Accrual Engine in S4 HANA 1909 - Manual Accrual & How It Is Processed Periodically - Part 1 - SAP Blogs

2/25/2021 Accrual Engine in S4 HANA 1909: Manual Accrual & how it is processed periodically – Part 1 | SAP Blogs
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Ratul Chakraborty2
November 24, 2020 6 minute read
Accrual Engine in S4 HANA 1909: Manual Accrual & how it is processed periodically
– Part 1
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Accrual processing is a typical and painful period end activity for the business users. SAP has come up with Accrual Engine in S4 HANA 1909 to make
accrual processing easier. In this blog series we will discuss on Manual Accrual – how it is con gured and how it is processed on each period end. I
have divided the complete article into 2 blogs:
Part 1 – that describes the theoretical part of Accrual Engine
Part 2 – We will see a DEMO in the system
What is Accrual Engine:

https://blogs.sap.com/2020/11/24/accrual-engine-in-s4-hana-1909-manual-accrual-how-it-is-processed-periodically-part-1/ 1/24
Accrual postings belong to the typical period-end closing activities, since the amount of the necessary accruals is not usually known until the end
of the period.
From a technical point of view, the Accruals Management functions build on the Accrual Engine, which calculates the accruals that are posted in
Financial Accounting.
Accruals do not need any separate journal entries but are saved as line items in the Universal Journal with REFERENCE KEY = ‘ACES4’
Accruals supported by Accrual Engine:
Manual Accruals
For manual accruals, you enter the data of the business transaction to be accrued or load the corresponding data to the Accrual Engine. The system
calculates the amounts to be accrued.
Purchase Order Accruals
In purchase order accruals, the required data is taken from the Materials Management component, transferred to the Accrual Engine, and
automatically converted to accrual items. The system calculates the amounts to be accrued
In this blog series we will discuss on Manual Accrual.
Business needs & Motivation: Advantages of S4 HANA Accrual Engine
The S/4HANA Accrual Engine
1. Is optimized for S/4HANA
It is fully integrated into the General Ledger:

All currencies of General Ledger are supported
The Accrual Engine postings are stored only as line items of the universal journal entry, in table ACDOCA.
The scal year variant of the G/L ledgers are supported.
Standard FI reversal, e.g. using transaction FB08 or F.80 is supported.
There is no redundant storage of the postings as original document.
No reconciliation e ort any more with G/L: Transaction ACACTRANSFER ‘Transfer of ACE Docs to Accnting’ is obsolete.
2. There are no summary records in the Accrual Engine:
No limitation of the number of elds in reporting.

No separate balance carry forward run required. The G/L balance carry forward is su cient. Transaction ACACCARRYFORWARD is obsolete.
Enables Complex Postings – More than two line items are possible by customer-de ned of posting schemas.
Allows optional review and/or approval of periodic accruals at period end.
3. Mass Upload of Accrual Objects is possible:
Create or Update accrual objects with the total amount – For creating or update accrual objects. The total accrual amount is a required eld.
Create or update accrual objects with periodic amount – For creating or updating accrual objects. The periodic accrual amount is a required eld.
Update periodic amounts only (Quick mode) – For updating existing period periodic accrual objects.
Key Elements:
Delta Logic for Accrual Postings:
You can con gure the accrual engine to post in each period the delta amounts compared to the former period or to reverse and post again the full
amount:
If delta posting is con gured, the Accrual Engine calculates the amount for the given period and subtracts the amount that was already posted
before. Only the delta is posted.
If full posting is con gured, the Accrual Engine rst reverses the amount that was already posted. Then the Accrual Engine calculates the amount
for the given period and posts this full amount. Both, reversal and full posting are done in the given period.
Journal Entries: For Accrual Transaction Type PP-Periodic Posting
COMPLETE POSTING
1st Periodic Posting
Dr O setting Account / COST Account
Cr Accrual Account / B&S Account
2nd Periodic Posting
Reverse previous period posting
Dr Accrual Account / B&S Account
Cr O setting Account / COST Account
Post the Accrual amount for current period in the same JV

DELTA POSTING
Review and Approval:
Review means: A reviewer can adjust the periodic accrual amounts that are proposed by the system. If no user performs the review, the system
will post the proposed amounts.
Approval means: An approver can approve or reject the periodic accrual amounts that are proposed by the system. If nobody approves the
amount, the system will post no accruals for this accrual object.
Accrual Transaction Types – Di erent types of Posting:
IP – Opening Posting
When an accrual object is created, the total amount can be posted.
PP – Periodic Posting
The amount that is calculated by the accrual method for the single periods can be posted.
FP – Automatic Release Posting (also called Final Posting)
Reduce the accruals by posting them to some other account, for example a P&L account. This type of posting occurs if the status of the accrual
object is changed to Prematurely Finished.
There are other transaction types as well which can be explored as per customer requirement.
Accrual Methods for Accrual Calculation:
LINEAR – Amount equally distributed through all periods automatically

