM, SCM Integration & Business Process Optimization.

Target Audience: SAP Functional Consultants (MM,FI), Solution Architects, Financial Controllers & Business Process Owners (BPO), SAP S/4HANA Migration Leads & etc.

In the SAP ecosystem, the Fiscal Year Variant (FYV) is far more than a simple calendar setting; it is the temporal foundation upon which all transactional integrity rests. For a Material Management (MM) Consultant, the FYV dictates the lifecycle of a Material Document, the calculation of moving average prices, and the strict boundaries of period-end closing via MMPV.

When we configure a system for a global rollout—balancing the Western (K4) and Indian (V3) statutory requirements—precision in OB29 is non-negotiable. Misconfiguration here doesn't just result in a ledger error; it can freeze a warehouse’s ability to post Goods Receipts (GR) or Issue Goods (GI).

The Functional Mechanics of FYV :-

The Fiscal Year Variant defines the number of posting periods in a fiscal year and the number of special periods. While the standard is 12 posting periods, SAP allows up to 16 periods in total.

Posting Periods: These correspond to the operational months where day-to-day procurement and inventory movements occur.
Special Periods (13–16): These are strictly for Finance (FI). As an MM consultant, it is vital to remember that logistics movements cannot be posted to special periods. These are reserved for audit adjustments, tax corrections, and year-end closing entries that do not affect physical inventory quantities.

Calendar-Dependent vs. Year-Dependent: The Implementation Choice
Calendar-Dependent (The "Set and Forget" Model)

Used predominantly in Western regions (Standard Variant K4), this configuration assumes the fiscal year is identical to the Gregorian calendar (January 1 to December 31).

Consultant Insight: When "Calendar Year" is flagged in OB29, the system ignores the "Period" and "Day" sub-tables. It automatically knows January has 31 days and is Period 01. This is the lowest-maintenance path for a Greenfield implementation.

Year-Dependent (The High-Precision Model)

A variant is "Year-Dependent" if the start and end dates of the periods change every year.

The 4-4-5 Retail Cycle: Common in US/UK retail, where months are defined as cycles of weeks to ensure every quarter has exactly 13 weeks. Here, "Month 1" might end on January 28th one year and January 29th the next.
Configuration Necessity: Every year, the consultant or the power user must manually maintain the period end-dates for the upcoming year. Failure to do this before the clock strikes midnight on New Year's Eve will result in a global "Period not defined" hard error for every Purchase Order (PO) and GR.

Geographical Logic: Western (K4) vs. Indian (V3)

The primary differentiator in global rollouts is the Year Shift. This is a displacement factor ($+1$, $0$, or $-1$) that aligns the calendar year with the financial year.

The Western Style (K4)

The fiscal year matches the calendar year.

January: Period 01 / Shift 0
December: Period 12 / Shift 0

The Indian Style (V3)

The Indian fiscal year starts in April. This creates a technical overlap that requires a displacement shift.

April to December: These months are part of the current calendar year. Year Shift = 0.
January to March: These months belong to the next calendar year but the current fiscal year. To bring them back into the current fiscal year's reporting, we apply a Year Shift = -1.

Consultant Trap: If you are configuring a new Indian Company Code and forget the $-1$ shift for Jan/Feb/March, the system will try to post a March 2026 invoice into Fiscal Year 2026 instead of 2025, throwing the entire Balance Sheet out of equilibrium.

Case Study: Shortened Fiscal Year During Corporate Realignment

The Scenario:

An Indian subsidiary of a German conglomerate is migrating its legacy systems to the global SAP S/4HANA template. The Indian entity currently follows V3 (April–March), but the German parent company mandates K4 (January–December) for global consolidation starting January 1st, 2026.

The Solution: The "Transition Variant"

You cannot simply change the variant in OB37 mid-year; doing so would corrupt the Material Ledger history.

Define the Shortened Year: In OB29, create a new Year-Dependent variant (e.g., Z9).
Period Compression: For the transition year (2025), you define only 9 periods (April 2025 to December 2025).
The Cutover: On December 31st, 2025, the "Year 2025" ends.
The Re-assignment: In the new year, the Company Code is assigned to the standard K4 variant.

Critical MM Checklist for this Transition:

MMPV: Ensure the last period of the shortened year (Period 09) is closed correctly.
Purchase Orders: Any open POs with delivery dates in the "missing" months (Jan-March) must be reviewed to ensure the new period logic doesn't block the GR.
Physical Inventory: A full wall-to-wall count is recommended at the end of the shortened year to "cleanse" the valuation before the new cycle begins.

Integration Points for the MM Consultant

While FI defines the variant, the MM consultant must manage the operational impact:

T-Code OMSY: This is where we see the link between the Company Code and the Fiscal Year. It shows the current, previous, and last period of the previous year.
T-Code MMPV: This is the "Period Closer." It checks against the FYV to move the "Current Period" forward. If your FYV says Period 12 ends on March 31, but you try to run MMPV on March 30, the system will prevent the shift.
Material Valuation: SAP stores material stocks and values by period. If the FYV is changed without a proper migration strategy, the historical stock tables (MARCH, MARDH) will become inconsistent, leading to severe audit failures.

Conclusion

The Fiscal Year Variant is the heartbeat of SAP. Whether you are managing a standard K4 setup or a complex Year-Dependent shortened year for a merger, the logic remains the same: align the calendar to the business cycle through the Year Shift.

Actual Costing

2026-02-14T11:59:19.927000+01:00

Actual Costing

Actual Costing is a functionality of the Material Ledger (ML) in SAP. It helps calculate the true actual cost of materials at the end of a period by adjusting standard prices with real cost differences.

In SAP ECC, Material Ledger activation is optional.
In SAP S/4HANA the material ledger is mandatory (even if actual costing is not actively used).

When Material Ledger is active:

Material price analysis becomes available in material master and costing reports.
You can see periodic price differences and actual price calculations.

There are 2 types material valuation

Standard price
Moving average price

Standard Price (Price Control = S)

What is the standard price?

A fixed price that remains constant throughout the period.

Used mainly for:

Finished Goods (FG)
Semi-Finished Goods (SFG)

Advantages of Standard Price

Price remains stable → easy planning & variance control.

Differences between standard and actual cost are posted to:

Price Difference Account (PRD)

If actual cost > standard cost → Variance posted to PRD.

Disadvantages of standard price

Inventory is not valued at real cost during the month.

Example:

Standard price = ₹100

Actual cost = ₹200

The system still values stock at ₹100.

This may distort real inventory valuation during the period.

Moving Average Price (Price Control = V)

What is Moving Average Price?

Price changes automatically with every goods receipt.

Used mainly for:

Raw Materials (RM)

Advantages of Moving average Price

Inventory always reflects the latest procurement cost.
Example:
- Old price = ₹100
- New GR price = ₹102
- The system updates price to ₹102

Disadvantages of Moving average price

No price control.
No variance posting (no PRD impact).
Price fluctuates frequently.
Not suitable for finished goods manufacturing.

