During the Deploy phase the cutover plan should be executed to ensure the system is ready for productive use on the go- live date! The cutover will include many activities including (not exclusive) of the steps below when focusing on the finance scope: 

1. Communicate to all employees the exact dates that the old (legacy) system will cut off and be shut down. This cut off is the last day they can enter anything, for example an invoice, into the legacy system. Consider when the last day the business will upload and process bank statements in the old system (it is recommended the bank reconciliation is as clean as possible) is and agree the last day they can access the old system to retrieve information / reports etc. 

2. There will be a period where the business cannot enter any invoices or bank statements in the old system and no entries to the new system can be made. That window must be managed and communicated in advance. The length of this period depends on how fast the books can be closed and the cutover load files created for the new system. Generally, it is the people and processes required for the exercise than cause delay rather than system limitations. The team will have to collect invoices and enter these into the new system as soon as it is available. 

3. The cutover plan must be managed by the project team and dependencies should be clearly identified as they drive the sequence of activities. The plan should therefore include milestones and sign-offs by the responsible parties. For example, before starting the cutover the Productive system needs to have all configuration aligned but release the project in the Q system (consider who will verify this and when). 

4. Another key activity is to extract the balances from the legacy system and validate the files prior to loading; there must be someone responsible for this. 

5. Deciding who needs to be fully available during the cutover period and those who will be on standby is key. Once this is decided, all team members must understand the process and the role they will play. 

6. Before the actual cutover takes place, the cutover sequence and files should be tested in the Q system. Here any errors, missed dependencies and missing information can be discovered and rectified. Moreover, it is the highly recommended that whatever approach is taken the cutover is fully tested before implementing in the production system. This means running at least one end-to-end test cycle in the Q system (most companies will complete this multiple times prior to the cutover weekend). 

Dates and timelines for Cutover
The exact dates and timeline for the cutover should be decided based on business requirements. However, the general recommended best practice is that the cutover takes place at a period end. This means that the business can then begin the new period in the new system and avoids confusion for business users due to unavailable line items pre-cutover for reporting, period end across two systems and tricky reconciliation of open G/L items. 

Templates
From a technical perspective SAP provides standard migration templates for finance data in S/4HANA Cloud. The key templates related to finance transactional data are shown below:

Business Object Name

Area

Business Object Type

Migration Cockpit Object Name

Dependant Migration Object

Accounts Receivable (Customer) Open Item

FI

Transactional data

Accounts receivable (Customer) open item

Cost Centre

Accounts Payable (Vendor) Open Item

FI

Transactional data

Accounts payable (Vendor) open item

Cost Centre

G/L Account Balance

FI

Transactional data

G/L balance

 

G/L Account Open/Line Item

FI

Transactional data

G/L open/line item

 


These will be used to load the migrated data. Additionally, it should be noted that the migration tool provided by SAP used the following migration accounts which are predefined: 

Account

Description

Migration Cockpit Object Name

39913000

Initial FI-AM offset

Fixed asset (incl. balances and transactions)

39914000

Initial FI-AR offset

FI – AR open item (Customer)

39915000

Initial FI-AP offset

FI – AP open item (Vendor)

39916000

Initial other G/L offset

FI – G/L account balance

39917000

Initial other Open Item G/L offset

FI – G/L account open/line item (deprecated)

Prerequisites:
- Exchange Rates loaded to Production system
- Customer master data loaded to production system
- Vendor master data loaded to production system
- GL Accounts created and assigned to related company codes
- Cost Centres created and assigned to related company codes
- Profit centre created and assigned to company code
- Bank master data created
- Make Company code settings – Asset Accounting Specific – Transfer Date

Account balances only at the time of cutover
Using this approach, you  will migrate the balances for all accounts at the time of cutover, for the Trial Balance (TB) the balances of the accounts will be updated, and the related migration account will be updated as the opposite side of the entry using the Migration Cockpit. At a high level from a Finance perspective this approach should include the following steps:
- Post balances for previous year with posting date the last date of the Fiscal Year (if required for reporting)
- Close Previous Year period (if required for reporting)
- Post GL Balance for GL accounts 
   o Reconcile TB from S4HC to Legacy TB
- Post Open Vendor Invoice only
   o Reconcile TB from S4HC to Legacy
- Post Open Customer Invoice only
   o Reconcile TB from S4HC to Legacy

Once the TB is fully reconciled for the period you can release the system to the business for processing. 

For all financial documents migration objects, the posting date should be set to the cutover date of the period. A high-level accounting schema for this approach is shown below. This is for illustration only but provides a high level overview of the postings. 

In S/4HC the bank reconciliation is managed on the balance sheet. For this we have: 
- Balance sheet account which represents the main bank account 
   o Balance as per this account should match the balance 
- Balance sheet account which represent bank sub accounts
   o These accounts include any reconciling items between the main bank account and the balance in the system including AP items not cleared and AR items no cleared against open items

For bank related posting as part of the migration you will create:
- Bank account balance as to the latest bank statement posted (it is recommended that ALL bank statements are posted at time of cutover and the bank reconciliation are reconciled as much as possible) in the legacy system should be posted to the Main Bank Account
- Unreconciled balances posted to the related bank sub account, such as uncleared vendor payments to the outgoing payment subaccount and uncleared incoming customer payments to the incoming payments subaccount. This is shown in the document (5) below. 

Once the cutover is complete and the subsequent bank statements are posted in the system, the missing outgoing payment will be posted from the bank statement and must be cleared against the migrated balance (document (6)). The incoming payment balance must be cleared against customer open items (document (7))

In the example below, for simplicity, we show the exact amounts but in practice the balances will probably be cleared against multiple items which may increase the effort for reconciliation. To reduce the effort we would  recommended that the bank reconciling line items are loaded as part of the migration process.