1.

6 Important Terminology
In this chapter, the following terminology was used:

● Columnar store
Data is stored in columns instead of in the more traditional rows; this allows
speedier read performance and greater compression capabilities. The
downside is suboptimal transactional processing.

● In-memory technology
Data storage in RAM instead of in disks to capitalize on lower latency and
read/write times. The technology still makes use of disks for historic data and
backup purposes.

● Intelligent technologies
Technological frameworks that are used in conjunction with SAP Business
Technology Platform to develop next-generation applications. Relevant
technologies include machine learning, IoT, process automation, predictive
analytics, blockchain, data intelligence, and big data.

● SAP Business Technology Platform

SAP Business Technology Platform is a development and deployment
platform that aids in the creation of intelligent, integrated, and mobile-ready
applications to support business operations.

● SAP Fiori
A new common design paradigm for all SAP applications. The design goal is
to make business apps intuitive to use and available on all platforms and
devices. SAP Fiori is based on the following design principles: role-based,
responsive, simple, coherent, and instant value.

● SAP Fiori for SAP S/4HANA

A group of applications that are designed for SAP S/4HANA. There are three
basic app types: transactional, analytical, and factsheet.

● SAP Fiori launchpad

The UI "cockpit" for SAP Fiori that is accessed through any modern web
browser without extra software requirements. It displays several applications
in flat, rectangular forms called tiles. The applications available depend on the
 user's role and authorizations. The SAP Fiori launchpad offers many
Customizing options for the end user, such as theme selection, custom
grouping, and displayed application selection.

● SAP Fiori launchpad designer

Administrator interface to customize the catalogs and groups available in the
system. You define the configuration for SAP Fiori tiles in the Catalog section
and for the tiles included in groups in the Group section.

● SAP Gateway server

The server used to connect SAP Fiori to one or more SAP S/4HANA, SAP
ERP, SAP Business Warehouse (SAP BW), and other such backend
systems. SAP Fiori app configuration is performed here, as well as SAP Fiori
user maintenance.

● SAP S/4HANA
The new ERP system from SAP that leverages SAP HANA to simplify the
code and data structures. It's designed to be the digital core for all business
applications of the customer and to allow businesses to go digital. It's offered
on premise with a traditional ownership model and in the cloud with a
subscription model.

General ledger accounting

● Account group
An element that categorizes general ledger accounts. It controls the number
range and types of accounts that can be created.
● Chart of accounts
A complete register of general ledger accounts required to cover the business
needs of the company codes it's assigned to. There are three levels of charts
of accounts:
● Operational chart of accounts
● Local chart of accounts
● Group chart of accounts

● Client
The client is the highest organizational unit and can be seen in business
terms to be the equivalent of a corporate group or group of affiliates.

● Company code
The most important organizational unit in financial accounting, it represents
the legal entity for which a complete, self-contained set of accounts can be
created.

● Document splitting
A function that makes account assignments defined as splitting characteristics
to all lines of a document based on specific rules.

● Document type
The document type categorizes business transactions and defines the
relevant account types and the number range of the documents.

● Extension ledger
A delta ledger that is added on top of an underlying ledger for special
valuation purposes.

● Fiscal year variant

A variant that defines the start and end dates of the fiscal year and defines the
posting periods available during the year.

● Parallel accounting with accounts

A method of parallel valuation accounting using separate sets of general
 ledger accounts for specific accounting functions that are valuated differently
in the separate accounting principles.

● Parallel accounting with ledgers

A method of parallel valuation accounting using ledgers to depict separate
accounting principles.

● Posting key
A key that defines whether a line amount is debited or credited and the type of
account posted to. A field status is also maintained on the level of the posting
key.

● Posting period variant

A variant that controls the open and closed periods for company codes. You
can assign multiple company codes to a single variant to control the periods
jointly.

● Segment reporting
A reporting requirement of IFRS and US GAAP legal reporting which
stipulates that company codes need to be able to produce complete balance
and P&L statements per major business activity segment. In SAP S/4HANA,
the requirement is covered with the profit center and segment account
assignments in conjunction with document splitting.

● Standard ledger
A ledger that holds values for separate valuations; often it represents a
separate accounting principle.

● Tax code
A key that controls the tax rate and tax account posted to.