Both S and V have limitations:

Standard Price	Moving Average Price
Controlled but not real	Real but uncontrolled
Variances in PRD	No variance tracking

To overcome these limitations, SAP provides actual costing.

Actual Costing combines

Stability of Standard Price
Accuracy of Moving Average

Actual Costing Works

Step 1: During the Month

All materials are valued at Standard Price (S).
Variances are posted to the Price Difference Account (PRD).

Example:

Standard Price = ₹100
Actual Cost = ₹105
Inventory value = ₹100
PRD = ₹5

The balance sheet shows:

Inventory = ₹100
PRD = ₹5

Step 2: Month-End Process (Actual Costing Run)

Transaction: CKMLCP (Actual Costing Run)

The system performs:

Price Difference Collection
Multilevel Settlement
Revaluation of Inventory

After settlement:

PRD becomes zero.
Difference added to stock value.

Final Result:

Material value = ₹105
PRD = ₹0

Inventory now reflects true actual cost.

Benefits of Actual Costing

Accurate inventory valuation
Multilevel cost roll-up (Raw → Semi → FG)
True production cost visibility
IFRS-compliant inventory valuation
Better profitability analysis

Important Points in S/4HANA

Material Ledger is mandatory.
Parallel valuation (legal, group, profit centre) supported.
Actual costing integrates tightly with Universal Journal (ACDOCA).

Conclusion

Actual Costing in SAP is a powerful feature of Material Ledger that:

Uses Standard Price during the month
Captures variances in PRD
Adjusts inventory to actual cost at month-end

From Spreadsheets to a Financial Digital Twin: Reinventing FP&A with SAP

2026-02-15T17:22:41.835000+01:00

What Exactly Is a Financial Digital Twin?

At its core, a financial digital twin is a virtual model of your financial reality that is:

Connected: Continuously fed by actuals and operational data.
Intelligent: Built on business drivers and assumptions, not just static accounts.
Interactive: Able to simulate scenarios and show impacts on P&L, balance sheet, and cash in near real time.

You can think of it as a flight simulator for your finance function: instead of testing strategies in the real world (with real risk), you run them through the twin and see how they behave under different conditions.

Why CFOs and FP&A Leaders Should Care

From Static Budgets to Continuous Planning

Traditional FP&A runs on an annual budget and a handful of reforecasts. A digital twin enables:

Rolling forecasts that update when new data arrives, not just at quarter-end.
Near real-time visibility into how operational changes (orders, production, collections) flow into revenue, margins, and cash.

The result is a finance function that reacts to shocks (demand drops, price spikes, supply disruptions) in days, not months.

2. Better Decisions Through Scenario-Based Thinking

A financial digital twin is built for “what if” questions:

What if volume drops by 10% in our top three markets?
What if we move 15% of sales to a lower-margin channel?
What if FX moves against us by 5% for two quarters?

Instead of debating assumptions in PowerPoint, you run scenarios in the twin and see quantified impacts on earnings, leverage, and liquidity. This supports:

More confident guidance to the board and investors.
Better capital allocation and risk-management decision

3. A Shared View Across Finance and Operations

In many organizations, operations and finance look at different numbers and speak different languages. The digital twin creates a shared environment where:

Operations sees how their KPIs (throughput, yield, service levels) hit EBITDA and cash.
Finance sees the operational levers behind variances.

This alignment turns FP&A into a collaborative business partner rather than a reporting factory.

External Data ( machine info, Forex data etc)

The SAP Building Blocks of a Financial Digital Twin

If your core runs on SAP, you already have most of the building blocks. The opportunity is to deliberately assemble them into a coherent digital twin architecture.

SAP S/4HANA (and Central Finance): The Single Source of Truth

The Universal Journal in S/4HANA gives you a single, granular source of financial and controlling data. This is the transactional backbone of your twin:

All postings end up in one place (ACDOCA) with rich dimensions (company code, profit center, segment, customer, product, etc.).
You can drill from consolidated views down to individual line items without leaving the system.

If you run multiple ERPs, Central Finance can pull these into a harmonized S/4HANA-based finance hub. The digital twin then represents the full group, not just one system.

2. SAP Analytics Cloud (SAC): Planning, Forecasting, and Decision Cockpit

SAC is where much of the FP&A “front end” of the twin lives:

Planning models aligned to S/4HANA dimensions and hierarchies.
Driver-based budgeting where users adjust volumes, prices, and headcount instead of typing values into every account.
Scenario management with versions for base, upside, downside, and stress-test cases.
Dashboards and stories to visualize actuals, plan, and forecast side by side.

With live connectivity to S/4HANA, SAC can show up-to-date actuals while keeping planning data in the same space, eliminating reconciliation headaches.

3. SAP PaPM: The Economic Engine

A true digital twin needs to reflect how value is actually created and consumed, not just how it is reported. SAP Profitability and Performance Management (PaPM) helps by:

Modeling complex cost and revenue allocation logic (cost-to-serve, shared services, transfer pricing).
Simulating the impact of changes in drivers (volumes, discounts, service levels) on product and customer profitability.

PaPM can feed its results back into SAC planning and S/4HANA reporting, turning your twin into a realistic economic model, not just a spreadsheet on steroids.

4. Group Reporting: Real-Time Group Perspective

For group-level FP&A, S/4HANA Group Reporting is critical:

It consolidates group financials close to the source, enabling faster closes and near real-time group views.
Integrated with SAC, it allows group-level planning and scenario modeling on top of live consolidated data.

This closes the gap between statutory reporting, management reporting, and FP&A scenarios.

5. SAP Signavio: The Process Twin

Finance outcomes are driven by processes: order-to-cash, procure-to-pay, record-to-report, and forecast-to-fulfill. SAP Signavio adds a process-intelligence layer:

Process mining shows how these processes really run (cycle times, rework, bottlenecks).
You can link these insights to financial impacts—e.g., how process delays affect DSO, inventory, and working capital.

When you overlay Signavio insights onto your financial twin, FP&A can model not just financial numbers but the process changes needed to achieve them.

Putting It Together: An SAP-Based Financial Digital Twin Architecture

At a high level, your architecture might look like this:

Data foundation
- S/4HANA (and Central Finance if needed) holds harmonized actuals and master data.
- Group Reporting provides consolidated views.
Modeling and simulation
- PaPM and CO-PA model profitability and key drivers.
- Signavio models and analyses process flows.
Planning and analytics
- SAC hosts planning models, scenarios, dashboards, and predictive analytics.
User experience
- FP&A, business controllers, and business leaders access insights mainly through SAC and Fiori apps.

Step-by-Step: How to Design Your Financial Digital Twin

This is where many CFOs ask, “Where do we start?” Here’s a pragmatic sequence you can follow.