UPLD_AMNT – Use amount that was uploaded into the Accrual Engine manually
There are other methods as well.
Con guration Steps:
Basic Settings:
Step 1: Set Application Component to be Customized
Step 2: Assign Company codes
Step 3: Close Fiscal year in the Accrual Engine
Step 4: De ne Accrual Line item type
If you want to use excel upload functionality, ‘Upld Allwd’ checkbox must be ticked
Step 5: Assign Currency type to Accrual line item types
Accrual Calculation:
Step 6: De ne Accrual Methods
In our DEMO, we have used LINEAR & UPLD_AMNT Accrual Methods
Review & Approval of Accruals:
Step 7: De ne Reasons why adjusting periodic amounts
Step 8: De ne threshold variant for Review and Approval
If Accrual amount is less than Lower Threshold, then the accrual object will not be processed by Accrual Engine.
If Accrual amount is BT Lower Threshold & Upper threshold, Accrual object is auto approved.
If Accrual Amount is GT Upper threshold, Review and Approval is required
Step 9: De ne Time intervals variant for Review/Approval
Accrual Posting:
Step 10: De ne Posting Schema
Symbolic Accounts:
These are di erent type of G/L accounts that can be used for Accrual Postings.
Step 11: Assignment of Accrual Item types to Posting Schemas
‘Post Deltas’ checkbox unchecked here. That means full posting will take place in each period. Refer to the full posting logic mentioned above.
‘Post Deltas’ checkbox is checked here. That means delta posting will take place in each period. Refer to the delta posting logic mentioned above.
Step 12: De ne Accrual object categories
Step 13: De ne number ranges for Accrual Object Categories
Step 14: Assign number ranges to Object Categories
Step 15: Account Determination for Manual Accruals
This ends Part 1 of this series. We will discuss on the following in Part 2:
DEMO in S4
Batch jobs for Periodic Posting
Available Fiori Apps
https://blogs.sap.com/2020/12/23/accrual-engine-in-s4-hana-1909-manual-accrual-how-it-is-processed-periodically-part-2/
I hope you enjoyed this article. Please feel free to share your inputs/suggestion/corrections in the comments sections.
Let’s keep learning together.
Cheers
Ratul
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Assigned tags
SAP S/4HANA | FIN (Finance) | FIN General Ledger | Accounting and Financial Closing | Accrual Engine |
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8 Comments
Muhammad Hasan Mu d
November 28, 2020 at 2:20 am
Thanks Mr. Ratul
Your articles gave me better insight about Accrual Engine in S4HANA

Regards,
Muhammad Hasan Mu d
Like (1) | Reply | Alert Moderator
Ratul Chakraborty2 | Post author
November 28, 2020 at 6:40 pm
Im glad that you found my blog useful ?
Cheers
Ratul
Abubakar Javed
Is there any second part of accrual Engine
For this blog series, yes. I'm yet to nish writing Part 2.
Nilesh Sahita
December 20, 2020 at 3:08 am
Well written blog, Rahul!
December 22, 2020 at 2:36 pm
Thank you Nilesh. Btw I'm Ratul
Tushar None
February 22, 2021 at 8:05 am
Hi, Thanks for the useful blog.
Can you please explain the business scenarios which can be managed by the new functionalities.
e.g. is this just for the Prepaid accounting or the cost accruals (e.g. Services received but not accounted due to late invoice).
And how each scenario gets managed (with examples of entries)
This would really help to create value in business process discussions
Regards
Tushar
Edalada Sai Teja
February 22, 2021 at 8:49 am
Thank you for very useful blog
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2/25/2021 Accrual Engine in S4 HANA 1909: Manual Accrual & how it is processed periodically – Part 1 | SAP Blogs

Ask a Question Write a Blog Post

14 Likes 3,155 Views 8 Comments

Part 1 – that describes the theoretical part of Accrual Engine

Part 2 – We will see a DEMO in the system

What is Accrual Engine:

Accruals supported by Accrual Engine:

Purchase Order Accruals

In this blog series we will discuss on Manual Accrual.

Business needs & Motivation: Advantages of S4 HANA Accrual Engine

The S/4HANA Accrual Engine

1. Is optimized for S/4HANA

It is fully integrated into the General Ledger:

2. There are no summary records in the Accrual Engine:

No limitation of the number of elds in reporting.

3. Mass Upload of Accrual Objects is possible:

Delta Logic for Accrual Postings:

Journal Entries: For Accrual Transaction Type PP-Periodic Posting

1st Periodic Posting

Dr O setting Account / COST Account

Cr Accrual Account / B&S Account

2nd Periodic Posting

Reverse previous period posting

Dr Accrual Account / B&S Account

Cr O setting Account / COST Account

Post the Accrual amount for current period in the same JV

Dr O setting Account / COST Account

Cr Accrual Account / B&S Account

Dr O setting Account / COST Account

Cr Accrual Account / B&S Account

Review and Approval:

Accrual Transaction Types – Di erent types of Posting:

Accrual Methods for Accrual Calculation:

LINEAR – Amount equally distributed through all periods automatically

There are other methods as well.

Con guration Steps:

Step 1: Set Application Component to be Customized

Step 2: Assign Company codes

Step 3: Close Fiscal year in the Accrual Engine

Step 4: De ne Accrual Line item type

Step 5: Assign Currency type to Accrual line item types

Step 6: De ne Accrual Methods

In our DEMO, we have used LINEAR & UPLD_AMNT Accrual Methods

Review & Approval of Accruals:

Step 7: De ne Reasons why adjusting periodic amounts

Step 8: De ne threshold variant for Review and Approval

Step 9: De ne Time intervals variant for Review/Approval

Step 10: De ne Posting Schema

Step 11: Assignment of Accrual Item types to Posting Schemas

Step 12: De ne Accrual object categories

Step 13: De ne number ranges for Accrual Object Categories

Step 14: Assign number ranges to Object Categories

Step 15: Account Determination for Manual Accruals

Let’s keep learning together.

Related Blog Posts

November 28, 2020 at 2:20 am

Thanks Mr. Ratul

Your articles gave me better insight about Accrual Engine in S4HANA

Like (1) | Reply | Alert Moderator