Top Answers to S 4 HANA Finance Interview Questions

1. What is SAP Simple Finance?

Criteria How S/4 HANA Finance wins?

User Experience Role-based with SAP Fiori App

Powered by SAP HANA platform

Applications and extensions Instant insight-driven applications

Available editions Cloud and on-premise

SAP Simple Finance is a primarily based on SAP HANA, which can be deployed in the cloud or
on premise. Designed to be convenient to use, it can deliver immediately insight for finance
professionals. It improves the current finance solution portfolio from SAP, its purposeful
strength remains the same while enabling non-disruptive migration.

2. List the key elements of the SAP Simple Finance?

The following are some of the handy key aspects of the SAP Simple Finance :

 Financial Planning and Analysis

With SAP Simple Finance, companies can forecast, price range and layout as an ongoing
approach. With the advantage of Predictive Analysis, groups can forecast to have an effect on of
commercial enterprise decisions on their organization economic reports.

 Finance and Accounting

With the benefits of advanced Accounting and Finance features, corporations can fulfil the
criminal terms. Further, they can finish the reviews of Finance on time.

 Financial Risk Management

With the benefit of Predictive Analysis, organizations can determine the dangers existing in the
processes of the Finance at the preliminary stage itself and take steps to remedy them. It is
simple to determine the exceptional feasible funding costs related to the market standards.

 Compliance and Risk Management

With the robust economic approach, it is uncomplicated to keep away from unauthorized get
right of entry to important facts in the enterprise. It is easy to perceive abuse as properly as fraud.
The corporations can be in a position to mitigate the danger concern in whole financial
processes.

3. What is posting period?

The Posting duration variant controls which posting periods, both regular and special, are open
for every organization code. It is viable to have a one of a kind posting duration variant for each
enterprise code in the organization. The posting length is independent of the fiscal year variant.

4. State the ways Of migration from SAP To Simple Finance?

Here are some of the ways that kingdom how the corporations can migrate from SAP traditional
FICO module to Simple Finance (that is SFINE 2.0). The ones who are New GL are capable of
migrating directly to Simple Finance. Those who are on usual GL want to migrate to New GL
first and then migrate to Simple Finance. This sort of migration takes place only with SPRO and
doesn’t require technical assistance. There is a distinction when migration is from the central
factor of Finance that supports with shifting information dispensed Enterprise Resource Planning
panorama and non–SAP Enterprise Resource Planning, utilizing SLT.

5. In SAP Simple Finance, even in case the client never uses the Asset
Accounting, Is mandatory to have a new Asset Accounting?

In Asset Accounting, in case there is no data that refers to the both customizing and transactional
facts that have to be shifted, in such a scenario there is no obligatory for doing the migration
steps in the Asset Accounting. If the consumer decided to use the Asset Accounting in their new
asset accounting later, then they can set up the personalizing in the IMG.

6. What is modeling studio?

There are several tasks a modeling studio performs in SAP Finance. Some of them are protected
in the following: Handle Data Services in order to enter the records from the SAP Business
Warehouse States, which tables are placed in HANA, the preliminary thing is to receive
metadata and then software data replication tasks, Utilize Data services for modeling, Handle
ERP requests connection Perform modeling.

7. What is the difference between Logistics and Transport?

Logistics: Transportation:

Logistics is the process of managing goods, resources and Transport is the movement of the goods
information from the source to the consumers in a manner from one point to the other. It is
that it fits the requirements of both parties. considered as part of logistics.
8. Is it viable for a corporation to have a high-quality money float however
additionally be in a serious monetary trouble?

Yes, it is. An organization that is selling off stock but delaying payables will exhibit
advantageous money float for a while–even although they’re in trouble. Another instance would
be where an employer has robust revenues for the length but future forecasts show that revenues
will decline. This would manifest when a business enterprise hasn’t focused on making certain
there have been new prospects/sales in the pipeline.

9. How is Account Type related to Document type?

We can differentiate the document type with a 2-character code like DG and so on but a account
type is designated by a single character code like D and so on. Specifying which debts a unique
file can be posted to. The frequent account sorts include:

 A Assets
 D Customer (Debtor)
 K Vendor (Creditor)
 M Materials
 S GL

10. Is it possible to exchange a present B/S, GL A/C to the P/L type?

Technically, you will be in a position to exchange all the fields, without the account number, of a
GL account in the Chart of Accounts area. Nevertheless, in this specific event when you

Change the B/S to P&L in the GL account type then can be sure that it is stable to carry the
application forward by saving the changes which will help the system to correct the suitability
for account balances.