Step 1: Start with Business Questions, Not Tools

Clarify the decisions you want the twin to support. Examples:

“How exposed is our EBITDA and cash to a 10–15% demand shock in our top three markets?”
“Which products and customers are truly profitable after cost-to-serve?”
“How much working capital can we release without hurting service levels?”

Rank these questions and commit to solving the top three in your first iteration. This ensures your twin delivers visible business value quickly.

Step 2: Harmonize Data and Dimensions in S/4HANA

A digital twin fails if it rests on inconsistent structures. Work with your finance and IT teams to:

Standardize chart of accounts, profit centers, cost centers, and key reporting dimensions.
Ensure master data (customers, products, materials) is aligned across entities.
Confirm that the Universal Journal captures enough detail for your FP&A use cases.

This may sound “plumbing-like,” but it is foundational. Better models cannot fix broken master data.

Step 3: Build Driver Models in PaPM and CO-PA

Once the data foundation is solid, model your business logic:

Identify key drivers: volumes, prices, discounts, service levels, productivity, FX rates, etc.
Use PaPM (and, where relevant, CO-PA) to define how these drivers flow into revenues, costs, and profitability.
Validate the models with business owners using historical data—do they reflect reality well enough?

Aim for models that are simple enough to understand but rich enough to support decision-making.

Step 4: Implement Driver-Based Planning and Scenarios in SAC

Next, bring the twin to life for planners and business partners:

Build SAC planning models aligned to S/4HANA structures (no “shadow hierarchies” in Excel).
Replace line-item data entry with driver-based input where possible (e.g., volume and price instead of revenue by account; FTE and merit increases instead of salary lines).
Configure scenario and version management so FP&A can maintain base, upside, downside, and stress scenarios in parallel.

This is where business users start to “feel” the twin: they change a driver and immediately see financial impacts.

Step 5: Connect Group-Level View with Group Reporting

If you operate as a group:

Integrate Group Reporting with SAC so consolidated actuals flow directly into planning models.
Use the same structures for management and statutory views where possible to reduce reconciliation.
Model group scenarios: acquisitions, divestitures, segment realignments, and their impacts on leverage and covenants.

This helps your board-level discussions move from static decks to interactive, scenario-driven conversations.

Step 6: Add Process Intelligence with SAP Signavio

Once the financial twin is running, enrich it with process insights:

Use Signavio to analyze critical processes affecting revenue recognition, cost, and working capital (e.g., billing, collections, procurement, production).
Quantify how process changes (faster collections, fewer disputes, better forecast accuracy) move financial metrics.
Incorporate these into your PaPM and SAC models as additional levers.

Now your twin does not just answer “What if revenue drops?” but also “What if we improve our collection process by 5 days?”

Step 7: Build a Continuous Learning Loop

A digital twin should get smarter over time:

In SAC, set up dashboards comparing actuals vs. plan/forecast at multiple levels (entity, product, customer, segment).
Track forecast accuracy and bias by business area and driver.
Periodically recalibrate drivers and assumptions in PaPM and SAC models based on observed performance.

Over time, this turns the twin into a trusted decision-support system rather than a one-off project.

Bringing the Twin to Life: Three FP&A Use Cases

Concrete stories make the concept real for your stakeholders. Here are three you can adapt for your industry.

Use Case 1: Protecting Margins in a Demand Downturn

A global manufacturer sees early signals of softening demand:

S/4HANA and SAC show a drop in order intake for specific regions and products.
FP&A uses the twin to model a 15% volume decline and its impact on gross margin, plant utilization, and cash over the next two quarters.
They test combinations of levers: pricing actions, marketing cuts, production scale-backs, and working-capital measures (inventory reductions, payment-term changes).
Management selects a balanced response that protects strategic investments while preserving liquidity, all backed by quantified scenarios.

Instead of reactive across-the-board cuts, the digital twin enables targeted, data-driven action.

Use Case 2: Capacity Expansion and Capex Decisions

A business unit proposes a new production line:

PaPM models show how higher capacity and utilization would impact fixed-cost absorption and margins.
Group Reporting and SAC project the effect on group-level earnings, leverage, and covenants.
Signavio reveals that existing logistics and order-fulfillment processes are already a bottleneck; without fixing them, the new capacity would not be fully utilized.
The final decision bundles capex with process improvements, all tested in the twin before committing funds.

This elevates capex approvals from “business case PDFs” to interactive, scenario-based decisions.

Use Case 3: Continuous Working-Capital Steering

Working capital is often a major, but under-optimized, source of cash:

The twin brings together DSO, DPO, inventory days, and order patterns from S/4HANA.
SAC running predictive models and driver-based forecasts shows future cash conversion under different collection, payment, and inventory strategies.
Treasury and FP&A jointly manage liquidity by simulating changes to terms, discount programs, and inventory policies.

Here, the digital twin becomes a daily steering tool, not just a quarterly working-capital report.

How to Talk About This Within Your Organization

For CFOs and FP&A leaders, positioning is key. A few suggestions:

With the board: Emphasize resilience, speed of response, and better capital allocation, not system features.
With business leaders: Focus on usable scenarios, transparency on drivers, and the ability to test decisions safely before executing.
With IT and SAP teams: Frame it as an architecture and data challenge tied to specific business outcomes, not just another reporting project.

You are not “installing a tool”; you are building a new way for your organization to see itself and make decisions.

Final Thought: FP&A as the Architect of the Financial Digital Twin

The digital twin is a strategic opportunity for FP&A to step up as the architect of performance, not just the reporter of results. SAP gives you the building blocks, but only finance can define the questions, drivers, and scenarios that matter.

If you’re starting this journey, pick one or two high-impact use cases, assemble the right SAP components around them, and prove the value quickly. From there, your financial digital twin can expand step by step—until it becomes the default way your company plans, decides, and acts.

Feel free to connect—I'm excited to collaborate and help your team unlock the full potential of financial planning!

El reto real del CFO actual

2026-02-16T03:02:14.542000+01:00

La mayoría de las organizaciones aún operan con procesos financieros que:

Dependen de reconciliaciones manuales
Tienen información fragmentada entre FI, CO y módulos satélite
Cierran tarde y con alta presión operativa
Reaccionan, en lugar de anticipar

El problema no es el equipo. Es la arquitectura financiera heredada.

SAP S/4HANA: Finanzas en tiempo real, no al cierre del mes

SAP S/4HANA redefine el rol de Finanzas a partir de un concepto clave: el Universal Journal.

Esto permite:

Un solo registro financiero (ACDOCA)
Eliminación de reconciliaciones entre FI y CO
Información consistente desde el origen
Reportes en tiempo real, sin esperar al cierre

Para el CFO, esto se traduce en algo muy concreto: confianza en los números, en cualquier momento.

Cierre financiero más rápido, con menos esfuerzo

Uno de los mayores dolores del CFO es el cierre mensual.

