Entity & Group closing is always a focus areas for Finance teams and Office of the CFO. With SAP S/4HANA the solution called – “Group Reporting” is the one which is part of the roadmap. It provides functions for group accounting and management reporting by supporting process control, data collection, data quality control, consolidation, and reporting. Drilling down from reports to the operational accounting journal is also supported
Application component in SAP is – FIN-CS (SAP S/4HANA for Group Reporting)
The key features are:
- Collection of the reported financial data. When all systems have their transactions replicated to Central Finance that CFIN system will serve as the data source
- Generation of the organizational units of consolidation, based on the units in the transaction system
- Posting manual journal entries, for example, to standardize the reported data to the group’s methods of balance sheet valuations
- Central finance will bring the data from several systems to the central system in their source currencies and then the translation of the reported financial data into the currency of the consolidation group will be done by group reporting
- Validations are provided to check the consistency of the reported, standardized, or consolidated financial data
- Automatic intercompany eliminations (payables and receivables, revenue and expense, investment income) and investments consolidation
- Hierarchy definition for the master data specific to consolidation
Leverages Universal Journal
To simplify the group financial close process, SAP S/4HANA Finance for group reporting 1809 uses SAP Universal Journal as a single source of truth. The universal journal is the basis of an integrated accounting system combining general ledger accounting, asset accounting, controlling and material ledger.
Several ERP systems can be combined with Central Finance to bring data to Universal Journal and from their it will be leveraged for group reporting.
There is also a buzz about future of BPC. This may help in planning
BPC Product Placement considering 2025 timeline
- Preferred Solution for Planning in SAP S/4HANA is SAP Analytics Cloud
- Preferred Solution for Consolidations in SAP S/4HANA is Group Reporting
But due to security, regulatory or policy reasons if client is looking for 100% On Premise solution or the scenarios/customizations are beyond the scope of public cloud then BPC 11.0 running on BW/4HANA is the only way to go. BPC is still part of the strategic portfolio of SAP and it will still be supported. However, it doesn’t seem like innovation is being built to support the S/4HANA Optimized approach.
So in summary Group Reporting is the way to move forward and with SAP Central Finance this would be the best fit since CFIN is focussed towards bringing transactional data to one table and that serves as the foundation to Group reporting.
Will add more about this in future blogs…
Read more about Group Reporting at SAP HELP