11. What are the various Compression Techniques Available?

There are three kinds of Compression Techniques on hand they are –

1. Cluster encoding
2. Run-length encoding
3. Dictionary encoding

12. What is Document type?

SAP comes delivered with a quantity of Document Types, which are used in various postings.
The record kind helps to classify an accounting transaction within the system, and is used to
manage the complete transaction and determine the account types a precise document kind can
submit to.
For example, the file kind AB allows you to submit to all the accounts, whereas type DZ allows
you to submit only the consumer payments. Every report type is assigned a number range.

The common file kinds include:

 AA — Asset posting
 KG — Vendor credit score memo
 AB —Accounting document
 KN — Net vendors
 AF — Depreciation postings
 KR — Vendor invoice
 DG — Customer credit score memo
 KZ — Vendor payment
 DR — Customer invoice
 KG — Vendor deposit memo
 DZ — Customer payment
 SA — GL account document
 X1 — Recurring entry doc.
 X2 —Sample document

13. What are the essential grant chain challenges agencies face?

The five big challenges that organizations face these days is,

 Ignoring the continued growth of e-commerce as a channel in the industrial zone

 No attention to the practicable risk like risky transportation costs
 Over expectation that furnish chain administration technologies will fix everything, Over-
reliance on past performance to predict future sales
 Increase complexity delivered to furnish chain operations with implementation of pointless
applied sciences
 Lack of understanding of the full capacities of suppliers and service.

14. What is the SAP FI Organizational Structure

Client
|
Operating Concern
|
Controlling area1 Controlling Area 2
|
Co. Code 1 Co. Code 2
|
Bus area 1 Bus area2 Bus Area3 Bus Area 4

15. How is it viable for the employer to show high quality net earnings and go
bankrupt?
Two examples include deterioration of working capital (i.e. growing accounts receivable,
lowering bills payable), and monetary shenanigans.

16. What is deferred tax liability and what is the purpose?

A deferred tax liability is simply the contrary of a deferred tax asset. The deferred tax liability
occurs when a tax price said on the earnings statement is not paid to the IRS in the course of the
same length it is recognized–it’s paid at a future date. When there are differences in depreciation
price between e book reporting (GAAP) and IRS reporting Deferred tax liabilities can end result
which leads to variations profits as reflected on a company’s earnings assertion versus what’s
suggested to the IRS–and which results in lower taxes payable to the IRS (in the quick run).

17. What is the most essential assist that SAP Simple Finance does?

SAP Financial and Controlling module (one of the center modules of SAP from its R/2 days) is a
virtually advance presenting with high-quality width and profundity. SAP Simple Finance offers
extreme in-memory-reporting that takes out the limit between (B/W) controlling and cash related
reporting, incorporating arranging capacities and enhancing liquidity examination. PWC can
bolster the execution of SAP Simple Finance to Finance work flip into a proper enterprise
accomplice.

18. Is it possible for a company to have positive cash flow but be in serious
financial trouble ?

Yes indeed, it is. An organization that is auctioning off stock however postponing payables will
indicate positive income for a while– despite the fact that they’re stuck in an unfortunate
situation. Another case would be the place an organization has solid incomes for the period
however future forecast demonstrate that incomes will decline. This would happen when an
organization hasn’t concentrated on ensuring there were new prospects/deals in the pipeline.

19. Explain groupings and levels.

Groupings determine how to summarize the data, with quite a number groups and degrees
defined. A Group adds up a variety of financial institution debts and includes a variety of levels.
A Level, thus, denotes the sources of data or account transactions. Below the degrees are the line
items, which are displayed the usage of a listing display.

20. What is Transport Request?

It’s a kind of a collection of changes that are made in the development system. The information
pertaining to the type of change, the purpose of transport, request category and the target system
are all recorded. It is also known as Change Requests.