Con SAP S/4HANA:

Se automatizan tareas repetitivas
Se reducen ajustes de último minuto
El cierre deja de ser un evento traumático

El beneficio no es solo cerrar más rápido, sino liberar tiempo del equipo financiero para análisis y estrategia.

De control operativo a visión estratégica

SAP S/4HANA permite a Finanzas:

Analizar rentabilidad en tiempo real
Monitorear flujo de efectivo de forma predictiva
Detectar desviaciones antes de que se conviertan en problemas
Integrar analítica directamente en los procesos (Embedded Analytics)

Esto cambia la conversación del CFO con la Dirección General: de explicar resultados a guiar decisiones.

Automatización e inteligencia: menos operación, más valor

S/4HANA, combinado con soluciones como SAP BTP, IA y herramientas de automatización, habilita:

Conciliaciones automáticas
Cash Application inteligente
Detección de anomalías
Forecast financiero más preciso

No se trata de reemplazar personas, sino de elevar el rol del talento financiero.

Cloud, control y escalabilidad

Para muchos CFOs, la pregunta no es si migrar, sino cómo hacerlo sin perder control.

SAP S/4HANA ofrece:

Modelos Cloud y On-Premise
Seguridad y cumplimiento normativo
Escalabilidad para crecer sin rediseñar Finanzas cada pocos años

La clave es elegir el camino correcto alineado al modelo de negocio.

#CFO #SAP #S4HANA #FinanzasEstratégicas #TransformacionFinanciera #ERP #AI

SAP Advanced Financial Closing: Third-Party Integration

2026-02-16T07:58:35.027000+01:00

Dear Finance Experts,

With the latest major release 6.0 of SAP Advanced Financial Closing (AFC) released on February 15, 2026, SAP introduces an important new capability: Third-Party System Integration.

This feature enables external systems to participate natively in AFC closing processes by acting as scheduling providers. It significantly expands AFC’s integration scope and allows customers to orchestrate financial close activities beyond SAP-managed execution engines.

Background

SAP Advanced Financial Closing has long been the strategic and central orchestration layer for financial close activities, coordinating tasks, dependencies, and monitoring across complex landscapes. With Third-Party System Integration, SAP formalizes this extensibility by introducing a public Scheduling Provider Interface. This allows external systems to:

Receive job execution requests from AFC
Report job execution status and results
Participate fully in AFC process monitoring and error handling

AFC remains the single point of orchestration, while execution can happen anywhere across the enterprise assuming that the Third-Party System Integration is properly enabled and set-up.

Getting Started

At a high level, integrating a third-party system with AFC consists of three steps:

Implement the AFC Scheduling Provider Interface
Your system exposes REST endpoints that comply with the AFC scheduling contract.
Register the provider in AFC
The provider is configured in AFC as a communication system capable of executing tasks.
Use AFC Closing Templates
Closing tasks are modeled as usual in AFC, but assigned to the external provider.

SAP provides all necessary specifications and tooling via the SAP Business Accelerator Hub and GitHub.

Scheduling Provider Interface

The SAP Advanced Financial Closing Scheduling Provider Interface defines the protocol between AFC and an external communication system.

Key characteristics:

REST-based API
Clearly defined lifecycle operations
Status and result reporting back to AFC

Typical responsibilities of a 3rd-party scheduling provider include:

Accepting task execution requests as jobs
Starting and monitoring jobs
Handling cancellations
Returning job results and messages

The complete API specification is available on the SAP Business Accelerator Hub:

SAP Advanced Financial Closing Scheduling Provider Interface

This specification is the definitive source and should be followed strictly to ensure compatibility with AFC.

SAP Advanced Financial Closing SDK for CDS

To simplify implementation, SAP provides the SAP Advanced Financial Closing SDK for CDS, published as an open-source project.

The Software Development Kit (SDK)

Is based on the SAP Cloud Application Programming Model (CAP)
Provides ready-to-use service definitions
Includes data models aligned with AFC semantics
Reduces boilerplate and integration effort

Using the SDK, developers can focus on:

Mapping AFC task executions to external job logic
Implementing business-specific processing
Handling system-specific scheduling and monitoring

The SDK architecture is summarized in the following diagram:

The SDK is available on GitHub and all the details can be found there:

SAP Advanced Financial Closing SDK for CDS

This makes it especially attractive for cloud-native integrations and rapid prototyping based on the SAP Business Technology Platform.

Hands-On

The following section shows in detail how to build a Third-Party Scheduling Provider implementing the Scheduling Provider Interface with the SAP Advanced Financial Closing SDK for CDS.

Prerequisites

Setup Node.js: https://nodejs.org/en/download

Install CDS module globally

npm install -g @sap/cds

Step 1: Create AFC SDK based CAP Project

Start with a standard CAP Node.js project:

cds init scheduler --nodejs
cd scheduler

Add the AFC SDK dependency:

npm install @cap-js-community/sap-afc-sdk

Note: This blog leverages the CAP Node.js runtime. As the AFC SDK is also fully compatible with CAP Java runtime, third-party scheduling provider applications can also be based on a CAP Java projects, following the details in the SAP SDK landing page CAP Java section.

Step 2: Start Project

Start the generated project:

npm start

Open the application URL in browser: http://localhost:4004.

A welcome page is displayed giving an overview of the out-of-the-box functionality provided.

Specifically, the Scheduling Provider API implementing the Scheduling Provider Interface is served already at http://localhost:4004/api/job-scheduling/v1.

There is no content yet.

Step 3: Add Job Definitions

Install AFC SDK Command-Line-Interface (CLI)

npm install -g @cap-js-community/sap-afc-sdk

Add basic sample data for testing:

afc add sample -m

Project is extended to include CSV files with sample job definitions placed at /db/data.

Restart the generated project:

npm start

The Scheduling Provider API exposes automatically the job definitions at http://localhost:4004/api/job-scheduling/v1/JobDefinition (for example,JOB_1) and the corresponding parameters, for example, for JOB_1 at http://localhost:4004/api/job-scheduling/v1/JobDefinition/JOB_1/parameters.

The CSV data can be adjusted according to the specific use-case.

Step 4: Implement Job Logic

Add implementation stub to project:

afc add stub

Empty implementation files are placed at /srv:

srv/scheduling-processing-service.js: Hooks to implement custom logic for the job processing (create, update, cancel, sync, and so on) on processing level
srv/scheduling-provider-service.js: Hooks to implement custom logic for job creation and job cancellation on provider service level

Edit processJob hook in file srv/scheduling-processing-service.js to enhance the logic to automatically complete the job successfully after 5 seconds:

this.on(processJob, async (req, next) => {
  await this.triggerJobUpdate(req, req.job, JobStatus.completed, [{
    type: ResultType.message,
    name: "Message",
    messages: [{
      code: "jobCompleted",
      severity: MessageSeverity.info
    }],
  }], new Date(Date.now() + 5000)); // 5 seconds
  await next(); // set job status to running
});

Constants can be imported from AFC SDK as follows:

const {ResultType, MessageSeverity, JobStatus} = require("@cap-js-community/sap-afc-sdk");

The job processing logic can be adjusted according to the specific use-case.The idea is that the job processing is forwarded to the respective external job execution endpoint and that status updates are reported back asynchronously via this.processJobUpdate. Here this is simulated by a timer-based job update trigger.

