Is closing the books keeping your CFO awake at night?

Periodic closing of the books and timely financial reporting are not new requirements. But with the accelerating pace of business, the finance department has to deliver faster, reliable data, and with full transparency and compliant with regulatory requirements!

CFO, anonymous

Financial reporting is an extremely valuable asset. The longer it takes to prepare the financial statements, the less valuable the information becomes (Steve Rosvold). Traditional “hard close” reporting can only be produced after the end of the period. Finance could only make a recommendation to the business after the month-end, based on previous months results. Moreover, for statutory compliance – for example IFRS 10 – preparation of a Consolidated Financial Statements is mandatory. The new SAP S/4 HANA Group reporting tool now provides real-time insights into finance and operations, supports the computations, creation and disclosure of consolidated reports and analysis and plan consolidations. Today’s successful CFOs collaborates closely with their business counterparts on the operational side and are playing a greater role in identifying risks: Financial, supply chain, marketing, talent management etc.

How: Through real-time and in-depth analysis, insightful reporting, continuous data monitoring processes, change management process and constant communication to stakeholders. SAP’s new Group Reporting tool embedded in SAP S/4 HANA facilitates not only the above processes, but also has added the below reporting capabilities:

• Real-time reporting. Data flow from transaction systems to the consolidation system in real-time. Slice and dice facilities. 
• Preparation Financial Statements as per Statutory regulations
• Combine relevant financial data with operational data to facilitate better decisions
• Financial consolidation on real-time transactional data
• Managerial financial consolidation capabilities for both On-Premise and Cloud customers
• Local and Group close share the same master data rules
• Currency Translation can run an ongoing basis
• Elimination and Consolidations of Investments 
• Data Validations and data collection options from Universal Journal, manual journal entry, automatic posting, published API from other SAP’s, partner or customer applications
• Transparency: Enable drill-down facilities from Group Reporting to the line items of the entity, leveraging all details of the underlying Universal Journal
• Leverages “single source of truth” being the transactional data from ACDOCA and Consolidated from ACDOCU

S/4 HANA Group Reporting Process

S/4 HANA Group Reporting tool combines with the features of existing reporting tools and is well-integrated with SAP Analytics for Cloud, which helps to create live data connections, and depending on the report enables an analysis of periodic or year-to-date (YTD), values of actual, plan, forecast, and variance data. Financial Statement Items are the crucial elements in Group Reporting, and it replaces the old Group CoA. There are separate settings to specify how the Financial Statement Items should be carried forward to the next year. There are also separate configuration settings available to specify automatic posting financial items, such as for P&L Net Income, for rolling that up into a balance sheet, FS Items for posting deferred tax, etc. In general, data quality should higher when using Group Reporting because it is deployed on a single environment for entity and group close. Every newly created GL account should be mapped to a financial statement item, so the periodic Operating CoA maintenance activity should include this important step. Master Data such as Profit Centres, Cost Centres etc. can be shared between the consolidation solution and the core S/4HANA. Any such data can be uploaded from predefined excel templates based on the type of master data. It provides all the activities we need for successful group close.

Consolidation Tools

The consolidation process is always challenging for many organizations. It needs agility, speed, real-time automation and transparency. Consolidation and financial close applications where a lot of customers who currently use SAP BPC (Business Planning and Consolidation) or some other 3rd party consolidation solutions (e.g. Hyperion, Cognos etc.) are trying to figure out what the appropriate tools to solve the common challenges companies are facing with data collection, intracompany reconciliation as well as time-consuming monitor processes and status among different subsidiaries. It is clear that they prefer to select a platform which can provide them with rapid payback and strong ROI.

Here we can see new consolidation features such as:

•  Postings can be checked continuously against centre validation rules
• Certain consolidation adjustments can be done locally, before the final consolidations
• Drill-down capability from consolidations to the line – items level, instead of transformation in multiple systems
• Agility for closing the books faster, account driven consolidations rules 
• When using live data to run consolidation, the data can be used to budget, forecast and compare the plan data with actual

SAP S/4 HANA Group Reporting tool comes with useful reports such as consolidated financial statements, cash flows, statement of changes in equity and statement of comprehensive income. It supports the complete flow of collection, processing, analysis and publication. Furthermore, SAP Group reporting has some features, which will simplify the following complex and advanced processes in Consolidation:

• Multiple subgroup currencies 
• Improve data quality
• Integration into the financial closing cockpit
• Automated Inter Unit Profit Elimination from Inventory
• Integration Scenarios with planning applications
• Increased efficiency through advanced intercompany reconciliation  
• Intelligent Data Validation leveraging Machine Learning
• Matrix Consolidation

SAP S/4HANA Finance for Group Reporting should streamline group closing, which will help to create an Intelligent Enterprise. SAP recommends customers looking for consolidation application embedded within the cloud and on-Premise to adopt this application.

Group Reporting Deployment Options are:

• On Premise
• Private Cloud
• Single Tenant Cloud 
• Multitenant Public Cloud

Group reporting can be used independently from operational accounting or other ERP functions in SAP S/4HANA. If you want to learn if S/4HANA Group Reporting could be useful for you, contact infiniance today.