SAP S/4HANA is continuously innovating the way business transactions can be performed and integrated in a digital world. In today’s global environment, each country has its own local reporting requirements, such as 1099 MISC (miscellaneous income) reporting in the US, GST (goods and services tax) reporting in Malaysia, withholding tax reporting in Japan, and so on. Therefore, for multinational organizations it is risky and time-consuming to keep track of all such reporting requirements without adding more operational costs. SAP S/4HANA for advanced compliance reporting can help you reduce manual intervention and monitoring of various reporting needs in a unified manner.

SAP S/4HANA for advanced compliance reporting and the corresponding country-specific reports are available from the on-premise version of SAP S/4HANA 1610 Feature Pack Stack (FPS) 01 onward via SAP Note 2435114. The model contents are not available for the SAP-delivered reports if you have not opted for the content delivered through Scale, Enablement and Transformation (SET). You need to implement SAP Note 2460073 to get the required model content for SAP S/4HANA for advanced compliance reporting. From the on-premise version of SAP S/4HANA 1709, these SAP Notes are pre-installed. SAP S/4HANA for advanced compliance reporting offers the following features to help you meet business needs for statutory reporting:

• A unified user experience and single point of entry for data for various supported countries
• Automated notifications for reports due for submission
• Complete audit trail for reporting compliance
• Easy handling of multiple varied legal reporting formats
• Framework extensibility by defining compliance reports
• Electronic verification and submission to government authorities
• Embedded analytics and a compliance monitor

Table 1 summarizes the various statutory reports in SAP S/4HANA for advanced compliance reporting.

Table 1

Various statutory reports under SAP S/4HANA for advanced compliance reporting

Table 2 shows SAP Fiori applications for SAP S/4HANA for advanced compliance reporting and the needed Open Data Protocol (OData) and services that need to be activated. The roles authorization depends on the country for which you want to generate reports.

To make SAP S/4HANA for advanced compliance reporting apps work, you can apply the model content to your company codes or you can define the setup for your company code from scratch. To apply the model content, you need to activate the following Business Configuration Sets (BC Sets) in the system:

• BCS_FIN_LOC_SRF_FISCAL_YEAR (For Fiscal Year Variant)
• BCS_FIN_LOC_SRF            (For Advanced Compliance Reporting)
• BCS_FIN_LOC_SRF_PR (For Advanced Compliance Reporting: Premium Version)

To activate the BC Set BCS_FIN_LOC_SRF_FISCAL_YEAR, execute transaction code SCPR20. This action opens the screen in Figure 1.

Figure 1

Enter the BC Set name to activate

In the BC Set field, enter BCS_FIN_LOC_SRF_FISCAL_YEAR (the short text is filled automatically) and click the activate icon to view the activate options for this BC Set in Figure 2.

Figure 2

Activate the BC Set for fiscal year configuration

In Figure 2, you can keep the default options for the first-time setup for this BC Set and click the enter icon (the green check mark) to activate it.

Now activate the BC Set BCS_FIN_LOC_SRF. Execute transaction code SCPR20. This action opens the screen in Figure 3.

Figure 3

Enter the BC Set name to activate

In the BC Set field enter BCS_FIN_LOC_SRF (the short text is filled automatically) and then click the activate icon to display the company code mapping options for this BC Set in the screen in Figure 4.

Figure 4

Map the company code for the model BC Set content

In Figure 4, map your legal entities to the model company code for the country and click the Copy Values button to view the activate options for this BC Set in Figure 5.

Figure 5

Activate the BC Set for SAP S/4HANA for advanced compliance reporting countries’ model content

In Figure 5, you can keep the default options for the first-time setup for this BC Set and click the enter icon to activate it.

As you did in the steps described above in the instructions before Figures 3 through 5, you can activate BC Set BCS_FIN_LOC_SRF_PR if you have a licensed version of SAP S/4HANA for advanced compliance reporting for additional functionalities that cover more countries. During the activation of BC Set BCS_FIN_LOC_SRF_PR, you can map your legal entities to model company codes for additional countries as Egypt and Australia as shown in Figure 6.

Figure 6

Activate the BC Set for SAP S/4HANA for the advanced compliance reporting premium version for additional countries

The above BC Set (BCS_FIN_LOC_SRF and BCS_FIN_LOC_SRF_PR) activation should bring the default model setting to your company code for that country. Consider an example of 1099 MISC reporting for the US activated by this BC Set and review the configurations that are activated. You can access these settings in customization transaction code S_ER9_52000057 or follow customization path SPRO > Financial Accounting (New) > SAP S/4HANA for Advanced Compliance Reporting > Setting Up Your Compliance Reporting) to reach the screen shown in Figure 7. Here, you see the various reporting entities set up, such as US_RPG_ENT for US reportings. Select that reporting entity and click the Assign Report Categories to a Reporting Entity folder on left side of the screen. This action opens the screen in Figure 8.