Restart the generated project:

npm start

A new job instance now can be generated for, example, via curl:

curl -u alice:alice -X POST "http://localhost:4004/api/job-scheduling/v1/Job" \
  -H "Content-Type: application/json" \
  -d '{
    "name": "JOB_1",
    "referenceID": "b001397c-b7f9-4f03-ba79-ec11297cae81",
    "parameters": [
      {
        "name": "A",
        "value": "abc"
      },
      {
        "name": "B",
        "value": 21
      },
      {
        "name": "C",
        "value": false
      }
    ]
  }'

The instance created returns the job ID with the initial status requested. Processing starts and shall update the job from status running to completed, when fetching the instance:

curl -u alice:alice -X GET "http://localhost:4004/api/job-scheduling/v1/Job/<jobID>"

With job status completed, the results of the job execution can be fetched via:

curl -u alice:alice -X GET "http://localhost:4004/api/job-scheduling/v1/Job/<jobID>/results"

Likewise result messages can be fetched via:

curl -u alice:alice -X GET "http://localhost:4004/api/job-scheduling/v1/JobResult/<jobResultID>/messages"

As alternative to curl, http files can be added (for example, at http/scheduling/provider.local.http) to execute http requests against the local Scheduling Provider API, via command:

afc add http

Step 5: Add Security

The application must be secured before productive usage. Respective guidance can be found in CAP documentation: https://cap.cloud.sap/docs/guides/security. Choose between XSUAA-based or IAS-based authentication and authorization to secure the APIs. In case of XSUAA, AFC SDK supports the creation of a Service Broker via command:

afc add broker

Step 6: Deploy to Cloud

Project shall be prepared for deployment using the AFC SDK CLI:

Cloud Foundry:

afc init cf

Kyma:

afc init kyma

Additional guidance on cloud deployments can be found in CAP documentation: https://cap.cloud.sap/docs/guides/deployment.

After successful deployment, the external scheduling provider is available via an internet-facing endpoint that can be reached by SAP Advanced Financial Closing through the SAP Destination Service.

Step 7: Create Destination

A destination to the external scheduling provider needs to be configured in the SAP BTP Cockpit on sub-account level in the Connectivity/Destinations section. The concrete destination configuration highly depends on the target application configuration.

An example destination configuration looks as follows (for example, OAuth2ClientCredentials)

destination:
  Name: "external-scheduler"
  tokenServiceURLType: "Dedicated"
  Type: "HTTP"
  clientId: "<client-id>"
  Authentication: "OAuth2ClientCredentials"
  clientSecret: "<client-secret>"
  tokenServiceURL: "https://authentication.sap.hana.ondemand.com/oauth/token"
  ProxyType: "Internet"
  URL: "https://<url>/api/job-scheduling/v1"
  Description: "External Scheduler"

Fill the security-relevant configurations (clientId, clientSecret, tokenServiceURL, URL) from the client secret (IAS) or service key (XSUAA broker) from the specific setup of the scheduling provider application.

Step 8: Create Communication System

With the destination ready, a communication system of system type External System can be created in the SAP Advanced Financial Closing Specify Communication System app:

Step 9: Use External System in Template

In the Manage Closing Task Lists app, you can include jobs from external communication system into the folder structure using the Create Task from External Job button. A task list is generated as usual to process the external jobs.

Step 10: Process external jobs

External jobs integrated from external third-party systems can be processed as any other job-like task as part of the SAP Advanced Financial Closing scheduler and status and job results are synchronized afterwards:

With this implementation, the third-party system integration is fully demonstrated, proving that external jobs can be reliably processed within the automated scheduling framework of SAP Advanced Financial Closing.

Summary

SAP Advanced Financial Closing 6.0 introduces Third-Party System Integration, enabling external schedulers and execution engines to participate seamlessly in financial close processes. With the Scheduling Provider Interface and the AFC SDK, developers can quickly build compliant providers, manage job execution, and report statuses back to AFC. This new capability allows organizations to extend AFC beyond SAP-managed systems, integrate custom or cloud-native engines, and maintain centralized orchestration—all while reducing development complexity and ensuring reliable monitoring.

Thank you for taking the time and reading this blog post.

For more information on SAP S/4HANA Cloud, check out the following links:

SAP Community Page for SAP Advanced Financial Closing: here

SAP Help Portal for AFC: here

SAP Help Administration Guide - Third-Party Systems: here

SAP API Business Hub (SSPI): here

AFC in the SAP Roadmap Explorer: here

SAP.com page about AFC: here

Follow us via @SAP on twitter and tag #AdvancedFinancialClosing, or myself via @OliverKlemenz.

Disclaimer

Please note that SAP Advanced Financial Closing gets frequent updates and enhancements. Therefore, the current features and functions may not be exactly as described here. For the latest information, you can refer to the product documentation on the SAP Help Portal.

Deciphering the Functional Mechanics of FYV.

2026-02-18T15:42:20.397000+01:00

Date: February 2026

Author:- Er. Pratik Das (B.Tech, Mechanical Engineering , SAP Functional Consultant ).

Specialization :- MM, SCM Integration & Business Process Optimization.

Target Audience: SAP Functional Consultants (MM,FI), Solution Architects, Financial Controllers & Business Process Owners (BPO), SAP S/4HANA Migration Leads & etc.

In the SAP ecosystem, the Fiscal Year Variant (FYV) is far more than a simple calendar setting; it is the temporal foundation upon which all transactional integrity rests. For a Material Management (MM) Consultant, the FYV dictates the lifecycle of a Material Document, the calculation of moving average prices, and the strict boundaries of period-end closing via MMPV.

When we configure a system for a global rollout—balancing the Western (K4) and Indian (V3) statutory requirements—precision in OB29 is non-negotiable. Misconfiguration here doesn't just result in a ledger error; it can freeze a warehouse’s ability to post Goods Receipts (GR) or Issue Goods (GI).

The Functional Mechanics of FYV :-

The Fiscal Year Variant defines the number of posting periods in a fiscal year and the number of special periods. While the standard is 12 posting periods, SAP allows up to 16 periods in total.

Posting Periods: These correspond to the operational months where day-to-day procurement and inventory movements occur.
Special Periods (13–16): These are strictly for Finance (FI). As an MM consultant, it is vital to remember that logistics movements cannot be posted to special periods. These are reserved for audit adjustments, tax corrections, and year-end closing entries that do not affect physical inventory quantities.

