Elizabeth Milne, Accounting and Financial Close Expert, SAP
Molly Boyle, SAP Solutions Expert, BlackLine
In our last several blogs, we’ve reviewed SAP’s core ERP functionality, including the differentiators of SAP S/4HANA, and how BlackLine’s financial close offerings extend and complement the ERP. In today’s edition, we’ll discuss scenarios involving high volumes of transactions and compare SAP solutions for matching and reconciling to BlackLine’s functionality.
What is transaction matching, anyway?
Balance sheet substantiation, manual journal entries, and task management tend to get a lot of attention when it comes to the month-end close. One challenge not as commonly discussed is high-volumes of transactions. Specifically, how balances in certain general ledger accounts are made up of hundreds of thousands of individual line items that must be reconciled against other data sources to be substantiated.
Despite the other critical tasks on their plate, accountants often spend a significant amount of time using spreadsheets, formulas, and other error-prone processes sifting through mountains of data to identify errors, exceptions, or reconciling (unmatched) items that require follow-ups or adjusting entries. This is the challenge of transaction matching.
SAP ERPs and SAP Account Substantiation and Automation by BlackLine have functionalities to automate and de-risk the traditionally manual methodologies. Let’s explore them.
SAP’s matching solutions
As we discussed in our earlier
blog, one of the benefits of SAP S/4HANA’s Universal Journal architecture is its elimination of some basic reconciliation, or matching, scenarios like reconciling sub ledger details to the general ledger. For those organizations not yet running SAP S/4HANA, SAP ECC offers standard reports to help facilitate the reconciliation of data within the ERP. Subsequent steps, which are typically manual, are then required to identify errors or make adjustments.
Beyond standard sub ledger to GL reconciliations, SAP has robust transaction matching capabilities for a few specific and complex use cases. First, using SAP Leonardo Machine Learning capabilities, SAP Cash Application solution learns from accountants’ past manual actions to apply payments to open invoices. This intelligent receivable matching helps companies to lower days sales outstanding and free accountants from manual work. In addition, SAP Goods and Invoice Receipt Reconciliation provides transaction matching functionality to optimize and clarify the SAP open items derived from the purchasing process.
A flexible extension of the SAP ERP
While the ERP is the system of record and the general ledger and related sub ledgers contain important financial data, critical information for reconciliation and substantiation lives outsides the ERP, as well. Other data sources might include bank detail, point-of-sale systems, credit card detail, payroll or HR systems and more. And disparate ERP landscapes pose additional reconciliation challenges.
To extend SAP’s intra-ERP functionality, SAP Account Substantiation and Automation by BlackLine has robust, flexible transaction matching that support a variety of use cases and allow for reconciliation of information from any data source – including those outside of SAP. These solutions can handle robust logic, complex data relationships (think one-to-many and many-to-many), and fields outside the ERP.
BlackLine’s Transaction matching functionality in SAP Account Substantiation and Automation by BlackLine is flexible, business owned, and fully integrated with other processes such as balance sheet substantiation and journal entry management. This allows for maximum automation and auditability. And as the business or systems landscape evolves over time, rules engine can be easily updated without involving IT.
More time to focus on what matters
With the advanced rules-engine provided by SAP Account Substantiation and Automation by BlackLine, organizations have matched millions of transactions in seconds or minutes. The solutions identify exceptions and suggest matches, which help focus accountants’ attention on potential risks and adjustments, freeing them up from the manual “rainbow spreadsheets” to which they’re often accustomed. Adjusting journal entries and clearing documents can also be automated and posted directly to SAP ERPs, and reconciling items are automatically incorporated into the balance sheet substantiation process.
A Blog Series to Answer Your Questions
There are a number of common questions about BlackLine and SAP and how our solutions work together. Please check out these blogs to answer them:
Check out the SAP S/4HANA Finance Reasons to Move on demand webinar series
https://www.sap.com/move-finance
There are specific deep dive session for SAP Solution Extensions by BlackLine
Register for "Establish Trust Across the Financial Close" to gain access to
Create More Efficient, Transparent, Trusted Accounting Processes: SAP Account Substantiation and Automation by BlackLine
Bring Governance and Automation to Your Intercompany Processes: SAP Intercompany Financial Hub by BlackLine