Figure 7

Check reporting entities for SAP S/4HANA for advanced compliance reporting

Figure 8

Check reporting category IDs for SAP S/4HANA for advanced compliance reporting

In Figure 8, you can see the various reporting category IDs created for different reporting needs. Select a reporting category ID and click the Set Periodicity of Report Category folder in the left side of the screen. This action opens the screen in Figure 9.

Figure 9

Periodicity of report generation and notification

In Figure 9, you can see and define the following settings applicable for a date range:

• Offset — Indicates the number of days after the period end that the system uses to calculate the due date for submitting the report to the government.
• Time Unit — Days/ Weeks/ Months/ Years
• FY Variant — Fiscal year variant used to calculate the deadline
• Notify — Number of days before the report due date, when the system will send the notification to defined business users.

In Figure 9 you can see that 1099 MISC report is due on 31 January of the year next to the year for which you want to generate 1099 MISC report. For reporting year 2015, the user was scheduled to get a reminder 61 days before, and from reporting year 2016, that user will get a reminder 31 days before.

If you click the Change Use of Report Definition folder on the left side of Figure 9, you can see the submission mode for various reports as shown in Figure 10.

Figure 10

Submission mode for the reports in SAP S/4HANA for advanced compliance reporting

If you click the Enter Parameters Specific to a Report Category folder on the left side of Figure 10, you can see the various parameters’ values based on the report category (Figure 11).

Figure 11

Parameters’ values based on the report category

For example, in Figure 11, the parameters relevant for 1099 MISC reporting for the US are shown, where you must send 1099 MISC forms if you have paid:

At least the amount configured against parameter US_MIN_AMT_CHECK_01 for any or all the following parameters combined:

• Code 01 - Rents
• Code 03 - Other Income
• Code 05 - Fishing boat proceeds
• Code 06 - Medical and health care payments
• Code 07 - Nonemployee compensation
• Code 10 - Crop insurance proceeds
• Code 14 - Gross proceeds to an attorney

At least the amount configured against parameter US_MIN_AMT_CHECK_02 for any or all of the following parameters combined:

• Code 02 - Royalties
• Code 08 - Substitute payment in lieu of dividends

At least the amount configured against parameter US_MIN_AMT_CHECK_03 for Code 09 - Direct Sales to a buyer for resale

If you click the Set Validity of Organizational Unit folder in the left side of Figure 11, you can see the validity of the reporting entity as shown in Figure 12.

Figure 12

Check the validity of the reporting entity

Select the validity date in Figure 12 and click the Assign Organizational Unit to a Reporting Entity folder on the left side of the screen. In the next screen (Figure 13) you can see the company codes assigned to the reporting entity, out of which one has to be marked as a leading company code.

Figure 13

Check company codes assigned to the reporting entity

If you click the Enter Parameters Specific to Reporting Entities folder on the left side of Figure 13, you can see the various parameters’ values based on the report category (Figure 14). For example, in Figure 14, the parameters relevant for US_RPG_ENT are shown.

Figure 14

Parameters value based on the reporting entity

Execute the Advanced Compliance Reporting App

After you activate the apps mentioned in Table 2 and assign the relevant country role to the user, also mentioned in Table 2, you can see these apps in the SAP Fiori launchpad of your SAP S/4HANA system as shown in Figure 15. To reach Figure 15, you need to open the SAP Fiori portal link of your SAP system provided by your SAP technical (Basis) team. The SAP technical team can also manage the apps activation and assignment of roles to the user master.

Figure 15

SAP Fiori launchpad with SAP S/4HANA for advanced compliance reporting applications

After you click the Run Compliance Reports app, you can see the list of reports pending for the reporting entities (for which roles have been assigned to the user ID) as shown in Figure 16.

Figure 16

Application showing the various reports with due dates

For my example, select the Reporting Entity of the US and the Report of 1099 MISC reporting to see what is due as shown in Figure 17.

Figure 17

Reports due for 1099 MISC reporting of US reporting entity

Click the line that is due (in my example the item overdue by 293 days) to reach Figure 18. Click the New Run button to generate the report.

