SAP S/4HANA Cloud for contract accounting and invoicing ...

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SAP S/4HANA Cloud for contract accounting and invoicing Release 1908

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The Digital Economy has Transformed the Way Customers Engage

Abundance

Scarcity

INDUSTRIAL ECONOMY CONSUMER ECONOMY DIGITAL ECONOMY

PRODUCTS DESIRE ENGAGEMENT

1950sVinyl Disk/LP

1980sWalkman

2000sIPod

2010sCloud

Streaming

2020s1880sPhonograph/Gramophone

199019701960194019301920191019001890


The Digital Economy has enabled new services…and changed the way customers buy

BUY NOW SUBSCRIBE

THENTransaction focused

BUY NOW

Subscribe Usage

SolutionRevenue Share

Outcome Custom Discount

Custom Offer Freemium

And dozens more!

SUBSCRIBE

NOWRelationship focused


Business Model Innovation in the Digital Economyrequires S/4HANA Cloud for contract accounting and invoicing

DigitalCommerce

High-volume,global payment flexibility

Internet of Things& Connected DevicesReal-time, usage-based

services

PlatformBusiness Model

Multi-sided monetization

Manufacture converts to Service Provider

Connected Services

End user consumes ServicesJust in time

Distributor disappears

FROM PRODUCT TO SERVICE

Sell Products Sell ServicesVendor Service Provider

Orders Subscriptions & Metering

Items Events, kWh, Megabyte, Time, ..

Price Table/List Price Formula / rate plans


SAP delivers the Intelligent EnterpriseContract Accounting and Invoicing as part of the Intelligent Suite Digital Core

THE INTELLIGENT ENTERPRISE

features 3 KEY COMPONENTS:

1 Intelligent Suite

3 Intelligent Technologies

2 Digital Platform

1 Intelligent Suite

Intelligent Technologies3

2 Digital Platform


SAP S/4HANA has standard integration with SAP C/4HANAConnecting the front-office & back-office in the cloud

Front-Office Applications Back-Office Applications

Sales

Service

Marketing

Business Customers

Consumers

Service Reps

Sales

Marketing

Operations

Consumption Billing & Invoicing

Contract AccountingAR & AP

FinanceBusiness Model Design

Subscription Order Capture

Subscription Order

Management

Subscription Monetization

CFOLoB, CRO

Digital Payments

Add-on

Commerce

SAP S/4HANA CloudSAP Subscription Billing


Subscription and Usage BillingConsolidated Invoicing

*Source: SAP Performance Benchmarking

Consolidate billing data from multiple systems in a cloud billing platform

Use the Invoice to engage with customers

Manage and correct invoices flexibly using intuitive interfaces

Leverage user friendly analytical apps for Invoice manager for low touch efficiency and quick insight

27%fewer customer complaints when organizations expand billing and invoicing capabilities to meet customer needs*


Contract Accounting & Receivables Management Centralized sub-ledger for receivables and payables

*Source: SAP Performance Benchmarking

Native integration with S/4HANA Finance in the Cloud

Pay and settle payments immediately using native integration with SAP Digital Payments Add-on

Leverage native Fiori Analytical apps for the Payables & Receivables manager for quick insight into financial activity and postings

Integrated with S/4HANA Cloud Finance for core financial integration and universal journal

14%lower Days Sales Outstandingfor organizations where customers are billed electronically*


ContractAccount

12

ContractAccount

1

§ General Data§ Address Data§ Bank data § Credit Cards§ Communication§ Tax numbers

§ General Data§ Account Assignment§ Payment Conditions§ Link to BP Bank Data§ Link to BP Address Data

ContractAccount

2

ContractAccount

3

ContractAccount

14

Business Partner and Contract Account Master Data

ContractAccount

13

Payment relations

Business Partner 2Business Partner 1

Business Partner relations

Payment relations

Business Partner is used to capture information about an organization, person or group of persons or organizations in which the company has a business interest.

Contract Account allows postings to be group on an account level. Procedures can be defined at Contract Account level that apply when processing postings eg payments, dunning.

Enables compliance with data protection and privacy requirements

Create and print customer correspondence and view correspondence history

2AR


Invoice Creation for Usage and ServiceDigital content, IoT or other pay-per-use services

Digital content:

§ Customer purchases or uses 2 apps(optionally paid immediately by authorized credit card, or alternatively after invoicing).

§ The app purchases generate Billable Itemswhich are sent from the platform to invoicing

App X 1,99 €App y 2,99 €

SAP :

§ Billable Items are received from sending system§ Billable Items are processed, so corresponding

invoice is created in invoicing as well as posting document in the contract accounting (FI-CA) sub-ledger

Billable Items

ContractAccounting

invoice postings

Invoicing

Billable Items

Billable Items

2BG


Recurring and One-Off itemsBilling Plans

Why Billing Plans?

