1. What is the R2R process in SAP FICO?
Answer:
R2R (Record to Report) is the financial process of collecting, processing, and delivering accurate financial data for reporting. In SAP FICO, R2R includes:
- Data recording (GL, AP, AR, Asset Accounting, Bank Accounting)
- Period-end closing (Accruals, Provisions, FX Revaluations)
- Consolidation (Group reporting, Intercompany reconciliations)
- Reporting (Balance Sheet, P&L, Cash Flow, Management Reports).
2. How does R2R differ in SAP S/4HANA compared to ECC?
Answer:
- Universal Journal (ACDOCA): Combines FI, CO, AA, ML, COPA tables → one single line item table.
- Real-time integration: No need for reconciliation between FI & CO.
- Faster closing: Accelerated processes with SAP Fiori apps and automation.
- Embedded analytics: Real-time reporting with CDS views.
- Elimination of redundant tables: BSEG, COEP, MLIT, etc. partially replaced by ACDOCA.
3. What are the key R2R sub-processes in SAP FICO?Answer:
- Journal Entry processing (manual & automated)
- Intercompany Accounting
- Accruals & Provisions
- Fixed Asset Accounting & Depreciation Run
- Foreign Currency Valuation & Translation
- Period-End Closing & Financial Statements
- Consolidation & Reporting
4. Explain Universal Journal and its role in R2R.
Answer:
The Universal Journal (table ACDOCA) stores all financial and controlling data in a single line item table.
- Eliminates reconciliation between FI & CO.
- Allows multi-dimensional reporting (profit center, segment, customer, product, etc.).
- Simplifies R2R cycle with real-time postings and analytics.
5. What is the importance of period-end closing in R2R?
Answer:
- Ensures all revenues & expenses are recognized in the correct accounting period.
- Activities include: Accruals, Provisions, Depreciation, Asset Closing, GR/IR Clearing, FX Valuation.
- In S/4HANA, Closing Cockpit (Fiori apps) streamlines and automates period-end tasks.
6. How are Accruals handled in SAP FICO?
Answer:
- Manual accruals (FB50, FBS1).
- Automatic accruals using Accrual Engine or Recurring Entries (FBD1).
- In S/4HANA, Accrual Engine is integrated with Universal Journal → better transparency and audit trail.
7. What is GR/IR clearing in R2R?
Answer:
- Temporary account for goods receipt vs invoice receipt mismatch.
- Ensures expenses/liabilities are booked correctly before invoice arrives.
- At period-end, run GR/IR clearing program (F.19) to adjust open items.
8. How is Foreign Currency Valuation done in R2R?
Answer:
- At period-end, foreign currency balances must be revalued.
- Transaction: FAGL_FCV (New) in S/4HANA.
- Adjustments posted to Unrealized Gain/Loss accounts.
- Runs based on valuation area, currency type, valuation methods.
9. What are key reporting tools in R2R under SAP HANA?
Answer:
- SAP Fiori apps (Trial Balance, P&L, Balance Sheet).
- Embedded Analytics (CDS views + KPIs).
- SAP Analytics Cloud (SAC) integration for visualization.
- Group Reporting (S/4HANA Finance) for consolidation.
10. What is Intercompany Reconciliation in R2R?
Answer:
- Ensures balances between group entities match before consolidation.
- Tools: Intercompany Reconciliation (ICR) process in SAP →
- Process 001: Document-to-Document Reconciliation
- Process 002: Account Reconciliation
- Process 003: Transaction Matching
11. What are Closing Cockpit & Financial Closing Cockpit?
Answer:
- Closing Cockpit (transaction CLOCO): Automates closing activities (schedules, dependencies, status tracking).
- Financial Closing Cockpit (FCC): Advanced tool in SAP S/4HANA with Fiori integration for multi-entity closings.
12. How is Asset Accounting integrated in R2R?
Answer:
- Depreciation Run (AFAB / FAA_DEPRECIATION_POST).
- Asset acquisition, retirement, transfer directly update GL in Universal Journal.
- No separate reconciliation needed.
13. What challenges in R2R does SAP S/4HANA solve?
Answer:
- Manual reconciliations → eliminated via Universal Journal.
- Delayed reporting → replaced by real-time analytics.
- Multiple ledgers & currencies → supported natively in ACDOCA.
- Complex closings → streamlined with Closing Cockpit & Fiori apps.
14. Difference between Leading Ledger and Non-Leading Ledger in R2R?
Answer:
- Leading Ledger (0L): Used for Group/Corporate reporting under IFRS/GAAP.
- Non-Leading Ledger: Used for local statutory reporting (e.g., India Accounting Standards).
- Both updated in Universal Journal in parallel accounting.
15. Can you explain R2R KPIs tracked in SAP?
Answer:
- Days to close books
- Accuracy of financial reporting
- % of automated journal entries
- Intercompany reconciliation time
- On-time statutory compliance