Calendar-Dependent vs. Year-Dependent: The Implementation Choice
Calendar-Dependent (The "Set and Forget" Model)

Used predominantly in Western regions (Standard Variant K4), this configuration assumes the fiscal year is identical to the Gregorian calendar (January 1 to December 31).

Consultant Insight: When "Calendar Year" is flagged in OB29, the system ignores the "Period" and "Day" sub-tables. It automatically knows January has 31 days and is Period 01. This is the lowest-maintenance path for a Greenfield implementation.

Year-Dependent (The High-Precision Model)

A variant is "Year-Dependent" if the start and end dates of the periods change every year.

The 4-4-5 Retail Cycle: Common in US/UK retail, where months are defined as cycles of weeks to ensure every quarter has exactly 13 weeks. Here, "Month 1" might end on January 28th one year and January 29th the next.
Configuration Necessity: Every year, the consultant or the power user must manually maintain the period end-dates for the upcoming year. Failure to do this before the clock strikes midnight on New Year's Eve will result in a global "Period not defined" hard error for every Purchase Order (PO) and GR.

Geographical Logic: Western (K4) vs. Indian (V3)

The primary differentiator in global rollouts is the Year Shift. This is a displacement factor ($+1$, $0$, or $-1$) that aligns the calendar year with the financial year.

The Western Style (K4)

The fiscal year matches the calendar year.

January: Period 01 / Shift 0
December: Period 12 / Shift 0

The Indian Style (V3)

The Indian fiscal year starts in April. This creates a technical overlap that requires a displacement shift.

April to December: These months are part of the current calendar year. Year Shift = 0.
January to March: These months belong to the next calendar year but the current fiscal year. To bring them back into the current fiscal year's reporting, we apply a Year Shift = -1.

Consultant Trap: If you are configuring a new Indian Company Code and forget the $-1$ shift for Jan/Feb/March, the system will try to post a March 2026 invoice into Fiscal Year 2026 instead of 2025, throwing the entire Balance Sheet out of equilibrium.

Case Study: Shortened Fiscal Year During Corporate Realignment

The Scenario:

The Solution: The "Transition Variant"

You cannot simply change the variant in OB37 mid-year; doing so would corrupt the Material Ledger history.

Define the Shortened Year: In OB29, create a new Year-Dependent variant (e.g., Z9).
Period Compression: For the transition year (2025), you define only 9 periods (April 2025 to December 2025).
The Cutover: On December 31st, 2025, the "Year 2025" ends.
The Re-assignment: In the new year, the Company Code is assigned to the standard K4 variant.

Critical MM Checklist for this Transition:

MMPV: Ensure the last period of the shortened year (Period 09) is closed correctly.
Purchase Orders: Any open POs with delivery dates in the "missing" months (Jan-March) must be reviewed to ensure the new period logic doesn't block the GR.
Physical Inventory: A full wall-to-wall count is recommended at the end of the shortened year to "cleanse" the valuation before the new cycle begins.

Integration Points for the MM Consultant

While FI defines the variant, the MM consultant must manage the operational impact:

T-Code OMSY: This is where we see the link between the Company Code and the Fiscal Year. It shows the current, previous, and last period of the previous year.
T-Code MMPV: This is the "Period Closer." It checks against the FYV to move the "Current Period" forward. If your FYV says Period 12 ends on March 31, but you try to run MMPV on March 30, the system will prevent the shift.
Material Valuation: SAP stores material stocks and values by period. If the FYV is changed without a proper migration strategy, the historical stock tables (MARCH, MARDH) will become inconsistent, leading to severe audit failures.

Conclusion

The Fiscal Year Variant is the heartbeat of SAP. Whether you are managing a standard K4 setup or a complex Year-Dependent shortened year for a merger, the logic remains the same: align the calendar to the business cycle through the Year Shift.

SAP Finance Certifications: Hands-On Testing in Live SAP S/4HANA Systems

2026-02-20T11:44:46.833000+01:00

Why SAP Finance Certifications Matter

SAP Finance certifications demonstrate your ability to not just understand concepts, but to actually execute them in a working system. Whether you're a financial or management accounting implementation consultant, these certifications prove you can deliver results from day one.

Financial Accounting Certifications

1. SAP Certified - SAP S/4HANA Cloud Private Edition, Financial Accounting

Learn More & Register

This certification validates your fundamental knowledge and practical skills in financial accounting processes within SAP S/4HANA. During the exam, you'll work directly in a live SAP S/4HANA system to demonstrate your ability to:

Process accounts payable and receivable transactions
Handle general ledger accounting
Manage asset accounting
Execute period-end closing activities

2. SAP Certified Associate - Implementation Consultant - SAP S/4HANA Cloud Public Edition, Financial Accounting

Learn More & Register

Focused on cloud implementations, this certification proves your consulting capabilities in deploying SAP S/4HANA Cloud Public Edition for financial accounting. The practical exam format ensures you can configure and implement solutions in real-world cloud scenarios.

Management Accounting Certifications

3. SAP Certified - SAP S/4HANA Cloud Private Edition, Management Accounting

Learn More & Register

This certification covers the controlling and management accounting aspects of SAP S/4HANA. Through hands-on exercises in a live system, you'll demonstrate proficiency in:

Cost center accounting
Internal orders
Product costing
Profitability analysis
Profit center accounting

4. SAP Certified Associate - Implementation Consultant - SAP S/4HANA Cloud Public Edition, Management Accounting

Learn More & Register

This certification prepares you to implement management accounting solutions in SAP S/4HANA Cloud Public Edition environments, with practical testing that mirrors real implementation projects.

The Practical Exam Advantage

What makes these certifications truly valuable is the hands-on exam methodology. Instead of memorizing answers, you'll:

Work in a live SAP S/4HANA system during your exam
Perform actual transactions and configurations that reflect real business scenarios
Demonstrate problem-solving skills in a realistic environment
Prove you can deliver from your first day on the job

This practical approach means that when you earn your certification, employers know you have genuine, applicable skills.

Which Certification Is Right for You?

Choose Financial Accounting certifications if you work with general ledger, accounts payable/receivable, asset accounting, or financial reporting
Choose Management Accounting certifications if you focus on cost controlling, internal reporting, profitability analysis, or management decision support
Choose on-premise certifications for traditional SAP S/4HANA implementations
Choose Cloud Public Edition certifications if you're working with or transitioning to cloud-based solutions

Ready to Get Certified?

SAP Finance certifications are investments in your career that pay dividends through enhanced credibility, expanded opportunities, and demonstrated expertise. With the practical exam format, you'll gain confidence knowing that your certification reflects real-world capabilities.

Visit the links above to explore the detailed exam guides, recommended training courses, and registration information for each certification path. Your journey to becoming an SAP Certified Finance professional starts with hands-on experience and that's exactly what these certifications test!