Billing Plans provide a simple mechanism for periodic and one-off charging within invoicing

What’s in Billing Plans?Billing Plan Items contain rules and information for creating billable items on a recurring or one-off basis. The Billing Plan can include the following information:• Start and end date

• Billing Cycle

• Amount and Currency

Examples of Billing Plans

Pay 10 € monthly music streaming and 20 € monthly video streaming, with one-off 5 € activation fee

2T3


Rating of Consumption Items

Consumption Item

Consumption of digital services Rating Invoicing

Consumption Item

Consumption Item

Consumption Item

Consumption Item Storage

Billable Item Storage

Rating

Billing Invoicing

Steps involved in rating:

1. Determination of pricing procedure

2. Execution of Pricing Procedure

3. Determination of Access Sequence per Condition Type

4. Search for Condition Record per Access Sequence

5. Return Results

3DX


Invoice Correction Processing

Display invoicing document Create Billing Request with Debit/Credit Memo

Process Billing Request with Debit/Credit Memo

Display resulting Billable Items

2BE

Invoice corrections can be applied individually or mass


Revenue Sharing and Partner Settlement

Customer

Train Tickets

Food DeliveryMovies

ParkingMusicRoyalties

Concerts

Content Platform

Consumes Services

Development Partners

ContentPartners

Partner Partner

Input to Content Platform

Convergent Invoicing

Partner Consumption

Item

Partner

Partner Consumption

Item

Partner

Customer Billable Item

Billing Document

CustomerBilling

CustomerInvoicing

PartnerBillable Item

Billing Document

PartnerBilling

Partner Invoicing

Partner SettlementCategory

Contract Account

Contract Account

Partner Consumption

Item

Partner

Customer Customer

Partner Partner Partner

Customer

Invoice to customer

Credit note to partner


Customer Initiated Payment – Process Payment Cards

invoicingPSPID and Transaction ID

passed via billable items

Post already paid invoice

Contract accounting FI

Transfer postings into G/LAccount statement processing

settles credit card clearing accounts

Poin

t of S

ale

SAP Digital Payments

1. Authorize payment

2. Settlement “to be billed”

Settlement “process answer”

2BI


Customer Initiated Payment - Payment and Check Lots

Payment lots

Check lots

Clearing control

Repayment

Payment by check

Payment by bank transfer

Clarification processing

Posting

2BI


Company Initiated Payments – Outgoing Payment Processing

Post credit documents Create outgoing payment documents by mass run

Manage and create payment media

After receiving the bank account statement create, close and post return lots

2DP


Contract accounting integration to a bank connectivity hub

2YM

SAP Multi-Bank Connectivity

Payment files

Account statements

Banks

SAP S/4HANA Cloud


Open Items Management - Dunning

Dunning by Dunning Procedure

Dunning level à dunning activities

Dunning procedure of contract account determines number and sequence of dunning levels

Amount Days

Dunning level 2

Dunning level 1

Amount Days

Dunning Activity

Dunning Activity

Dunning activity can be:

- Creation of dunning notice

- Trigger of clerk note

- Set a dunning block in contract

- Deactivate installment plan

2UJ


Open Items Management – Installment Plans

Source ReceivableDocument Number : 010008126Document Date : 15/03/2018Posting Date : 15/03/2018Document Type : A1Reconciliation Key : 150308R4

Co Code GL Account Description AmountUK01 700000 Revenue -100.00UK01 155000 Tax A/c -20.00

General Ledger Items

Business Partner ItemsB Partner Main Tr. Sub Tr. Start Key Due Date Amount100521 0100 0011 05/04/2018 120.00Instalment Plan040008234

Instalment PlanDocument Number : 040008234Document Date : 10/04/2018Posting Date : 10/04/2018Document Type : E8Reconciliation Key : BLANK

Business Partner ItemsB Partner Main Tr. Sub Tr. Stat. Key Due Date Amount100521 0080 0010 R 15/04/2018 40.00100521 0080 0010 R 15/05/2018 40.00100521 0080 0010 R 15/06/2018 40.00

Installment Plan items are statistical in nature.

There is no effect in General Ledger.

For the purpose of dunning and payment, installment plan items are considered and not the source open item

2UJ


Open Items Management – Interest Calculation

Interest notification

Customer info.Interest simulation

Item

sel

ectio

n

Post interest doc.

Mass interest run

Cash sec. dep. interest

Create installm. plan

Dunning run

Convergent Invoicing

Advance paymt bonus

Calculate and post interest

Credit interest(relevant for General Ledger )

Debit interestGeneral Ledgerrelevant or statistical?