● Tolerance group
Assigned to each user, it defines the maximum amounts a user can post, as
well as the maximum discounts they can grant.
ACCOUNTS PAYABLE & ACCOUNTS RECEIVABLE

● Automatic payment program

Handles payment transactions for customers and suppliers. You define the
selection parameters for the open item selection. The application first
generates a payment proposal. After the proposal is reviewed and revised,
you execute the payment run. The system generates the payment documents
and clears the relevant open items. The program also generates and prints
the payment media accordingly.

● Business partner
The unifying master record for customers and suppliers in all SAP S/4HANA
subsystems from financial accounting to materials management, sales and
distribution, human resources, and so on. The system is set up with real-time
integration with the financial accounting customer and supplier, so all master
record details are driven by the business partner.

● Business partner categories

Defines whether the business partner is a person, organization, or group. The
setting controls some of the basic data.

● Business partner grouping

Defines the number range of the created business partner. For the
customer/supplier integration with business partners, the customer and
supplier account groups are assigned to the business partner grouping.

● Business partner role

Defines the types of business relations your company has with the business
partner. Field definitions can be maintained on the business partner role level.
Examples of roles include customer (financial accounting) and supplier
(financial accounting). All business partners are assigned to the general
business partner role. You can define business partner role groups for
business partner roles that should be maintained simultaneously.
● Business partner type
An additional grouping characteristic for the business partner for which you
can define a separate field status.

● Correspondence type
Defines the form of communication that is printed or sent. To align with your
customers and suppliers on amounts owed, open items, and so on, you can
use the correspondence functionality of the system to communicate in a
standardised way.

● Customer /supplier account groups

Groups customers and suppliers by various criteria in financial accounting. In
SAP S/4HANA, they are mostly entered as reporting filter criteria because
many of the financial accounting business functions associated with the
account group are now controlled by the business partner configuration.
A major role of the account group is to separate normal customers and
suppliers from one-time customers and suppliers. For one-time accounts, you
enter details during posting and don't maintain a permanent master record.
● Dunning areas
Subdivides a company code into areas of responsibility for dunning. This
allows you to configure different rules and criteria for dunning in different
business areas.

● Dunning block reasons

Assigned to document line items to exclude them from dunning. You can
assign a preconfigured dunning block reason or define your own in
Customizing.

● Dunning procedure
Assigned to business partners to activate dunning for them. The procedure
defines the number of dunning levels that can be assigned and all the rules
for calculating the dunning level, dunning charges, dunning-relevant special
general ledger indicators, and the dunning letter forms and texts.

● Dunning program
Generates dunning letters that you send to customers (and suppliers with a
debit balance) to inform them of payments due. After entering the selection
parameters for the dunning program to select the accounts to analyze, the
application produces a dunning proposal list. You review and revise the list
and proceed to print out the dunning letters.
 ● Payment block reasons
Indicate the reason for blocking a payment and control how payments are
unblocked.

● Payment medium workbench (PMW)

Handles all electronic payment medium creation and definitions. You define
the XML forms for the DME in the DMEE Tree and assign them to payment
methods.

● Payment methods
Define the valid way to send and receive payments. They are defined on the
country level and on the company code level. The valid payment methods are
also defined on the business partner level. The payment method can be
maintained on the document line item if the valid method is known during
posting.

● Special general ledger indicator

Used to post to different reconciliation accounts than the main reconciliation
account defined in the customer/supplier master record. The special general
ledger indicators are defined on the client level and control the business
transaction being executed. Special general ledger transactions are either
noted items, free offsetting entries, or automatic offsetting entries. Down
payment requests, down payments, bills of exchange, guarantees, and
individual value adjustments are examples of transactions that use the special
general ledger functionality.

● Terms of payment (payment terms )

Define the dates and amounts due to be paid to or received from your
business partners. You define the rules for the terms in Customizing and
assign them to the business partners and your document line items.

ASSET ACCOUNTING

● Account determination
Where all balance sheet and P&L accounts are assigned per depreciation
 area for APC, depreciation, and special reserves postings. You assign the
account determination to one or more asset classes.

● Asset class
Used to group assets according to basic criteria, including the general ledger
accounts updated, the default valuations and depreciation settings, and the
nature of the asset. All assets are assigned to an asset class, which is used to
control the data maintenance screen and number range.

