SAP S4 HANA Finance Interview Questions 2023

SAP S4 HANA Finance Interview Questions for Beginners

This comprehensive list of SAP S4 HANA Finance interview questions is specifically for beginners in SAP. This will give you a guiding path on how to begin your SAP career journey in SAP S/4HANA Finance. Majorly the topics covered Organizational structure, policies, SAP Finance, Controlling and its sub-components.

It also covers the basic configuration steps of SAP FI that the SAP FI consultant has to follow. Likewise, it also explains the most important journal entries that we enter into the SAP systems such as for GR/IR accounts or FI-SD and FI-MM integration.

Thus, read all these and much more SAP S4 HANA Finance Interview Questions.

1. What are the components of enterprise structure?

A. Organisation structure is one of the first steps in setting up the business function in SAP. The organizational structure is created by defining the organizational units consisting of the following:-

Client
Company
Company Code
Business Areas

2. What are the disadvantages of Business areas?

While doing Automatic posting for example Input or Output Tax it will not update in the business area. Not only tax whatever automatic posting will not update in the business area
In Assets- Depreciation also difficult to update in the Business area
Equity capital & share capital – are difficult to update in the business area

3. What is US GAAP?

Generally accepted accounting principles (GAAP) are the accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. Generally accepted accounting principles for local and state governments operate under a different set of assumptions, principles and constraints as determined by the Governmental Accounting standard Board.

4. What is meant by the Cost Object and what is all the use?

The Cost Object is what we use to control the cost elements. Any real cost carrier that can be used to settle the cost is a cost object.

5. In App—> Bank Determination—> Ranking : 1st Rank= HDFC , 2nd Rank= ICICI. For 15 days I have to pick up money from ICICI. Tell me How to do it?

A. Generally checks will be issued from house banks ( from 1st rank onwards ), if you select no optimisation radio button in the “setup payment methods per company code for payment transaction” configuration step. As you are saying that money is picked from ICICI, the reason is bank selection in the above step (Optimise by bank group or optimise by postal code in the above configuration step). Bank selection will give prior to this selection and next to the ranking order.

6. What is the importance of a secondary cost element in controlling, if it is needed give reasons

A. Secondary cost element creates for internal purpose of Controlling area. This is for service provided from one cost centre to another cost center.

An example.

We have Canteen Cost Center. The canteen provides service to Production, Packing, Utility, Admn etc. You allocated the Canteen cost to other cost centres through a secondary cost element.

It is used for Controlling cost allocation purposes.

7. What is the integration between CO-PP?

A. The point of integration between CO-PP is Work Center. The transaction code for the same is CR01. The point of integration is the confirmation of the production Order in the production module. To create a production module – CR01.

8. What did you configure in the accounts receivable module?

A. Accounts Receivable. Generally is a Customer Account. We configure AR in three types:-

i) General Data Segment- Details of Customers

ii) Company Code Segment- Details of customers

iii) Sales Area Segment

9. How dunning procedure will be updated in the Customer Master?

A. After you create the dunning procedure with FBMP, you have to assign it to the customer master record with XD02 before going for the dunning run, go to the correspondence tab in the customer master and can assign the dunning procedure.

10. What is the process of cancellation of an issued check?

A. If we want to void the check only then we use FCH9 or if we want to cancel the entire payment transaction then we use FCH8.

11. How reversal of the document is done?

A. When we post an entry we may post a wrong entry, SAP can’t delete any document or entry which is posted therefore to correct or cancel the entry we reverse the entry which is called a reversal entry.

12. What is a depreciation key?

A. Depreciation keys contain the calculation methods for Depreciation calculation and parameters that control

Ordinary Depreciation
Special depreciation
Scrap Value (Cutoff Value)
Calculation of Interest

We can enter a separate depreciation key for each, Depreciation area in the master record.

13. What is the production support procedure? How does login production support? What is the transaction code?

A. The customer or the end user logs a call through any tool or by mail tools (RADIX), Remedy Service Desk (SD4) Preigreen Lotus Notes etc.

Whenever a customer logs a call he /she has to mention to which workgroup.

Once the calls came to the workgroup the support Consultant or the Team needs to send an IR (Initial Response) to the user depending upon the priority of the calls (Top, High, Med, Low etc).
Then the error is fixed, debugging by the support consultant or the team. Then after testing properly by generating TR (Transport Request through the basis admin).
Then it informed the end user/customer about the changes which have been moved to the production server by the CTS process.

If we will summarise, if any configuration or customisation is required to solve the issue, then the consultant has to work on the DEV client, then the end user will test it in the QA client and after approval, the BASIS consultant has to transport it to the Production client.

