Sap S 4Hana: Subledger Solution for Financial Products

Sap S 4Hana For Financial Products Subledger

Financial Products Subledger is a solution that combines both financial and cost accounting. It enables the generation of multiple valuations for financial products while ensuring they are all reconciled.

Deployed as an add-on to SAP S/4HANA, Financial Products Subledger is based on a highly simplified core and designed for large data volumes, making use of SAP HANA capabilities. With SAP Fiori user experience and a streamlined data model, it is designed to run simple.

Banks and financial institutions are frequently required to comply with accounting regulations in various countries. International companies must adhere to valuation principles set by national authorities and organizations, as well as standardized accounting standards. The requirement to prepare an annual financial statement necessitates the allocation of time periods, allowing companies to present their current financial status on the balance sheet date along with their economic progress since the previous balance sheet date.

Financial Products Subledger integrates seamlessly with Financial Accounting. It receives target values from the relevant source systems, and documents these in the form of subledger documents at contract or portfolio level.

The subledger records are combined into general ledger records and then moved to the general ledger. Standard interfaces can be utilized to ensure that all the necessary information from the subledger is accessible for reporting purposes during accounting period closures.

In Financial Products Subledger, you have the ability to generate predictions, strategies, and simulations to analyze how potential future situations would impact the financial status of insurance agreements.

In SAP S/4HANA for Financial Products Subledger, you have the option to install either a single-instance or dual-instance setup. With a single-instance installation, both the back end and front end are deployed together, while in a dual instance installation, they are deployed separately.

The Financial Products Subledger allows for the integration of Subledger Accounting and the allocation of secondary costs, such as internal activity allocation and overhead costs. This ensures that all primary costs, revenue, and secondary costs are viewed together in a unified manner.

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– Ensuring adherence to regulatory reporting requirements

– Generating automated reports with multiple valuations

– Utilizing a centralized database for shared information

– Implementing standardized processes across different functions

– Aligning accounting closing procedures with business planning and sensitivity analysis

The financial services industry has experienced significant transformations in its reporting practices over the past few years, and this trend is expected to continue. The sector faces numerous regulations that it must adhere to, including but not limited to certain key ones.

Some of the financial accounting standards that are relevant for SAP S/4HANA for Financial Products Subledger include IFRS 9, IFRS 15, IFRS 17, and US GAAP LDTI (Long Duration Targeted Improvements).

– Recognition of revenue through deferral or accrual methods based on performance obligations

– Handling accounting processes for insurance contracts

– Management of contracts related to insurance

In order to meet the aforementioned regulations, it is essential for any company to establish appropriate systems and procedures. By implementing a comprehensive product subledger, organizations can effectively handle the intricacies and necessary data elements within the subledger, facilitating a smoother transition to the standard requirements.

Day Processing​

Utilize daily processing to record and document transactions related to operational flow and changes in master data.

End-of-Day Processing

The software produces postings based on business transactions and modifies contracts or securities positions when there are changes in the master data.

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Period-End Processing​

Utilize period-end processing to revise accounting positions according to important dates and record any modifications.

Year-End Processing for Financial Products Subledger

Utilize year-end procedures to finalize and initiate new fiscal years by establishing an opening balance for the year.

Period-Opening Processing

Period-opening processing is utilized to reset documents that were generated during period-end processing or end-of-day processing (contract) on the preceding day.

Financial contracts and securities have various configurations and characteristics when it comes to their handling in the Financial Products Subledger. These attributes are categorized into distinct product segments based on business considerations.

– Available cash

– Amount of money held in central banks

– Funds deposited in credit institutions

– Accounts used for daily transactions

– Savings accounts for storing money over time

– Fixed-term deposits with specific maturity dates

– Financial instruments such as exchange-traded derivatives

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The complete meaning of FPSL in SAP

With the Financial Products Subledger (FPSL), you have the ability to establish a single, standardized, and centralized database that facilitates seamless integration among operational, analytical, and financial domains. This enables efficient collaboration and streamlines processes across these interconnected areas.

SAP FSDP: An Introduction

SAP FSDP or FSDM serves as the basis for SAP FPSL to access financial transactions, events, and business transactions from pre-defined data models in Native HANA XSA 2.0. Indian banks primarily rely on non-SAP systems for their OLTP operations.

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Distinguishing GL from subledger

The general ledger and the subledger are two crucial components in the field of accounting, each serving a distinct purpose. The primary distinction between these two is that while the general ledger comprises a comprehensive set of master accounts, the subledger consists of accounts that form a subset of the general ledger.

Types of ledgers in SAP S4 Hana

In a standard SAP system, the Leading Ledger, also known as 0L, is considered the default ledger. It is used for recording financial transactions and generating reports. However, you can also define your own Non-Leading Ledger according to your specific requirements.

A Non-Leading Ledger allows you to maintain additional accounting records alongside the standard ledger. This means that you can have multiple ledgers within one system to cater to different reporting needs or legal requirements. For example, if your organization operates in multiple countries with varying accounting standards, you can create separate non-leading ledgers for each country.

Furthermore, Extension Ledgers provide even more flexibility by allowing you to define “non-standard” ledgers that go beyond what is offered by the standard and non-leading ledgers. These extension ledgers enable organizations to capture additional financial information or perform specialized calculations specific to their business processes.

1. Leading Ledger (0L): The default ledger in a SAP system used for recording transactions and generating reports.

2. Non-Leading Ledger: A custom-defined ledger that runs parallel with the leading ledger and caters to specific reporting or legal requirements.

3. Extension Ledgers: Custom-ledger options that offer further flexibility by allowing organizations to capture extra financial data or perform specialized calculations beyond what is provided by standard and non-leading ledgers.