The chart of account (CoA) is one of the most important structures in business. It reflects all the activities a business is involved in and it provides a foundation for the majority of financial and management reporting. Correct use of the chart of accounts can both simplify operations and improve decision making capability.
Often on accounting projects, there is a gap between accounting expertise and systems expertise, this can result in a poor CoA design. This can easily be overcome by understanding the historical context and modern-day principles that surround the CoA. We can then better understand the implementation options in systems such as SAP ERP or S/4 HANA. This article will look at three topics:
Part I: Accounting: history & modern principles;
Part II: CoA settings in SAP ERP (from R/3 to S/4 HANA);
Part III: Common pain points and improvement initiatives.
Recent years have seen a resurgence in large organisations taking on major SAP upgrades with the relatively new SAP business suite 4 HANA (S/4HANA) collection of applications. But what exactly is HANA? and what is S/4HANA? How is implementing or upgrading to it different from the R/3 upgrades that were significant programs for many organizations over the last few decades?
As SAPs core products have advanced and their portfolio has broadened it’s become difficult to understand how it all fits together. In recent years I’ve met team members and stakeholders working on SAP programs who struggled to articulate the basics of HANA. SAP projects can be complex and challenging partly due to this lack of knowledge. SAP have been addressing this by improving their communications and training, but understanding HANA can still be quite a lot to navigate.
In this article, I’ll briefly explain the history of SAP and hence the context that led to HANA as well as clarifying the technical concepts behind HANA, why they are important, and how the business application has changed.