Have you taken any of these SAP Finance certifications? Share your experience below!

Mastering Purchase Order Accruals in SAP S/4HANA

2026-02-26T08:39:31.583000+01:00

The SAP S/4HANA Accrual Engine, Accruals Accounting offers flexible configuration options like,

Calculation and posting of the accruals
Option to review process for the monthly accrual amounts
Supports monitoring and the approval of accruals

POAC Introduction

The Purchase Order Accruals application enables you to calculate and post accruals in General Ledger Accounting automatically.

The relevant data is transferred from the Materials Management component to the accrual engine and automatically converted from purchase order items into accrual items. The system calculates the amount to accrue for each purchase order item based on the above data. You can also simulate these amounts.

The functions in Purchase Order Accruals support parallel Accounting. This means that you can calculate and post accruals simultaneously according to different ledger groups. You can start an accrual run, which posts all accruals for the various business transactions.

From a technical standpoint, the Purchase Order Accruals application is built on the accrual engine. The purchase order items to be accrued are managed in Purchase Order Accruals. The processes for calculating and posting accruals, on the other hand, are managed in the Accrual Engine.

To post-purchase order accruals, perform the following steps:

In the MM component, create a purchase order
The purchase order is then transferred to the Accrual Engine offline or online, and monthly accrual amounts are calculated and displayed in the Accrual Engine
(Optional) Review and approve, or just approve the monthly accrual amounts
Post the accrual amounts.

Accruals Process
The purchase order accruals process involves the following job templates and apps in Fiori:

The Propose Periodic Accruals job template in the Schedule Accruals Jobs app
Review Purchase Order Accruals - My Inbox or Review Purchase Order Accruals - for Cost Accountant
The Post Periodic Accruals job template in the Schedule Accruals Jobs app
Analyse Accruals Posting
Display Purchase Order Accruals

Integration
In Financial Accounting, you can also post accruals with the recurring entries function. In contrast to recurring entries, the functions in Purchase Order Accruals offer you the following benefits:

Automatic calculation based on live PO data.
Pre-posting review/approval.
Complex rules (e.g., pro-rata, thresholds).

Purchase Order Accruals: Design

Purchase Order Accruals Design

POAC Steps
Creation of a purchase order in application component Purchasing MM-PUR, for example using transaction “Create Purchase Order” (ME21N).

Each purchase order is automatically transferred into the Accrual Engine. This happens by Customizing settings and controlling whether and how accruals will be posted. In the Accrual Engine, an accrual object is created for each purchase order.

While implementing the application component Purchase Order Accruals, you have to transfer your existing purchase orders once into the Accrual Engine of your production system. You can do these using accrual activities “Transfer Purchase Orders to Accrual Engine” with schedule accruals jobs app ID F3778.

Display Accrual Objects:
For each purchase order, you can display the monthly accrual amounts the system calculates using app “Display Accrual Objects items” app ID F4899.

Schedule Accruals Jobs:
This app enables you to schedule accruals jobs using the templates provided. For example, you can perform periodic posting runs and propose periodic accrual amounts.

You can use the scheduling options to carry out the following periodic accrual activities:

Perform Periodic Posting Runs
Propose Period Amounts
Transfer Purchase Orders to Accrual Engine

The templates are available only when you've registered them in customizing view APJ_C_SCOPE . Follow the steps to register for the three templates:

Run t-code SM30.
Enter APJ_C_SCOPE for Table/View, and click Maintain.
Add the following new entries:

SAP_FIN_GL_ACE_POSTING_RUN
SAP_FIN_GL_ACE_PROPOSAL_RUN
SAP_FIN_GL_POAC_MMPO2ACE_TRANS

Save your changes.

Schedule Accruals Jobs

Template Selection

Optional: Review and approval process at the end of each fiscal period:

At the end of each fiscal period, a reviewer can adjust the accrual amounts (or planned costs) that the system proposes for the current fiscal period.

As a prerequisite, the proposal amounts must be generated for the given fiscal period using Accrual Engine for POs - Propose Period Amounts under schedule accruals jobs.

The review can be performed using the app “Review Purchase Order Accruals for Cost Accountant” app ID F3552. The review includes the possibility to manually adjust the accrual amounts that the system proposes.

As an alternative or in addition to the review, approval can be performed using the transaction “Approve Periodic Accruals”.

The difference between review and approval is that in case only review is active, then the system will post the proposed accrual amounts even if no review was done. But if approval is active, then only those accrual amounts are posted which have been approved.

Post accruals at the end of each fiscal period:

The accrual amounts are posted using accrual activities “Periodic Posting Run” with schedule accruals jobs app ID F3778.

Analyze Accrual Postings:

With this application you can display an overview of accrual postings, you can filter the postings by various criteria and navigate to a specific posting in related apps to investigate. (App ID F3732)

Display Accrual Objects

An accrual object contains all data that the system needs to calculate and post accruals for this business transaction.
Optional: Reviewing and Approving Periodic Accruals
You can set up a review and approval procedure for the accrual amounts calculated and proposed by the system.

Customizing Purchase Order Accruals

Before you can use the functions in Purchase Order Accruals, you must make extensive Customizing settings.
The settings control, for example, the purchase orders or purchase order items to be accrued, the algorithms to be used for a particular purchase order item, and the accounts to be used for accruals posting.
If you want to take the optional step of manually checking and approving accrual amounts, you must also make the corresponding Customizing settings here.
Additionally, some settings are available to you with which you can adjust the functions according to your needs. For example, you can add user-defined fields (or parameters) for use in the functions.

Posting Data of an Accrual Object

For each accrual object, the item data is saved in the journal.

Prerequisites:

You have made the necessary settings in Customizing for accrual posting, that is, you have, for example, defined accrual item categories, posting schemas, and account determination. You find these settings in Customizing for Accrual Management.

Closing Notes:

Details of the Purchase order Accruals process can be obtained under Scope item 2VB in SAP Best Practices Explorer. POAC streamlines month-end but PO lifecycle changes (e.g., changes, cancellations) impact accruals—test thoroughly in production-like scenarios.

Thanks for reading! Feedback welcome to refine future posts.

SAP and BlackLine: Enhancing the Gold Standard Partnership with AI Capabilities

2026-02-26T10:35:30.541000+01:00

As the use of AI becomes common practice among finance and accounting teams, SAP and BlackLine are reviewing capabilities to reduce the time and effort our customers spend on financial closing and record-to-report (R2R) activities, all while upholding the highest standards of integrity and compliance.

Building on the gold standard our partnership has set for record-to-report (R2R), we are now exploring how the capabilities of SAP Joule and BlackLine Verity AI can work together to enhance the gold standard for our joint customers.