14. What is the difference between House Bank and Bank Account?

A. House Bank is a group of banks means the company is maintaining 10 bank accounts these 10 accounts will be maintained by 1 house bank. Each bank GL can be assigned to house bank and the account id is to refer for payment program House Bank Master in SAP is created to capture the Branch details of your bank like branch address, swift code etc

Whereas a Bank Account ID represents the account number in your bank branch. So there can be many account ids under one house bank ( as in one bank you can have a local currency account and a foreign currency account or a savings account and current account.

15. What is the importance of the Baseline Date?

A. The Baseline Date is used to calculate the due date by taking into account the payment terms. The Baseline date helps to pick the relevant invoices for payment. During APP when the invoices are pulled into a run, the system checks the next payment date before picking invoices to be paid.

16. What is the difference between the posting period and the fiscal year variant?

A. Fiscal Year Variant determines the financial year, a company follows for financial reporting whereas the posting period variant is used for which period onwards transactions will be started.

17. Why development client is called the golden client of SAP?

The development client is known as the Golden Client because it has all the correct configuration settings which have been tested and are error-free. The Golden client is taken as a reference while performing some other configuration settings. You should not change any settings in the golden client.

18. What is Asset Accounting?

Asset Accounting is used for the Accounting of Fixed Assets in an organisation. The significance of Asset accounting lies in the following:-

It follows the subsidiary Ledger Concept
It allows the categorisation of Assets as – a) Self Built. b) Purchased. c) Depreciation posting is automated.
Depreciation posting is automated
Has incorporated features that help in better reporting of Fixed Assets

Procedure

The most essential procedure in Asset Accounting is mapping the Subsidiary Asset Account Number to the corresponding General Ledger Account and thereby enabling automatic updating at any point in time

2. Planned Depreciation runs must be run to make Depreciation postings.

19. If you have not solved any ticket in time, what will happen?

A. Service level agreement (SLA) is applicable to tickets. Every ticket will have an SLA attached to it, it could vary from Critical, High, Medium or Low priority. For example, if it is a critical ticket the time to update/solve the ticket is only 2 hrs, if you do not solve it within that time the ticket will cross the SLA and the indicator colour will change from green to red and the issue will be escalated later on you may be asked to raise an incident for same (reason for the delay in processing).

20. What is a Solution Manager?

A. Solution manager is something like share point. It will contain all the project plans and blueprint it is like a guide for the project which says which things are done and which have to be done. You can upload and download functional specifications from it.

21. What is a transport request?

A. Transport request is nothing but to transport the objects from one system to another system by using the transport organizer.

SE09 – is the workbench organiser used to customise the objects for the development class.

In SAP there are three servers:-

i). Development server

ii) Quality/testing server

iii) Production server

Transport is the vehicle by which your configuration settings are moved from one client to another client or environment to environment. In the development server, we configure the settings these settings are transferred to the quality/testing server through transport request.

22. How to upload opening balances for implementing a new company. The opening balances of Assets, Loans and Cash Balances and how create these possible in SAP?

A. First we have to create clearing accounts like GL clearing accounts, vendors clearing accounts, customer clearing accounts and asset clearing accounts. These accounts are only for data uploading. Post GL balances in F-02, the customer in F-22 and F-43 for the vendor, we have debit balances of customer and credit customer clearing account, for the vendor we have debit vendor clearing account and credit balance for the vendor. For Asset balances first, we have to remove the reconciliation in FS00 for the asset account and accumulated depreciation account, and we have to post in F-02.

23. What is the derivation rule in PCA how do we define it and where do we define it?

A. Derivation rule used for updating profit centres because of derivation rule profit centre will be updated. We define derivation rules like-

For the GL expense account, we will assign the profit centre to the cost center.
For the revenue account, it will update through account assignment.
For balance sheet items it will update by posting through the business area.

24. Tell me the Basic Steps for FI configuration.

Define Company (OX15)
Define Company Code (OX02)
Define Business Area. (OX03)
Assign company code to the company (OX16)
Define fiscal year variant (OB29)
Assign fiscal year variant to company code (OB37)
Define posting period variant (OBBO)
Define opening & closing posting period variant ( OB52)
Assign company code to post-period variant (OBBP)
Define chart of account (OB13)
Assign company code to chart of account (OB62)
Define account group. (OBD4)
Define retained earnings (OB53)
Define document type (OBA7)
Create no range for customer group (XDN1)
Define posting keys (OB41)
Define Field status variant (OBC4)
Assign field status variant to company code (OBC5)
Define Tax procedure (OBQ3)
Assign tax procedure to company code (OBBG)
Define tolerance group for G/L accounts (OBA0)
Define tolerance group for employees (OBA4)
Define global parameters (OBY6)

25. What is the Activity Type?

A. Activity Type is internal activity allocation from one cost centre to another cost center. For example, the Telephone is part of the administration cost centre but the phone use all cost center, so we make the activity type “PHONE”. So we allocated cost centre amounts thru activity. Activity types are nothing but services provided by cost centres through work centers. It is one of the tracing factors for the cost center’s efficiency. Those are created & planning in cost centres and assigned in the work centre in PP.

