Intercompany Reconciliation Automation with Machine Learning
Welcome to the blog post on Intelligent Intercompany Reconciliation Automation with Machine Learning and Advanced Intercompany matching and reconciliation solution from SAP S/4HANA Cloud.
Traditional Intercompany Reconciliation has been time-consuming and labor-intensive.
From subsidiaries point of view, there are lot of discrepancies which needs offline communication to find the root cause and resolve them and from Headquarter point of view, Group Accountant finds it difficult to explain the differences & inconsistencies due to large volume of data and takes much longer time for intercompany elimination, consolidation and corporate closing.
The drawbacks of traditional process can be overcome by using the advanced intercompany matching and reconciliation solution (Scope item 40Y) and by using the machine learning technology (Scope item 4LG) with SAP S/4HANA Cloud.
With SAP S/4HANA Cloud you not only get predefined rules for auto-match, but also get automatic matching capabilities through machine learning technology. The unmatched documents can be sent to the Intelligent Intercompany Reconciliation Service on SAP BTP (Business Technology Platform) for line item matching and reason code assignment and the matched documents proposal is then sent back.
What are the Business Benefits?
Save time, save efforts & save operation cost by automating the labor-intensive matching work. Increase the matching accuracy and transparency among the headquarter & subsidiary companies. Speed up the month end closing process, group consolidation & reporting, streamline local closing to corporate closing.
Business Users can learn how to automate intercompany reconciliation in SAP S/4HANA Cloud using machine learning with this Microlearning session.
Technical Users can learn how to set up the machine learning for intercompany reconciliation automation in SAP S/4HANA Cloud with this Microlearning session.
Two-Tier ERP business users can learn how to automate intercompany reconciliation with SAP S/4HANA Cloud using machine learning with this Microlearning session.
Two-Tier ERP technical Users can learn how to set up the machine learning for intercompany reconciliation automation with this Microlearning session.
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- Blog post series for Hybrid Cloud here
- Inside SAP S/4HANA Podcast here
- Microlearnings for SAP S/4HANA here
- Product videos on our SAP S/4HANA Cloud and SAP S/4HANA YouTube playlist
- Best practices for SAP S/4HANA Cloud here
- SAP S/4HANA Cloud User Community: register here
Thanks for the valuable information, Swati!
Do we need to activate 40Y - Intercompany Reconciliation Process if we are going to use 1SG - Group Reporting - Financial Consolidation when the parent company AND subsidiaries are in the same S/4HANA Cloud instance (i.e different company codes within same S/4 HANA Cloud instance).
I had a look at the setup of 40Y and it looks like it is for a scenario when there are subsidiaries in a different system or different S/4 HANA instance and requires API to send information into S/4HANA. Thanks again.
40Y - allows early analysis in the closing process to avoid differences altogether and to reduce the deadline pressure that normally arises during the end of a closing period. ICMR will provide a data import API for importing data from other systems to ICMR. By defining flexible matching and reconciliation rules, you can achieve high degrees of automation and continuous accounting. In addition, its in-app communication and workflow features eliminate the latencies very often seen in dealing with intercompany discrepancies, and, at the same time, improve visibility and transparency of your reconciliation process..
1SG -includes data integration with SAP S/4HANA, duplication avoidance (using the main actual table as a data source), flexible upload capability to collect financial data from non-S/4HANA subsidiaries, product validations to ensure data integrity, consolidation methods to produce statutory consolidation, and key audit reports and consolidated financial statements including Profit and Loss and Balance Sheet reports.
If parent company and subsidiaries are in the same S/4HANA cloud instance then you can still activate 40Y for early analysis & to reduce the deadline pressure, although its not mandatory.
To read more on 40Y - Please check out note 2815332 - FAQ About SAP S/4HANA Intercompany Matching and Reconciliation (Cloud).
Thanks for asking and your thanks for your interest.