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Managing Financial Close Tasks: An Ideal Combination of SAP Solutions

Elizabeth Milne, Accounting and Financial Close Expert, SAP

Molly Boyle, SAP Solutions Expert, BlackLine

It’s well known that “closing the books” is priority one for Accounting and Finance. At the end of each period, professionals from the staff accountant to the CFO perform and review activities and outputs to ensure the timely and accurate reporting of financial information.

The close includes many unique and often dependent tasks, such as reviewing general ledger transactions, recording manual journal entries like accruals, allowances, amortizations, intercompany charges, or allocations, and other activities including reconciling accounts, analyzing variances, and performing and certifying controls.

When close activities are complete, the work doesn’t stop. Accounting must then turn its focus to the audit. Before results can be reported externally, auditors perform procedures that facilitate the issuance of audit opinion.

For an audit to be completed, companies must prepare and provide details, schedules, supporting documents, and evidence. This is often a significant undertaking for the accounting department.

The Challenge: Identifying and Managing Financial Close Tasks

For many organizations, the visibility, accountability, and reportability surrounding the close is limited. A consolidated task or activity list often doesn’t exist—many organizations manage the process by entity, function, or individual. When a global list does exist, it’s often a shared spreadsheet containing hundreds or thousands of line items.

A spreadsheet-based approach to managing the close presents several other challenges, including:

  • Time-consuming and error-prone updates
  • Limited automation opportunities
  • Lack of proactive notifications, timestamps, and workflows

The Solution: Flexible, Intelligent Technology

Leading organizations are looking to software solutions to modernize the planning, execution, monitoring and analysis of all closing tasks. SAP’s end-to-end solutions for the financial close help customers improve governance, maintain compliance, drive efficiency, and enhance transparency into the closing cycles.

As a result, customers have successfully accelerated their close, or reduced risk by identifying and correcting errors that would have otherwise gone unnoticed. SAP can manage and execute repeatable tasks across the entire record-to-report cycle, giving Accounting a mission control center surrounding the critical activities.

SAP’s Financial Close Process Management solutions include:

  • SAP S/4HANA Cloud for Advanced Financial Closing (AFC)
  • SAP Financial Closing Cockpit (FCc)
  • SAP Account Substantiation and Automation by BlackLine (Account Reconciliations and Task Management)

These solutions can be used individually, or together for additional benefits. To illustrate deployment options, we’re highlighting some key use cases below.

Solution Overview

SAP AFC and FCc are SAP solutions that can execute tasks/jobs directly in SAP systems. In other words, these solutions are more than just a checklist. They offer intelligent functionalities like dependencies and automatic execution of certain activities, while also allowing for the tracking of manual tasks like preparing a reserve model or recording a manual journal entry.

Specifically, AFC orchestrates and automates record-to-report tasks across on-premise and cloud systems, while FCc is SAP’s traditional close management solution available for ECC 6.0 EhP4 & higher.

In previous blogs, we introduced SAP Account Substantiation and Automation by BlackLine, which addresses key close use cases including balance sheet substantiation, journal entry, and transaction matching.

Advanced Financial Closing and Financial Closing cockpit

Among the key differences between SAP’s Financial Close Process Management solutions is the delivery. AFC is a cloud solution, while FCc is on premise.

As a cloud offering, AFC reduces the need for hardware to host the solution. It’s hosted in the cloud and has quick time-to-value since it’s delivered with built-in best practices. AFC is also highly agile, which provides customers more flexibility and quarterly access to solution innovations.

AFC is SAP’s strategic solution for orchestration across the record-to-report process, which extends beyond the entity close to include the corporate close and statutory reporting processes. AFC also includes collaboration capabilities and extended workflow, analytics, and extensibility delivered with an optimized user experience.

Any activity that requires the performance of tasks in a particular order, with coordination among team members and clear documentation of the execution of these tasks, can be modeled and monitored in AFC.

SAP Account Substantiation and Automation by BlackLine

SAP’s solution extensions by BlackLine bring incremental value and functionality to the SAP financial mission control center by adding visibility, control, and automation to the financial close. In this blog, we’re focusing on how Task Management functionality, part of SAP Account Substantiation and Automation by BlackLine, can be used to address close management challenges.

Task Management is a configurable, cloud-based command center for managing accounting and finance tasks that are typically performed in Excel. Task Management cannot execute jobs or tasks directly in SAP systems. However, the solution does enable automation with intelligent workflow, and real-time dashboards.

Additionally, Task Management is fully integrated with the other functionalities in SAP Account Substantiation and Automation by BlackLine, allowing for intelligent dependencies and auto-certifications between tasks and account reconciliations or journal entries, for example.

Because it is a cloud solution, one of the benefits of Task Management is its ability to quickly make any type of checklist or task list easy to access from anywhere. The solution can replace any list of items that is managed in a spreadsheet, enhancing the process with visibility, accountability, centralized supporting documentation, and a complete audit trail.

Many SAP customers use SAP Account Substantiation and Automation by BlackLine to streamline and simplify audit processes. The solution has unique roles that allow auditors to access information, audit trails, and supporting documentation after approvals are complete.

Auditors can use the Task Management functionality to upload requests (also known as Prepared by Client (PBC) lists) in a single location. Clients can then attach requested documents and sign off. These audit-specific benefits have saved companies hundreds of hours of audit time, and reduced both audit fees and travel costs.

Combining Forces

As we have discussed, both FCc & AFC provide SAP customers the benefit of automatically executing tasks and jobs directly in SAP—and AFC’s extends beyond the entity close to cover all execution across record-to-report. For an even more comprehensive approach, both AFC and FCc can be used in conjunction with BlackLine Task Management.

For example, core SAP tasks and a complete list of close tasks can be maintained and managed in SAP AFC or SAP FCc. For activities that are performed in SAP Account Substantiation and Automation by BlackLine, like balance sheet substantiation, journal entries, and certain controls, the master task list in AFC or FCc could reference the BlackLine solution.

Together, these leading SAP solutions leave little reason for companies to manage their period-end close and related process and tasks in spreadsheets.

Shared value of AFC, FCc and BlackLine Task Management

  • Visibility – Real-time dashboards and reports with visibility of close process status
  • Control – Audit-trail and documentation
  • Collaboration – Workflow, notifications, and automated email alerts
  • Speed to value – Little to no IT support required to manage processes

A Blog Series to Answer Your Questions

There are several common questions about SAP’s Solution Extensions by BlackLine and how they complement and extend other SAP solutions. Check out these blogs for the answers:

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

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