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Written by: Bhavin Topiwala, Director R&D – Integration @ Nakisa   

Read Time: 8 Min 

In a blog series, Nakisa’s Chief Technology Officer, Faraz Ahmed explained why businesses and organizations need a lease accounting solution that can natively integrate with ERP systems such as SAP S4/HANA, SAP ECC or Oracle EBS. A lease accounting and administration solution can leverage SAP, or Oracle ERP’s master data, mirroring objects and data fields to accomplish lease accounting and real estate tasks easily.  

When integrating with SAP S/4HANA, all accounting transactions should flow automatically without manual intervention. Nakisa’s setup enables SAP ERP’s General Ledger (GL), Accounts Receivable (AR), and Accounts Payable (AP) to record all business transactions and financial information related to the leasing of equipment and real estate. 

Now that we understand the importance of integrating your lease accounting & real estate solutions with your ERPs, let us talk about SAP S4/HANA and SAP ECC and how Nakisa can integrate with both systems. 

What is SAP S/4HANA? 

SAP S/4HANA is the new modular ERP solution offered by SAP (debuted in 2015) that leverages SAP’s database (HANA). SAP’s in-memory database helped improve S4/HANA performance.  

SAP offers their new ERP system for on-premises and cloud, which prompted many global organizations to be interested. As a result, many are planning to migrate to SAP S/4HANA ERP in the next couple of years.  

SAP ERP Central Component (SAP ECC) 

SAP ERP Central Component (SAP ECC) is an on-premises ERP system introduced in 2005. SAP ECC can utilize various third-party databases.

Differences between SAP S/4HANA and SAP ECC 

Both solutions are different based on the database they use. For example, ECC runs on third-party database systems such as Oracle while SAP S/4HANA relies on the SAP in-memory database.  

This major difference between the 2 ERP systems requires us at Nakisa to have a more comprehensive approach when it comes to creating solutions that are both ERP and database agnostic.  

Now let us look at the basic similarities and differences of these 2 popular ERPs and how Nakisa can natively integrate with them.  

Integrating NLA and NRE with SAP ECC and SAP S/4HANA 

  • NLA & NRE utilize Nakisa Cloud Connector (NCC) to connect natively with both ERPs.  
  • The NCC uses secure open REST APIs that have been validated by ERP technology providers. To ensure data transfers are secure, NCC uses a two-way encrypted channel for all communication between ERP servers and the Nakisa cloud (using TLS over TCP), removing the need for back-channel VPN tunnels. NCC uses an ERP gateway to access the backend servers, enabling IT professionals to configure and leverage existing ERP infrastructure and security frameworks. (Read more about Nakisa Cloud Connector here
  • To retrieve SAP master data, we use SAP Remote Function Call (RFC) and store the result in the NLA and NRE database.  
  • For writeback to ERPs, we leverage the standard SAP BAPI/s to post documents to SAP. Such industry-wide accepted BAPIs are offered by SAP to all companies that would like to integrate solutions to their ERP systems while maintaining high quality and security. Nakisa also uses such integration points to offer other global organizations approved and verified integrations between their SAP systems and their Nakisa SaaS solutions.  
  • Nakisa uses only standard BAPIs that are delivered by SAP out of the box. There is no need for any additional Zbapis or transport packages to be installed.  

Note: Our solutions have the capability to leverage and consume Zbapis but our standard approach is to always use the official BAPIs provided by SAP to ensure maximum performance and security. Of course, we co-innovate with our partners for specific requirements of their global companies and their need from our SaaS solution, and for those reason, our solution can use those zbapis which are developed by them, and we can collaborate with them to ensure our solutions can work together seamlessly with no performance or security shortcomings.

  • Nakisa solutions can also integrate with the FI-GL module of SAP, where all asset-related data are stored in NLA and finance posting goes to SAP Financial General Ledger directly.  
  • Our NLA & NRE solution is designed to simultaneously integrate, read and write from multiple ERPs from different vendors (ECC, S4Hana, Oracle EBS). This will provide you with a global view of all your lease activities (property and equipment) through common dashboards and one disclosure report.  