Figure 18

Trigger the run for report generation in SAP S/4HANA for advanced compliance reporting

After you click the New Run button the system opens the screen in Figure 19 in which you define the parameters for the report selection screen or use a predefined variant. Click the Execute button to run this report.

Figure 19

Enter details for triggering a new run for report generation in SAP S/4HANA for advanced compliance reporting

In the next screen (Figure 20), select the reporting year and other options as needed on the selection screen and click the Continue button to proceed with report generation.

Figure 20

Enter further details for report generation

In the next screen, you can see the report output (Figure 21).

Figure 21

The report output

If you go back to the report in SAP S/4HANA for advanced compliance reporting and click the refresh icon (not shown), you can see the generation status updated as shown in Figure 22.

Figure 22

Report generation status

You can click the line also to see the output generated as shown in Figure 23. You can further drill down from Figure 23 to get detailed information as shown in Figure 21 earlier. Drilling down for these details ensures the report has auto-saving functionality and is traceable in the future for any audit purpose. You can also attach more supporting documents if needed in the report.

Figure 23

Drill down in the generated report

After you file the report to the government manually or electronically to the government website, you can click the Update Submission Status link in Figure 22 or 23. The system then sends a warning as shown in Figure 24.

Figure 24

Update submission status for the report

If you go back to the report in SAP S/4HANA for advanced compliance reporting, you can see the submission status updated as shown in Figure 25. You can also click the line to see the output generated in the same manner as explained above in Figures 23 and 24.

Figure 25

Report submission status

On the main dashboard of SAP S/4HANA for advanced compliance reporting, you can see the status of this report line task updated as shown in Figure 26.

Figure 26

Reports submission status for US reporting entity

More Functionalities of SAP S/4HANA for Advanced Compliance Reporting

The above setting enables you to onboard your various statutory reporting requirements into a single cockpit with a unified user experience. There are a lot of other features available in SAP S/4HANA for advanced compliance reporting that I now briefly describe.

Data Preview

You can preview the data before filing. The data can be seen in a classical list output format, SAP List View (ALV) format, or another intuitive format by designing the schema in the Define Compliance Reporting application. This step helps in understanding and consuming the report effectively before submission to the government.

Multiple Legal Formats

You can generate the legal reports in various output formats, such as XML, TXT, or PDF, as per specified government regulations. Adobe Document Services (ADS) should be active for PDF generation. For defining various output types (such as withholding tax certificate), you also perform the output configurations mentioned in SAP Note 2374069.

Various Submission Modes

The reports can be submitted manually, and the status can be updated in the cockpit as demonstrated in this article. You can also set up the SAP HANA Cloud Integration (HCI) for electronic submission to the government portal and receive back the acceptance status in the cockpit. For more information, refer to the document for HCI Integration attached to the SAP Note 2465179.

Complete Audit Trail

The reports that are generated are stored and linked in the SAP S/4HANA for advanced compliance reporting tool cockpit itself and can be easily referred to in any audit. Data about who generated or submitted a report and at what time the report was generated or submitted is recorded with full logs.

Manual Adjustments

You can make manual changes in the document data after the document has been generated for correct submission to the authorities.

Correction Run

You can define whether correction is allowed for a report or not. You can then generate and submit the correction report to comply with the legal reporting requirements.

Attachment Service

You can store the various attachments in SAP S/4HANA for advanced compliance reporting to have a complete repository for various statutory reporting. For advanced compliance reporting specific configuration, see the document attached to the SAP Note 2374069 to configure attachment service.

Support for BRFplus for Business Rules Definition

SAP S/4HANA for advanced compliance reporting supports the SAP Business Rule Framework Plus (BRFplus) for incorporating business rules such as changing the case for text to upper or lower, doing simple arithmetic calculations, or string concatenate.

Design Tools for New Reports/ Changes in Reports

The Run Compliance Reporting app is extensively supported by Define Compliance Reporting. SAP S/4HANA for advanced compliance reporting provides you with preconfigured or standard report definitions. Business key user/business configuration expert can choose to use the existing report definitions, create your own report definitions, or extend the ones delivered by SAP based on your business requirements. The Define Compliance Reports app provides you with an intuitive wizard that takes you through the steps required for creating report definitions. While creating report definitions, you can choose the reporting mode as either Classic or Enhanced. For more details about using the Classic mode, see the document “Adopting Classic Mode” attached in SAP Note 2465179. Table 3 summarizes the differences in the Classic and Enhanced modes.

Now you have an understanding of how SAP S/4HANA for advanced compliance can help you reduce compliance cost and increase efficiency in reporting.