2UJ


Open Items Management – Credit Clarification

BP 1Doc 128

EUR 45.34

BP 2Doc 128

EUR 23.74

BP 3Doc 128

EUR 68.55

Credit Items

Process Credit

Create Credit List Clarify Credits

- Transfer- Pay- Clear- Business

Partner Transfer

- GL Transfer- Write Off- Remain

Mass processing of credit items

Manual processing of credit items

2UJ


Revenue Recognition in contract accounting and invoicing

3KK, 3L3

Step 1 Step 2 Step 3 Step 4 Step 5

Identify contracts

Identify performance obligations

Determine the transaction price

Allocate transaction price to performance obligations

Recognize revenue


FICADocuments

Daily and Monthly Closing

§ Close the Reconciliation Key§ Transfer to General Ledger§ Execute Reconciliation Report

Daily

§ Close the Reconciliation Key§ Close Previous Accounting Period§ Transfer to General Ledger via Batch

§ Execute Reconciliation Report

Monthly

Recon Key 010608R4

Posting Date 01.06.2008

Business Partner 100346

Amount GBP 120.00

Revenue Account 700000

SummaryRecord

Recon Key 010608R4


Debit 214100 GBP 280

Credit 700000 GBP 280

FICADocuments

Recon Key 010608R4


Business Partner 100172

Amount GBP 160.00

Revenue Account 700000

FIGLDocument

Ref. Key 010608R4


40 Debit 214100 GBP 280

50 Credit 700000 GBP 280

Close Reconciliation

Key

Post Reconciliation

Key

2BK


Risk based IFRS9 reporting:

• High automated flat rate value adjustments • calculation with %age rate based on age grid

• Individual value adjustments

• Reporting in GL of value adjustments per risk class

IFRS compliant impairments and value adjustments

2BK


External Tax Auditing

Direct system access

External auditor has read-only access

Indirect system access

Auditor requests data from employee

File access

Extracted data is provided for import into external audit software

2SJ


Integration with SAP Subscription BillingSeamless Quote-to-Cash

SAP Subscription Billing

SAP Cloud Platform Integration

SAP S/4HANA Cloud

Create Subscription

Create Billable Items (BITs)

Billing Dataavailable

Create Invoice

Customer

BusinessPartner

Replicatecustomer

Create Quote

Replicatebilling data

Post Invoice to Contract Accounting

Create Billing Document

Create ContractAccount

If no contract account has been assigned yet

2PT


SAP Fiori: The User Experience of SAP S/4HANA

Single Entry Point§ The SAP Fiori launchpad will be the single

entry point to access all apps

Domain Specific Infos and Actions§ Users will quickly get an overview of what

needs their attention with Overview Pages, List Reports and Work Lists, and trigger quick actions or drill down to the next level of detail

Enter Details and Explore In-Depth§ Key and differentiating use cases will be re-

imagined with the SAP Fiori user experience§ All “classic” applications will have the SAP Fiori

visual theme


Use case in S/4HANA Cloud for contract accounting and invoicing

Digital paymentsadd-on

SAP Cloud Platform

Paymentauthorization

1

2

3

Paymentauthorization

Usage

Invoicing

Credit card settlement

4

5

8

6

Contract AccountingSub-Ledger

9

11

Purchase of digital goods

Payment Service Providers

Digital Store

Customer registers card details

Customer makes purchases of digital goods

Payment is authorized

4 Transaction record is created

Billable Item is loaded into invoicing

Bill is created and send to customer

Receivable is posted to sub-ledger accounting

Settlement process is triggered

9 Receivable is cleared

Settlement confirmed in Digital Payments Add-on

Summaries transferred to GL

1

2

3

4

5

67

7

8

9

10

10

11


S/4HANA Cloud

S/4HANA Cloud for contract accounting and invoicing

SAP Best Practices Content

Process Diagrams Configuration Documents

Pre-Delivered Customizing

Test Scripts

Identity and Access Management

Job Scheduling

Analytics Self-Service Configuration UIs

Cloud Development Principles

Cloud Integration Output Management


Self-Service Configuration UIs

Activate Value Check Configure Contract Acct Categories and Assign Number Ranges

Set Up Company Codes for Contract Accounts Receivable and Payable

Define Company Code Groups

Assign Company Codes to Company Code Groups

Define Variants for Payment Medium Program

Define Specifications for Paying Company Code

Maintain Document Types and Assign Number Ranges

Maintain Main- and Sub-Transactions and Set Parameters

Define CO Account Assignment Keys

Define Bank Clearing Account

Define Write-Off Reasons

The following self-service configuration UIs are offered in to allow customers to maintain their own entries:


SAP S/4HANA Cloud

S/4HANA Cloud is the Leading Intelligent ERP

§ Accelerate go-live & user adoption§ Rapid global deployments§ Flexibly scale to new business needs

Predictable,Lowest TCO

§ Shift from CapEx to OpEx§ Reduced need of IT administrative tasks§ No infrastructure investment needed

Continuous Innovation

§ Up to four releases per year§ Get latest capabilities & best practices§ Keep up with regulatory changes

Simple, Reliable,and Safe

§ Easy to configure & extend § Fully managed by a trusted 3rd party§ Complete data security & protection

Speed

§ Unmatched speed of innovation§ Comprehensive industry coverage§ Lowest total cost of ownership§ Lowest time-to-value§ Strong 2-tier ERP capabilities


Why SAP S/4HANA Cloud?

The Next Generation, Intelligent ERP for a Digital World

Empowering business userswith insights to act in the moment

Immediate Intelligent IntegratedBeyond automation, to predictive suggestion

Not only between your departments,but connected to the world

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SAP S/4HANA Cloud for contract accounting and invoicing ...

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