26. What is a GR/IR account? What is the use of it?

GR/IR account is offsetting entry.

Example- Concerning Goods Rec Note

Material a/c Dr
- GR/IR clearing account

After verifying, once the vendor invoice will be posted in logistics the accounting entry in FI

GR/IR clearing account Dr
- Vendor account Cr

So it is offsetting the entry

It always cleared no balance at last. The offsetting entry for clearing the GR/IR clearing account is posted to the stock account (provided that there is sufficient stock coverage for the quantity difference).If there is a delivery surplus on the GR/IR clearing account the material was debited with too high value when the receipt of the goods was posted. When the GR/IR clearing account is cleared the material is credited accordingly.If there is an invoice surplus on the GR/IR clearing account, the material was debited with too low a value when the receipt of the goods was posted. When the GR/IR clearing account is cleared the material is debited accordingly. If there is insufficient stock coverage for this quantity only the portion corresponding to the available stock is posted to the stock account. The rest is assigned to a price difference account. For a material subject to standard price control, the offsetting entry to clear the GR/IR clearing account is made to a price difference account. There are no value changes in the material master record. Normally there will be a time lag between the recording of goods received and the Invoice received. To track the differences at any point in time, GR/IR Account will be helpful.

27. What is Baseline Date? Why is that used?

Ans. The baseline date is the date from which terms of payment apply. By default, the baseline date will display in invoice posting. We can control the base configuration steps ( T Code- OBB8)

The baseline date may be:-

Document date
Posting Date
No default ( for this option, the user should explicitly define the baseline date in invoicing)
Entry date

28. How do you reverse cleared document?

A. We need to reverse the cleared Document No in FBRA, Then we can reverse the main doc no in fb08

29. What is reversal posting?

A. Reversal posting means we try to rectify the entry we passed earlier. The error may be because of

i) Wrongly Debiting/ Crediting a Party

ii) Excess Payment to a party, so we do a reversal to rectify the entry

ii) Wrong Assignments 2 wrong party

30. What is open line item management? What do you mean by clearing open line items?

A. Open Line item: That means BT is pending for clearing AP/AR etc.

Example

You enter the Invoice in Vendor A/C
The vendor payment due date is Next month
The invoice shows it is an open line item
It is still an open line item until you not clear the amount against the vendor invoice it shows the open line item. Because you have to clear the invoice

31. Entries for FI-MM and FI-SD integration in different scenarios.

PO Creation

No accounting entry.

GR Creation

Inventory Account Dr (Transaction Key BSX in OBYC)
- To GR/IR account ( Transaction Key. WRX in OBYC)

When GR is posted

GR/IR Account Dr
- Vendor Account Cr

Payment Made to Vendor

Vendor A/c Dr
- To Bank Clearing

The Pre-Requisite

There is a close integration between FI & MM, document flows from MM to FI in the following areas

Movement Types – Used to enable the system to find the predefined posting rules determining how the accounts of the financial accounting system are to be posted & to update the stock fields in the material master data ( Goods Receipt, Goods Issue etc )
Valuation Class – Assignment of material to a group of GL accounts used to determine the GL accounts that are updated as a result of goods movement
Transaction Key – Used to control the storage or filing of documents & assignment of documents. It was used to differentiate between various transactions such as goods movement in inventory.
Material Type– Each material should assign material type in the material master record used to update whether changes made in quantity are updated in the material master record and changes in value are also updated in the stock account.

FI-SD Integration – The integration is done T Code- VKOA

Sales Order Created

No accounting entry

PGI did Goods Issue)

Cost of Goods Sold Dr ( Configured in OBYC GBB Transaction Key )
To Inventory Account

Billing document released to Accounting

Customer Account Dr
- To Sales Revenue Account (ERL- T key Pricing procedure)

Note– The GL account is assigned to this ERL in VKOA

To whom do these SAP S4 HANA Finance Interview Questions important?

Those who are working towards making a career in SAP S/4HANA Finance or SAP FICO, desire to become an SAP Consultant and are looking for the best Interview guide on SAP FICO and S/4HANA Finance. Importantly, reading these questions would help you best, when you practice the concepts with practicals. Which consequently, helps you have system knowledge and the required confidence to perform well in your interviews.