Business partner, credit and material ledger

Three more simplification items reach finance during a conversion: customers and suppliers become business partners, credit management moves to SAP Credit Management, and the material ledger becomes mandatory for inventory valuation. None of them is optional, and each changes something that AP, AR or cost accounting staff use daily.

Customers and suppliers become business partners

In ECC, Contoso maintained customers with XD01 and suppliers with XK01, each with its own number. In SAP S/4HANA, the business partner is the single entry point. A business partner holds the general data once (name, address, tax numbers, bank details) and gets roles for each purpose: an FI customer role for company code data, a customer role for sales data, an FI supplier role and a supplier role for purchasing data. Behind the scenes, customer vendor integration (CVI) keeps the customer and supplier records synchronized with the business partner. The old transactions redirect to business partner maintenance.

The CVI synchronization happens in ECC, before conversion. It is a pre-conversion project in its own right, and the most common reason it runs late is data quality: every customer and supplier must pass the business partner's checks. Great Lakes Fleet Services and Lakeside Components are easy; the 4,000 one-off customers from a decade of aftermarket sales are not. Related courses cover business partner maintenance and sales master data in detail.

Credit management moves to SAP Credit Management

ECC's credit management in accounts receivable (credit control areas, FD32 credit limits, SD credit checks of types A, B and C) is not available in SAP S/4HANA. Its successor is SAP Credit Management, part of SAP's financial supply chain management components. Credit limits are maintained on the business partner in a credit segment, using UKM_BP or the corresponding app. Sales document types use credit check type D (SAP Credit Management) or no check. The migration moves configuration, credit limits, credit exposure and credit decision data, using SAP-provided migration activities.

One more mandatory change: the material ledger

In SAP S/4HANA the material ledger is active for inventory valuation in every plant. Contoso's ECC system did not use it, so the conversion activates it and builds material ledger data for plants 1710 and 1720. Actual costing, which revalues inventory at actual cost at period end, remains optional; Contoso keeps standard costing ($150 for CMC-ALT-100 in Detroit, $156 in Chicago) without actual costing. The visible changes are that inventory values can be held in more than one currency and that stock value reports read from the material ledger. The test is simple and essential: stock value per plant and material after conversion equals the ECC snapshot.