While SAP has tens of thousands of partners, only a few dozen have reached the status of solution extension. At this partnership level, SAP and BlackLine product teams review select and relevant development plans and product roadmaps to ensure alignment and interoperability. When companies choose SAP and BlackLine to support their mission critical financial close and record-to-report activities, they are choosing the gold standard.

This collaboration can unlock greater efficiency and productivity enabling customers to achieve more. By aligning technologies and expertise, both SAP and BlackLine are committed to delivering enhanced AI products that work better together to deliver value and help drive transformative outcomes for finance teams worldwide. We look forward to providing further updates as our joint work on AI progresses.

Learn more about SAP solutions for accounting automation here:

https://www.sap.com/products/financial-management/account-substantiation-automation-blackline.html

What’s new for FINANCE TEAMS in the February 2026 release of SAP S/4HANA Cloud Private Edition?

2026-02-27T10:53:30.199000+01:00

This week, SAP released SAP S/4HANA Cloud Private Edition 2025 FPS1.

While there are more than 750 incremental enhancements available in the What’s New Viewer your team can dig into, there are a couple that are game-changing for your finance teams. This blog goes through all of the areas of Finance to highlight the innovations that are most relevant for finance.

Financial Planning and Analysis – more support for complex allocations

In the area of management accounting, cost controllers have more automation than ever before with SAP S/4HANA’s universal allocation capabilities. Controllers run allocation cycles to move overhead costs, revenues, and quantities across cost centers, profit centers, and market segments. This release introduces a new Fiori app called Manage Allocation Changes (Fiori app ID F7272) to improve the traceability of changes made to allocation cycles. This record of the cycle definition used for each live run is important to answer questions about allocations.

Accounting and Financial Close – SAP Business AI for automation and usability

In financial accounting, most journal entries are automatically created by logistical processes. However, for those manual journals that originate in finance, this release includes an AI capability to automate many journal entry types - SAP S/4HANA Cloud Private Edition, journal upload. By training the AI capability with accounting policy or other guidance documents, the AI-generated journal posting proposals meet highest quality standards. The accountants approve the proposal, and the proposals are posted. Thousands of journal lines otherwise calculated in spreadsheets are processed automatically – in line with SAP data structures, SAP business data validation rules, and SAP Business AI principles.

SAP Business AI is also used in the depreciation key explanation feature that uses natural language to explain to business users how depreciation keys operate within asset accounting. With a clearer understanding of the underlying logic, asset accountants can ensure values are being calculated accurately – improving the quality of financial statements. Accounting is a key area in Finance that is undergoing a “generational change” – and new accountants will benefit from these explanations.

In the area of the entity close, SAP Advanced Financial Closing (AFC Community Site) has released several features that help large and complex organizations add even more automation capabilities to their financial close:

Improved automation for complex landscapes:

Third-party system integration – execute tasks in external systems while keeping central visibility across all systems involved in the customers' closing process, including integration with SAP Accounting Automation by BlackLine.

Faster setup for project teams:

Mass task creation via spreadsheet – accelerate your entity close optimization projects during the initial setup of the task list template

Improved compliance and control of the close:

Simplify how you push out central changes in your closing templates to all entities – and how you can standardize reporting attributes across templates – with improved task group maintenance functionality
Tailor your reporting based on the way you structure your business with flexible organizational groupings(company code, controlling areas, and plants). Dedicated views make it easy to identify overdue tasks and monitoring closing progress across units.
Let your closing process owners determine the settings when comments are required to ensure compliance requirements are met - without unnecessary overhead in non-production systems.

In the area of SAP Central Finance, which extends the value of your SAP S/4HANA finance processes across your landscape, even to parts of your organization that operate in separate ERP systems, this release includes:

Improved visibility and reporting with centralized GL postings:

Enables Finance users to manage their G/L postings in a central place with detailed and summary level financial reporting and analytics
Leverages the Universal Journal, allowing organizations to report on various dimensions of their business as a self-service
Allows users to make decisions quickly and identify bottlenecks and pain points that need to be corrected

Better working capital visibility with Taulia in your central finance landscape:

Offers tools to optimize working capital, including supply chain finance, dynamic discounting, and virtual cards
Provides seamless integration to central finance, providing a consolidated view of working capital across the company
Improves cash flow while protecting supplier relationships
Helps organizations improve liquidity and strengthen supply chain resilience

In the area of revenue accounting there are several new capabilities, including business reconciliation features to integrate results analysis with optimized contract management and inbound processing. There’s more flexibility for contract combinations and performance obligation reassignments, as well as support for the early termination of performance obligations.

There are also new innovations in event-based revenue recognition, including the “revenue-based percentage of completion” method for services with advanced execution, as well as revenue recognition for execution order items with resource-related cost items. There is also new support for event-based revenue recognition for sales orders with milestone billing.

For the full set of details on these innovation, there’s a replay session available.

Treasury and Working Capital - agentic automation for operational excellence

In Contract Accounting, this release includes an advanced AI feature - a Dispute Agent (video available at link!) that helps accountants resolve dispute cases related to incorrect invoices or missing payments efficiently. The agent ensures timely collections and protects customer relationships by proactively proposing and executing next steps – such as creating a credit memo to resolve the conflict. You can register for beta testing here.

In the area of Cash and Treasury, this release includes a Cash Management Agent that helps cash managers save time by automating reconciliations and increasing interest yields by proposing cash optimizations.

Studies have shown great results:

70% Reduction in cash management effort

You can register for beta testing here: https://influence.sap.com/sap/ino/#/campaign/3987

In SAP Treasury and Risk Management, SAP has delivered support for an alternative risk-free currency for Balance Sheet FX Risk. Hedge Management’s Balance Sheet FX Risk process provides a snapshot of exposures that are in a currency that is different from the risk-free currency – which by default is the currency of the company code. However, for companies operating in countries where it is difficult to obtain hedging transactions in the risk-free company code currency, or in countries where the company code currency is not stable, it may be necessary to use an alternative risk-free currency – and this is now possible as part of the standard process.

Innovations beyond Finance

Moving beyond “core finance”, there are some innovations, like new automation support for complex multi-stage intercompany processes, that will make lives easier for Finance teams. Any time new standard processes are introduced, with more automation and fewer possibilities for error, your team benefits. You will deal with fewer manual adjustments at period-end, fewer spreadsheets, and fewer reconciliations. This new process support has been delivered in restricted release to help manage multistage intercompany sales and stock transfers with flexibility, optimizing supply chain efficiency. Additionally, Universal Parallel Accounting simplifies financial management by managing parallel value and currency flows, supporting compliance with IFRS and local GAAP. These capabilities provide comprehensive insights and operational flexibility, ensuring seamless coordination and cost optimization across your business. More background can be found here.

Finally, there's a Global Webinar planned for Thursday, March 12 as a part of the Continuous Innovation for SAP S/4HANA Private Cloud series. Don't miss this opportunity to learn more about how to get the most of your SAP solutions.