● Asset transaction type

Holds definitions for all aspects of an asset transaction, such as if it's a debit
or a credit, if the asset is capitalized or retired by posting, and more. Each
transaction type belongs to a transaction type group that defines many
characteristics of the transaction. Examples of groups include acquisitions,
retirements, transfers, and depreciation.

● Asset under construction (AUC)

Type of asset being built/produced that acts as a cost collector for capital and
other expenditures. When the asset is complete (or at various other intervals),
the AUC is capitalized into a final asset.

● Asset value date

Date defined during posting for which the transaction is updated for asset
accounting. This date is the basis for deciding the capitalization date and
ordinary start date for depreciation for asset acquisitions and the retirement
date for asset sale or scrapping.

● Chart of depreciation
Organizes all depreciation areas valid for a country. Asset accounting is
activated for a company code by assigning the chart of depreciation to the
company code.

● Depreciation area
Used to calculate values according to various legal and internal reporting
requirements. Each depreciation area is assigned to an accounting principle.
A depreciation area can post all values, post only depreciation, or not post at
all.
 ● Depreciation key
Defines the way the depreciation is calculated for an asset, including the
method for depreciation (straight line, variable), the depreciation start date
definition (in relation to the acquisition date), and more.

● Low-value asset (LVA)

An asset that has an acquisition value below a predefined threshold. These
assets are posted to a separate LVA class and are depreciated fully within the
year of acquisition.

● Technical clearing account

Account that facilitates external asset transactions (acquisitions from
suppliers, sales to customers, etc.). The account is posted in the operational
document and is credited by the accounting-principle-specific documents, so it
always balances to zero after each posting.

FINANCIAL CLOSING

● Accounts payable/accounts receivable regrouping

Regrouping payables and receivables to change the way values owed or due
to be collected are displayed in the balance sheet to comply with local or
corporate accounting standards. The program reads the defined sort method
and accordingly can move supplier debit balances to receivables and
customer credit balances to payables, post payable receivable amounts to
separate accounts per when they are due, and transfer balances for
reconciliation accounts changed midyear.

● Accrual
A posting of an expense or revenue before an invoice is entered for said
expense/revenue. It's used to represent the cost in the period it's incurred in
or the revenue in the period it's made in for a more realistic value reporting of
your books. For example, when a customer pays $1,000 USD up front for four
months of service, you put the amount into a deferred revenue account and
subtract $250 USD from the account each month.
● Accrual engine
A framework that enables and automates the calculation and posting of
 manual and purchase order accruals. This was introduced in the 1809 release
of SAP S/4HANA and is fully integrated with the Universal Journal.

● Accrual item
A line item within the accrual object that specifies the accrual calculation and
posting per accrual type and ledger group.

● Accrual object
A contract-like master record that holds all the information needed to
calculate, manage, and post accruals for a business transaction.

● Balance confirmation
A form of communication with your suppliers and customers to inform them of
transaction balances and request confirmation from their side to check and
send the values as held in their books.

● Carryforward
A process executed to bring balances to the new fiscal year. For balance
sheet accounts, the balances are brought forward so that the opening balance
of the new year matches the closing balance of the previous year. For P&L
accounts, the opening balance is 0 because the closing balances are
transferred to the retained earnings accounts.

● Deferral
The "spreading out" of incurred expenses or billed revenues over the period in
which they're made. For example, if you pay $12,000 USD for six months of
rent up front, you put the $12,000 USD into a deferred expense account and
debit the account $2,000 USD each month for six months.

● Financial statement version

An object that structures general ledger accounts to produce balance sheet
and P&L reports for local legal authorities and internal reporting requirements.
● Foreign currency valuation
The process to valuate open items and account balances per the currency
translation rate on the key date.

● Goods receipt/invoice receipt account

An account for which the balance is made up of mismatches from goods
 receipt amounts versus invoiced amounts. At the end of the period, you clear
the account and reverse the clearing at the beginning of the next period.

● Individual value adjustment

Either a post to a special general ledger or the entry of a flat-rate individual
value adjustment for unsecured or overdue receivables to depict doubtful
receivables in separate sections of the balance sheet.

● Intercompany matching and reconciliation (ICMR)

The process to ensure items and balances among affiliate companies are the
same for company codes involved in a business transaction.

● Physical inventory
The process of counting actual physical stock quantities at your warehouses.

● Recurring entry
A journal entry that can be repeated unchanged at regular intervals (in
months), which you define in the header section.

