As a standardized Enterprise Resource Planning (ERP) system, SAP S/4HANA Cloud Public Edition offers a wide range of industry best practices, a pre-configured system environment, the security customers need in the age of digital transformation and fast time to value.
To fully benefit from the potential of SAP S/4HANA Cloud Public Edition, it's essential to recognize some relevant aspects that come with predefined settings. While these settings may differ from SAP S/4HANA (on premise) and SAP S/4HANA Cloud Private Edition, understanding these distinctions is key to optimizing your experience, particularly from a Finance perspective.
Let's explore some of these features and considerations for implementing SAP S/4HANA Cloud Public Edition, with a focus on Finance, in SAP Central Business Configuration (CBC) based system environments:
1. Pre-Delivered Controlling Area: In SAP S/4HANA Cloud Public Edition, there is one pre-delivered controlling area (A000).
In case you are familiar with SAP S/4HANA (on premise) and SAP S/4HANA Cloud Private Edition, you might know that you could have more than one controlling area. However, as this was/is not a recommended scenario, and a growing number of customers are executing a controlling area merge.
As in SAP S/4HANA (on premise) and SAP S/4HANA Cloud Private Edition, the currency of the controlling area is defined at the tenant level during system provisioning and is referred to as the "Group Currency".
2. Finance Primary Settings: The Finance primary settings -"Fiscal Year Variant for the Leading Ledger and Group Currency" are defined early in the SAP Central Business Configuration implementation project. The fiscal year variant that is assigned to the leading ledger is defined for the whole system in this stage and it cannot be changed later. However, SAP S/4HANA Cloud Public Edition offers the flexibility of setting up an alternative fiscal year variant for the local ledger. You can find more details in SAP Note 3169537 - SAP S/4HANA Cloud: Release Restriction Note for the Alternative Fiscal Year Variant - SAP ....
3. Introduction of an Additional Ledger: In SAP S/4HANA Cloud Public Edition all the required ledgers must be defined in the initial system set-up. This means that you must consider at the time of the initial scoping phase whether you will need an additional ledger.
Special consideration is required for Ledger 4G which is available with the Group Valuation scope item (5W2).
In other words, you need to consider whether the Group Valuation (5W2) scope item is relevant for your project. As this scope item applies to the entire group, once set up and ledger 4G is activated, it will be automatically available for all legal entities.
For more details, please check SAP note 3093830 - SAP S/4HANA Cloud: Release Restriction Note for Group Valuation - SAP for Me and 3100892 - Group Valuation in SAP S/4HANA Cloud - SAP for Me.
Once you decide Group Valuation scope item (5W2) is in scope for you project, you must confirm the above two notes in order to activate it.
4. Ledgers and Accounting Principles: The system’s default setup assigns the local accounting principle to the leading ledger. The recommendation is to change this assignment and assign the leading ledger to the accounting principle of the group (usually IFRS or USGAAP), for example, to support intercompany processes. For more information, see also Parallel Accounting Using Parallel Ledgers | SAP Help Portal.
The local accounting principles should be assigned to the parallel non-leading ledger 2L on company code level. By doing so you make sure that you have the required depreciation areas available in Asset Accounting:
If you have not changed these assignments before you started the project and you have transactional data in the test system, you can remove the transactional data and then change the assignment. To find out how this is done, see Reset Transaction Data | SAP Help Portal.
Please be aware that this only works if you don't have transactional data in your production system. As soon as you are live with your production system and have made your first postings, a change of these assignments is not possible anymore.
If you have specific business requirements where the group accounting principle is one of the local ones (that is, not IFRS or USGAAP), you can set this up by activating the relevant scope items for IFRS and USGAAP (1GA - IFRS or 2VA - USGAAP). This will make ledger 2L or 3L available in your system. You can then assign the leading ledger 0L to the local accounting principle that is used for the entire group and the parallel ledger (2L or 3L) to another local accounting principle.
Please consider this not a recommended approach, but rather a work around for specific business needs.
4. Tax Ledger Setup: In SAP S/4HANA Cloud Public Edition, you can use the extension ledger for tax adjustments, if needed - assuming that it’s sufficient to post the tax adjustments in the general ledger (G/L) only. For more information, see Extension Ledger | SAP Help Portal.
5. Currency considerations: The system is based on a maximum of three currencies, each serving specific purposes. While the company code currency and group currency are fixed, the third currency is flexible and can be used for a company's specific business needs.
Among the most important aspects regarding currencies are the following:
- The company code currency (currency type 10) is the local country currency so it cannot be different/changed.
