Question

What are your thoughts on the following statement? Compare that with your experience using SAP S/4 HANA.

“In the late 1800s, firms began to create less labour-intensive devices for operating their accounting information systems, including adding machines and cash registers. These developments allowed for data to be more efficiently captured and are significant in terms of the controls that operate in the organisation today.”

Answer 1

Yes. Comparing with the earlier accounting information systems, SAP S/4 HANA is the more efficient and effective. Manual accounting system is time consuming and more manpower required for prepare the accounting and finalisation of accounts.

Data flow from different departments in the organisation : Accountants used to post the manual entries for the different department transactions in the earlier accounting system. But through SAP HANA application, the cost flows automatically. For example, in manual accounting system, the material consumption cost manually generates by the stores or inventory department and give the same to the accounts department for pass the Journal entries. Whereas in SAP, if the material issue entry passes by the stores department, the same is automatically flow reflects in financials.

Controls : In earlier accounting system, generation of the analytical data is very difficult. Control are very weak. Through SAP, we can put the controls like Gate Controls, asset control, cost control and many more control systems we can place and review the same in different intervals. Through earlier accounting systems, putting the controls and review the performance is difficult for large scale industries.

Financial planning and budgeting process : Earlier budgeting process is very time consuming and expensive, which leads to burden for the medium and small scale companies. Now with the help of the SAP application, even small scale companies are preparing the plans and budgeting process with the lesser time and cost.

Real time data : With the help of SAP, we can run the financial closing in a much faster way. SAP gives us the real time data and results. In current day statutory requirements, we need to close the financials very fast to compile with the government bodies regulations. Compare with the earlier accounting system, SAP gives the faster and better real time information.

Data Accurate : Compare with the earlier accounting information system, the data generated by the SAP is accurate and truth. Can apply the accounting principles and accounting standards properly. In earlier system, the standards are depending on the person, who is maintaining the accounts, in SAP application runs all the principles and standards.

Data Duplication : Data duplication does not happen in SAP. In Manual accounting system we need to maintain the same data in different places. For example, in manual system, we need to pass the Journal entry and the entries to be posted manually in General ledgers. From General ledgers to Income statement. The profit to be posted in balance sheet manually. In SAP if you pass a Journal entry, the data will flow in to General ledger, income statement and balance sheet automatically with the help of SAP application.

Transaction and analytical data combined : In earlier accounting system, we need to first pass the transactions and we need to prepare the analytical data separately. In SAP HANA application, if you pass the transaction, you can generate the number of reports and we can analyse the data in number of ways. For example, if you passed the transaction of all the purchase entries in SAP application, you can analyse the data like Vendor wise analysis, which vendor is providing the material or service in lowest cost, material wise analysis, creditors analysis and many ways we can generate and prepare the data.

Smart application : With the help of the SAP smart application, making the payments and clearing against the outstanding payable is easy and accurate. In manual system, there is chance of manual errors, like excess or shortage of payment generation.

Centralized Finance : We can sit in head quarters and maintain the finance positions. We can generate the data through SAP HANA and take the management decisions. Monitoring of the different units and profit centres are very easy in SAP HANA. In earlier accounting system, it is very difficult. In modern day business circumstances, it is even impossible to do complete the accounting with manual system.

Consistency : In manual system, consistency depending on the person. Consistency may not be possible in manual system. SAP will give any point of time, the same consistent results.

Data base : Maintaining the data base of the vendors, customers and government bodies is very easy in SAP. In earlier accounting system, it is very difficult.

Enterprises are able to enhance control and compliance, minimize closing workload, costs and even close the books faster using the SAP HANA. Proper planning can be done.