Lesson 1 of 6
What must reconcile
11 min
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Financial data acceptance is the point where finance says: the numbers in the new system are the numbers we had in the old one, and we can close the books on them. It is one of the most consequential signatures in an SAP S/4HANA program. Get it wrong and the opening balance sheet is wrong, every report built on it is wrong, and the external auditor will find out at year end.
This course follows Contoso Motor Co. through two financial migrations. The first is the system conversion of SAP ECC 6.0 EHP 8 to SAP S/4HANA Private Edition, where company codes 1710 (Contoso Motor Co.) and 1810 (Contoso Parts Distribution LLC) are converted in place over a 60-hour cutover weekend. The second is Wave 2, the load of Alternadores del Norte S.A. de C.V. from a non-SAP legacy ERP into the converted system as company code 1910 (MXN). Dan, the finance process owner, will sign both acceptances.
The reconciliation scope
| Area | What must agree | Typical evidence |
|---|---|---|
| General ledger | Balance per G/L account, per company code, per ledger (0L US GAAP, 2L IFRS), in local and transaction currency | Trial balance before and after, by account |
| Accounts receivable | Open items per customer: count, amount, currency, due date, and total equal to the AR reconciliation accounts | Customer open item lists and balances; AR control account balance |
| Accounts payable | Open items per supplier, with the same attributes, and total equal to the AP reconciliation accounts | Supplier open item lists and balances; AP control account balance |
| Fixed assets | Per asset and depreciation area: acquisition cost, accumulated depreciation, net book value; totals equal to asset G/L accounts | Asset history sheet before and after; asset-to-G/L reconciliation |
| Inventory | Quantity and value per material and plant; total value equal to inventory G/L accounts | Stock value lists; stock-to-G/L comparison |
| Controlling and open documents | Balances that carry forward, such as open orders with costs, and open purchasing and sales documents needed to run the business | Order balances; open PO and sales order lists |
What finance must reconcile. The exact list depends on scope; agree it in writing before the first mock.
Two properties matter for every area. Completeness: every item that should have moved did move, and nothing extra arrived. Accuracy: every item that moved has the right values, including the attributes that drive later processing, such as due dates for payment runs and depreciation keys for assets. Totals prove a lot about completeness and accuracy in aggregate; they prove nothing about an attribute such as a due date. That is why the methods lesson combines totals with samples.
Conversion versus new load
The two migrations need different reconciliations, and confusing them is a classic planning mistake.
| Question | System conversion (1710, 1810) | New load (Wave 2, 1910) |
|---|---|---|
| What moves? | Everything: full history, converted in place to the new data model | Only what is needed to run: balances, open items, assets with values, stock |
| What do you compare? | The same system before and after the conversion | The legacy system (via extracts) and the loaded SAP S/4HANA data |
| Main risk | Inconsistencies in ECC data surface when finance data is merged into the universal journal | Wrong mapping, missing records, wrong cut-off or currency |
| Typical tools | Pre-conversion consistency checks, finance migration steps and their logs, before/after reports | Migration Cockpit logs, legacy control totals, reports in the new company code |
| Offset accounts | Not needed for converted data | Migration offset accounts must net to zero after all loads |
In a conversion, SAP S/4HANA merges G/L, controlling, asset accounting and material ledger data into the universal journal (table ACDOCA). SAP Learning describes it as the single source of truth for financial data, which removes the need to reconcile FI and CO with each other afterwards. It does not remove the need to prove that the merged result equals what ECC showed before. Inconsistencies that ECC tolerated, for example between asset subledger and G/L, must be cleaned up before or during the conversion, and the finance migration steps report them.
In a new load such as Wave 2, the SAP S/4HANA Migration Cockpit creates balances and open items through migration objects. Each load posts against a migration offset account: an AR open item load debits the customer reconciliation account and credits the offset. Once G/L balances are loaded, every offset account must net to zero. A non-zero offset is a reconciliation finding in itself.
- Freeze legacy at cut-offLegacy period closed; balances and open items frozen at the cut-off date
- Extract with control totalsCounts and amounts captured per object at extract time
- Load open items and assetsCustomer, supplier and asset values post against migration offset accounts
- Load G/L balancesRemaining balances post; offsets clear
- ReconcileLegacy totals = extract totals = SAP S/4HANA totals; offsets = 0
| Order | Migration object (typical name) | Posts against | Reconcile to |
|---|---|---|---|
| 1 | FI - Accounts receivable open item | Customer reconciliation account vs migration offset | Legacy aging: MXN 48,615,320.40, 1,946 customers |
| 2 | FI - Accounts payable open item | Supplier reconciliation account vs migration offset | Legacy AP aging per supplier and currency |
| 3 | Fixed asset (incl. balances and transactions) | Asset accounts per depreciation area vs offset | Legacy asset register per area |
| 4 | Material inventory balance | Inventory accounts vs offset | 2,300 pc ADN-200 = MXN 6,210,000.00 in plant 1910 |
| 5 | FI - G/L account balance (and G/L open items) | Remaining G/L accounts; offsets clear | Legacy trial balance; every offset account = 0 |
Typical SAP S/4HANA Migration Cockpit objects for the Wave 2 financial load into company code 1910, in load order (object names vary slightly by release; check the object list in the Migrate Your Data app). The classic LTMC transaction is replaced by the Fiori app in current releases.
What would you do?
Grace, the PMO lead, proposes that for the conversion, finance only checks that the trial balance totals match before and after, to save cutover time. What should Dan answer?
- Reconcile G/L by ledger, AR and AP open items, fixed assets by depreciation area, inventory and carried-forward controlling balances.
- Prove completeness and accuracy; totals cover aggregates, samples cover attributes.
- A conversion compares the same system before and after; a new load compares legacy, extract and target.
- In a new load, migration offset accounts must net to zero once all objects are loaded.
Check your understanding · not graded
Lesson check
1. In Wave 2, what must be true of the migration offset accounts after all financial loads?
2. Why does a matching AR total not prove that the open items are accurate?
3. What do you compare in a system conversion reconciliation?
4. Which tool loads Wave 2 open items and balances into company code 1910 in SAP S/4HANA 2025?