Explain Contract Accounting in the Cloud

The SAP S/4HANA Cloud for Contract Accounting and Invoicing supports a fully integrated Consume-to-Cash process.

This training covers in various units the part Contract Accounting in the Cloud:

• Unit 02 covers the master data.
• Unit 07 gives an overview of contract accounting in the cloud.
• Unit 08 covers the payment processing.
• Unit 09 covers the open item and collection management.
• Unit 10 covers the closing activities and the general the ledger transfer.

Contract accounting has the typical functions of a receivables management system, such as receivables posting, payments posting and dunning execution. The typical document is the receivables document which is posted by the invoicing process with reference to individual contract accounts.

Contract accounting is a subledger that is designed for processing large document volumes. Therefore, contract accounting provides mass activities such as payment run, dunning run, and correspondence run. The contract accounting document has an optimized structure for storage space and is posted on the individual contract account level.

Contract accounting is integrated into the general ledger of SAP S/4HANA Finance to fulfill the legal requirements of accounting and revenue recognition. The integration is realized by transferring a reconciliation key with summarized postings to the general ledger.

Contract accounting uses intelligent technologies such as machine learning to match incoming payments.

Incoming customer-initiated payments are processed with payment lots.

Incoming and outgoing company-initiated payments are processed with the payment run.

Dunnings are processed in two steps, the dunning proposal run and the dunning activity run.

Configurable dunning procedures contain control attributes for the dunning process flow and define the procedure for situations where a business partner is in arrears. The dunning run determines the dunning procedures to be used and stores it in the items.

Dunning procedures determine and execute the dunning activities depending on the actual dunning level. You can create payment reminders or dunning letters and send them to your business partners to alert them of overdue receivables and to request payment.

The dunning history displays all dunned items and their dunning levels.

Correspondence can be generated on the basis of individual requests such as the account information, as well as via mass requests such as dunning letters and invoices.

Correspondence is created and output by the Output Management with the Print Workbench.

The Print Workbench is a tool to support the design and creation of customer-specific application forms with the help of a predefined set of data provision routines.

The correspondence history displays all created and printed correspondence, structured by correspondence types.

Foreign currency valuation is used to correct the receivables and revenue accounts posted in foreign currency due to different exchange rates between posting date and closing date.

Reclassification is used to reclassify receivables according to their remaining term.

Doubtful Entry and Value Adjustment is used to adjust receivables to reflect their actual estimated value in regard to the receivables that exist in accounting.

Contract accounting postings must be transferred periodically to the general ledger as total records for performance reasons. Contract accounting documents are automatically grouped and identified by a reconciliation key, the transfer unit to General Ledger Accounting.

The business role refers to a catalog with current SAP Fiori Apps for accounting in the cloud.

The business role is assigned to the business user of the cloud system.

The accounting manager minimizes overdue receivables and bad debt losses, analyzes and improves customer payment behavior, and optimizes non-value-added activities.

The accounting accountant deals with payment and credit clarification of B2B and B2C customers and works off complex customer requests according account clarification.

The accounting administrator is responsible for the planning, scheduling, and execution of jobs and mass activities including critical processes, such as payment run, and dunning run.

The accounting reconciliation specialist is responsible for the reconciliation of contract accounting with the general ledger.

The accounting configuration expert takes care of contract accounting configuration tasks.