● Reporting characteristics
Criteria per which you select and display data. Organizational units, master
data, and time characteristics (year, period, etc.) are examples.

● Reporting key figures

Key figures include stored values and quantities and values that are
calculated based on fixed formulas.
● SAP S/4HANA Financial Closing cockpit task list
Task list that defines the specific tasks to be executed during period end. You
execute, monitor, and analyze the task list execution in the SAP S/4HANA
Financial Closing cockpit.

● SAP S/4HANA Financial Closing cockpit task template

Task template that holds generic closing tasks to be executed for closing on
various organizational unit levels.
 ● Stock valuation
The process to update the valuation of the materials in your warehouses in
accordance with the latest prices maintained in the material master records.

● Valuation area
The object that bridges the valuation method, connecting it with an accounting
principle. You also define at least one and up to three currency types per
valuation area. You enter the valuation area when posting foreign currency
and other valuations.

● Valuation method
The Customizing object that controls the definitions for the valuation
procedure (always evaluate, lowest-value principle, and strict-lowest-value
principle), the document posting parameters, and the exchange rate type
determination.

ORGANIZATIONAL ASSIGNMENTS AND PROCESS INTEGRATION

● Application area
The basis for validation and substitution creation. Application areas map to a
component in SAP S/4HANA, such as financial accounting, controlling, asset
accounting, project system, joint venture accounting, funds management, and
so on.

● Archiving object
Specifies which data is to be archived and how. The scope of the objects is
usually preconfigured in the system because the process of removing data
can have adverse effects if all parameters for all application areas aren't
considered.

● Archive variant
Defines the parameters for the execution of the archiving run. On a generic
level, this includes whether the run is a test or productive one and the types of
logs that will be output.
● Bank directory
A list of all banks created in the SAP S/4HANA client you're working in. Banks
must be in the bank directory to be assigned to business partners.

● Bank group
A grouping of banks used in the payment process that helps to determine the
house bank to be used for sending or receiving payments.

● Callup point
Defines the point in time when and the area in which a specific
validation/substitution is evaluated. It can be the Document Header, Line
Item, or Complete Document.

● Current partition
The in-memory partition of the SAP HANA tables (also referred to as the hot
data storage area).

● Data aging
The process of transferring data from the in-memory partition of a table to a
slower, disk-based storage medium to free up resources to take advantage of
the memory storage area for the active business data.

● Data archiving
The process of removing old, mostly irrelevant data from the active database
and transferring it to external media for retrieval when required.

● Formula editor
The tool you use to create the Boolean logic strings for prerequisites, checks,
and rules used in validations and substitutions.

● Held document
A incomplete journal entry document that a user has saved for processing
later. It's saved by the user with an ID, but the system doesn't assign a
document number to it.
● Historical partition
The slower, disk-based partition of the SAP HANA tables (also referred to as
the cold data storage area).

● House bank
A bank with which you do business. It's defined also as a business partner,
and you connect your bank accounts to it.

● Organizational object
Objects used to create the organizational plan in organizational management.
For the workflow process, it defines who can process workflow work items.
The following object types are available:
● Organizational unit
● Position
● Job
● Work center
● Task

● Parked document
An incomplete document for which the system assigns a document number
and that can partially be in reports and a few business processes, such as tax
reporting and payment requests.
● Release approval path
The object that defines, per company code, document type, amount, and
release group, which human resources organizational unit will process the
workflow items.

● Release group
A grouping that categorizes business partners to assign different release
approval paths to them.

● Rules
Used to define common logic strings for prerequisites and checks in the
validation and substitution step definitions.

● SAP Business Workflow

Enables the design and execution of workflow processes within the SAP
S/4HANA system.
● Sets
Flexible groupings for values of various characteristics and key figures. Sets
can be assigned to validation and substitution steps to simplify the code
written with the formula editor.

● Substitutions
Used to create rules to change values for fields that were entered or left blank
during a business transaction.

● Subworkflow
The object that defines the specific detail such as the number of release
levels for a workflow. A workflow can have many subworkflows.

● Validations
Used to create and perform custom checks for values and combinations of
values entered as the business transaction is being processed.
● Workflow
A tool that facilitates the automation of business processes that consist of
multiple steps and processors. In addition, in the system, this object defines
the framework for the workflow process.

● Workflow variant
The object assigned to a company code that defines the activation of the
workflow for document parking.