21. What makes a desirable Financial Model?

It’s important to have robust monetary modelling fundamentals. Wherever viable model
assumptions (inputs) need to be in one location and incredibly colored (typically financial
institution fashions use blue font for mannequin inputs). Good Excel fashions also make it
convenient for users to understand how inputs are translated into outputs. Good Excel models
additionally include error tests to ensure the mannequin is working efficaciously (e.g. the balance
sheet balances, the money glide calculations are correct, etc.). They contain ample detail, but no
longer too much, and they have a dashboard that sincerely shows the key outputs with charts and
graphs. For more, take a look at out our complete guide to financial modeling.

22. Why do two agencies merge?

To gain cost savings, obtain new technology, enter new markets, , remove a competitor, and
because it’s “accretive” to financial metrics. Learn greater about accretion in M&A.

23. Why do capital expenses enlarge an corporation’s assets, while different

expenditure like paying taxes, employees’ salaries, utility bills etc. do now not
amplify an organization’s asset base, nut as a substitute show up as fee on the
earnings announcement that decrease equity by means of retained earnings?

Unlike regular prices that furnish benefit over a short period time (i.e., employee’s work, taxes,
etc.), capital expenditures supply advantage over a longer duration of time. Because of the span
of their assessed benefit– normally various years– capital charges are capitalized by the stability
sheet, the place shorter time period bills are expensed on the income statement. This is the
difference between an asset and an expense. You’ll favor to start with internet income and then
proceed line by means of line thru the essential changes (depreciation, deferred taxes, and
working capital changes) required to arrive at cash glide from operations. In your rationalization
you’ll additionally choose to mention the following:
Capital expenditures, buy of intangible assets, sale of actual assets, and purchase/sale of
investment securities to locate money float generated from investing actives. Issuance/repurchase
of dept., sale of equity, and payment of dividends to locate money float from financing activities.
Adding the cash flows from operating, investing and financing activities you’re in a position to
come up with the whole alternate in cash. By taking the cash stability at the establishing of the
length and adjusting it for the whole alternate in cash you arrive at the money balance at the stop
of the period.

24. What is the Document alternate Rule?

The principle document of SAP doesn’t allow changing the relevant fields as soon as a file is
posted; any adjustments can only be completed via Reversal or extra postings. currency,
employer code, business area, amount ,account number, posting key, etc., are few such fields
can by no means be modified once the document is posted. However, SAP approves changing
some of the fields in the line objects such as charge method, charge block, residence bank,
dunning level, dunning block, etc. These can be modified file by means of file or by using the
usage of mass alternate for a range of archives in a single step. The modifications to grasp
information are tracked and stored per person for an audit trail.
25. In Simple Finance even if the consumer never makes use of the asset
accounting, is New Asset Accounting Mandatory?

In case in the Asset Accounting then there is no data, which refers to the both transactional as
properly as the customizing data, which have to be migrated, in such a state of affairs there is no
compulsion for performing the migration step in Asset Accounting. If decided to use Asset
Accounting later in new asset accounting, then you can set up the customizing in the IMG.

26. What is activity based costing?

It is an approach which helps in the breakdown of the expenses into specific things to do in order
to upkeep of accuracy in the distribution of charges in product costing.

27. How many charts of Accounts can be attached to a Company Code?

One or extra Operative Chart of Accounts can be assigned to a organization code. COA should
be assigned to a business enterprise code. This COA is the operative COA and is used in each FI
and CO. One Chart of Account can be assigned too many Company codes i.e., a couple of
business enterprise codes can either share the identical or have separate COA. But a corporation
code (Country specific Company code or International Company code) can have an us of a
precise COA also along with Operative COA. The hyperlink between the normal COA and the
US COA appears in the alternate quantity area of the G/L master record.

28. What are the substitutions and validations? What is precedent?

Validations are used to take a look at settings and return a message if the prerequisite take a look
at condition is met. Substitutions are similar to validations; they surely exchange and fill in field
values at the back of the scenes besides the user’s know-how in contrast to validations that create
on-screen messages to the user.

29. What are the configurations for Bank Statement Processing?

These are the following described or configuration required in your system:

 Start Variant
 Search ID
 Processing Type
 Internal Bank Determination

30. What is the difference between Company and Company Code?

Company Company Code

This is wherein the various types of company It is the smallest unit of the organization for
financial statement codes are rolled up so that the which a complete self-contained set of accounts
organizational unit is used in the legal consolidation can be drawn up for purposes of external
module. reporting.