- The group currency (currency type 30) is set up at the tenant level and is also valid for the controlling area. It must be set up during the initial system provisioning.
- The freely defined currency type is an optional, additional currency type that you can configure according to your business needs.
You can also specify if any of these currencies is to be used as the “functional currency” for reporting purposes. However, the recommended approach is to create the Functional currency as freely defined currency, as in certain areas like Asset Accounting, the functional currency overrules by default the company code currency.
For more information on currencies, see the following SAP Help Center documents and blog posts:
- Currencies
- Create Additional Currency Types
- Define Functional Currency
- Change of Functional Currency | SAP Help Portal
- Freely Defined Currency or Additional Currency + F... - SAP Community
6. G/L Accounts Creation: G/L accounts are considered as configuration objects in SAP S/4HANA Cloud Public Edition and can only be created in the development system. The system ensures data integrity by eliminating duplicates during new process deployment.
If you need to create a new G/L account, we recommend you copy an existing G/L account. You have the possibility to renumber and rename pre-delivered and existing G/L accounts, as long as you do that in the development system.
Being considered configuration objects, the G/L accounts in SAP S/4HANA Cloud Public Edition must be transported to test and production environments. You can find more details under Chart of Accounts Maintenance in a 3-System Landscape | SAP Help Portal.
When a new standard SAP process is deployed where new G/L accounts are also relevant, the system will ensure that duplicates are eliminated. If, for example, you are currently using a certain G/L code for a different purpose, and this G/L code is now delivered as part of the standard solution, the system will read this information and the duplicate account will be delivered with a new value automatically. So, none of the new created GL accounts will be overwritten.
7. Customer Invoicing: Customer invoices are to be issued through Sales and Distribution as a billing document.
For more details, see Output Management for Sales Documents and Billing Documents | SAP Help Portal.
8. Master Data Deletion: In SAP S/4HANA Cloud Public Edition, the deletion of master data at the tenant level requires alternative approaches, such as individual deletion features, archiving, or the "test data refresh" service.
Please consider the following procedures:
- According to the master data type – individual deletion features are available.
- You can also consider archiving via SAP Information Lifecycle Management (ILM), where no deletion is possible.
- Investigate if you can use the service called ‘’test data refresh’’. Its main use case is to provide realistic data (from the production system) for testing, once live. During the implementation and before being productive, as a sort of workaround to provide an ‘’empty’’ testing box. Your production system should be empty and by refreshing the test system using the service, your test system will be "empty" again. For additional information about this service, see Test Data Refresh | SAP Help Portal.
To use this service, please raise an incident to SAP Support.
9. Financial Statement Version Editing: Changes to the financial statement version must be made in the development system (they are also considered configuration objects) and transported across the landscape, ensuring a systematic and controlled process.
10. Configuration Management: Deleting configuration settings that have been saved or confirmed is only possible to a limited extent. Expert configuration may be needed or assessed case-by-case for specific deletions.
You can get an understanding in this regard by checking the accelerator ‘’ Configuration Activity.xlsm’’ in the roadmap viewer to identify the configuration points per scope item for which deletion will be blocked/restricted.
To do this, you go to Roadmap Viewer (sap.com). Switch to the Accelerators tab and find the accelerator under Prepare.
This is also applicable for organizational structure elements. For example, specified company codes, will always remain in the system environment.
For additional details, you can also check Guided Framework for Simplified Organizational Structure Set up in CBC for SAP S/4HANA Cloud | SAP B....
11. Pre-defined Depreciation Areas: In SAP S/4HANA Cloud Public Edition, depreciation areas are derived from accounting principles and countries and therefore pre-defined.
You can introduce additional statistical depreciation areas (only in Asset Accounting without posting in general ledger), with scope items 5HG - Asset Accounting – Additional Depreciation Area and 5KF - Asset Under Construction – Additional Depreciation Area. Their main use case is for specific industry-related requirements and reporting.
These scope items can be introduced only during initial scoping. For additional details, please see Additional Depreciation Area | SAP Help Portal.
12.Special GL indicators: In SAP S/4HANA Cloud Public Edition , special GL indicators are pre-delivered. It is not possible to change their description and/or create new ones, but you can assign the required alternative GL accounts. Please see note 2761212 - Create special G/L indicator in public cloud system - SAP for Me.
In conclusion, understanding these features and dependencies will empower you and your team to successfully manage your implementation of SAP S/4HANA Cloud Public Edition. Are there any other aspects you would like to explore further? If so, let us know.
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