Case study. Migration of books to the ERP system - SAP S/4 HANA

SAP S/4 HANA is the latest version of one of the world’s largest ERP systems. It connects all areas of the company, so all company departments are able to access the same information. This results in better efficiency and improved workflow, as well as brings time savings. The system utilizes a lot of innovative ideas, and therefore simplifies management mechanisms and automates many accounting and business processes.

Implementation at the Client’s

Recently, one of our accounting teams has participated in the process of migrating books to the SAP S/4 HANA system. Although in the case discussed the data were migrated from a different accounting system, it is worth bearing in mind that with the release of the new version of SAP S/4 HANA, its manufacturer announced that it would soon stop supporting the previous versions of the system. For many existing SAP users, it will be therefore inevitable to migrate their data to the new version of the system.

Data migration is a key element of any system change therefore it is worth paying a lot of attention to it so as to ensure that the data are transferred correctly. In many cases, this affects both balance sheet compliance and tax compliance in the current period, but also in future periods. Depending on the type of the data transferred, the data transfer may also be reflected in payments made to contractors or to the tax office.

The first stage of the discussed migration was to map accounts from the current system to the new chart of accounts in the SAP system. The next stage was to determine the types of migrated data and the sources of their acquisition. Then, test migration files were prepared, with appropriate fields populated. The process of adapting the appropriate fields and data formats from the current system to the SAP requirements proved a challenging one, since both systems differ to a high extent. Previous manually-performed solutions, such as withholding tax (which previously was controlled in separate databases), were also imported into SAP, thus the entire process became automated.

The migration process included migrations of the general ledger, subsidiary ledgers and the database, i.e.:

1. Individual account balances.
2. Fixed and intangible assets module.
3. Warehouse.
4. Prepaid accruals module.
5. Database of suppliers and customers.
6. Open positions on supplier and customer accounts.

Loading the databases into the production system was preceded by checking the correctness of the data on the test systems. Only when the correctness of the data was assured, could the data be transferred to the production system. Finally, it was necessary to agree and check:

1. Correct mapping of individual accounts of the previous system to the SAP system.
2. Reconcile the opening balance of the general ledger accounts with the closing balance.
3. Compare the balances of the general ledger accounts with the subsidiary ledger accounts.
4. Check the correctness of supplier and customer databases.

The final stage of data migration was to check and scrutinize the system after migration to the production system. Because the data migration also included contractors’ data, special attention had to be paid to the correctness of payments effected from the SAP system and to reporting of withholding tax, which was also transferred to the system for automated processing. The above was crucial in terms of the correctness of current workflow and in terms of the potential consequences for the company in case of any errors.

Summary of implementation of ERP – SAP S/4 HANA

The whole process proved a highly interesting experience for the entire team and entailed a high degree of responsibility, both as for the correctness of the prepared data and tests, but also in terms of the post-migration scrutiny. Thanks to the huge commitment of all persons involved, their conscientious work, and experience in implementing this type of projects, we managed to successfully complete the process.

At MDDP Outsourcing, we ensure that the systems comply with applicable regulations and we attach great importance to the requirements and expectations of our Clients. The implementation of the latest version of the financial and accounting module in ERP – SAP S/4 HANA required taking a look from a bigger perspective at the processes which are part of the SAP systems. Our experience in this area allowed our Client working on SAP to go through the entire process smoothly.

Author: Magdalena Włodek, Junior Manager in MDDP Outsourcing