Our solution does not limit your global expansion. It prevents any issues related to putting your global real estate & lease data in one consolidated format. Our solution is your system’s ultimate and reliable truth source.  

This is thanks to Our in-house GL engine that is designed to synchronize with various ERP general ledgers and create a global view of all your lease portfolios.  

For example, Nestlé S.A. has successfully integrated its 12 ERP systems with its Nakisa NLA SaaS Solution. 

Read about Nestle

Integration between your solutions helps users to avoid duplicate data points across their technology landscape. Users enjoy consistency when they have a secure and consolidated data source.

Nakisa is ACID complaint 

At Nakisa, we leverage standard native cloud protocols to synchronize data and to ensure data consistency between the systems, thus making our solution ACID-compliant (ACID stands for atomicity, consistency, isolation and durability and we will soon be releasing an article about this so watch our blog section to read about this in the next few weeks).

We have created multiple functionalities to simplify our users’ activities and to increase their trust in our system accuracy. For example, we provided a new functionality through UI to help users validate SAP postings. Our users and their auditors can use such functionalities to perform spot checks to determine the accuracy of their data

Classic GL and New GL – why does SAP S/4HANA support the latter?
  • In the SAP ECC system, the New GL is optional and requires considerable effort for proper configuration. However, by default, SAP S/4HANA system only uses New GL which can support parallel ledger. The New GL can create non-leading ledgers for parallel accounting like IFRS and GAAP. Parallel ledger functionality helps us create different sets of financial statements out of NLA or NRE. These new sets of financial statements benefit global organizations operating in different currencies.
  • When using SAP ECC in default mode (classic GL), only the leading ledger is present and parallel accounting is only possible using the accounts approach (not a straightforward workaround).
  • NLA & NRE can support both Classic GL and New GL out-of-box.
Classic Asset Accounting Vs New Asset Accounting:
  • New Asset Accounting is supported by both SAP ECC as well as SAP S/4HANA. However, you will need to spend considerable time enabling that on ECC.
  • SAP S4/HANA supports new asset accounting only which accepts parallel currency out-of-box. This is a vital requirement for global companies operating with different currencies and systems.
  • For New Asset Accounting, NLA calculates parallel currency amount and sends it to SAP automatically. SAP S4/HANA can accept this information without the need for any major configuration or adjustment to the system.
  • NLA solution supports both Classic Asset Accounting (only available in SAP ECC systems) and New Asset Accounting (SAP ECC & SAP S/4HANA)
How Depreciation calculation and posting happens?
  • Nakisa Lease Administration solution calculates depreciation through the application engine and posts the values to both SAP S/4HANA and SAP ECC using the SAP Standard BAPI.
Segment Reporting:
  • A segment is a new account assignment object (Profit Center and Segment) that can be used to produce Segment Reports to provide an additional dimension for users. It helps in running analyses for objects at a level lower than the company code. This is in line with the IFRS/IAS Segment Reporting requirements.
  • SAP S/4HANA can generate segment reports, unlike SAP ECC that cannot do the same by default.
  • Nakisa Lease Administration solution can send Cost objects and Segment objects to Finance General Ledger, providing more granular information to the accounting and finance teams.
SAP ECC and SAP S/4HANA are different. However, as lease administration and enterprise real estate solution provider, we seek to address our clients’ business and technology requirements including their ERP landscapes (Read about our clients). Our integration team works hard to ensure that all our solutions are always designed with both SAP ECC and SAP S/4HANA in mind. That is why we support both out of the box:
  • SAP ECC 6.0 Ehp5 version and onward.
  • SAP S/4HANA from 1503 version and onward.
As global organizations are planning to migrate to SAP S/4HANA, it is important that IT and SAP experts understand how their lease administration and enterprise real estate solutions can make this migration successful.
Nakisa’s cloud-native solutions are transforming accounting and real estate experience for growing organizations such as Walmart, Puma, Bridgestone and others. We are determined to provide support to companies hoping to migrate to SAP S/4HANA and ensure that their NLA and NRE solutions are perfectly synchronized with their SAP ERPs.
Contact us for more information on how to integrate Nakisa Lease Administration and Nakisa Real Estate Solution with your SAP S/4HANA.
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