R2R Series Blog #11: How SAP Account Substantiation and Automation by BlackLine Complements SAP Treasury Management
Authors: Molly Boyle, Director – SAP Solutions, BlackLine & Elizabeth Milne, Accounting & Financial Close Expert, SAP
This is Blog #11 in our Record to Report Blog Series. You can find the complete series outlined HERE.
In today’s dynamic business environment, business leaders need to make decisions quickly, with complete and accurate data.
Cash positioning and liquidity management are often critical areas of focus, but with complex operations, increasing sources of financial data, and high volumes of transactions, it can be a challenge for Treasurers and Controllers to provide the real-time visibility needed to support their businesses.
Leading Treasurers and Controllers are deploying technology solutions like SAP Treasury Management and SAP Account Substantiation and Automation by BlackLine to improve visibility into working capital, lower financial risk, and support the strategic needs of their business.
You may be wondering – What does SAP Treasury Management do? What is SAP Account Substantiation and Automation by BlackLine? And do I need SAP Account Substantiation and Automation by BlackLine if I have SAP Treasury Management? Before we dive into these questions, lets first clarify what we mean when we say reconciliation vs. substantiation as there is a subtle – yet important – distinction between the two that is helpful in understanding the solutions.
Reconciliation vs Substantiation
Reconciliation is the comparison of two or more different sources of information for the purpose of confirming their agreement and identifying exceptions or adjustments. In the context of the financial close, however, the terms reconciliation or account reconciliation, is often used interchangeably with substantiation. Substantiation is a comprehensive process that includes reconciliation of underlying data and systems but also validation of the completeness and accuracy of the ending balance.
We covered this topic in more depth in our previous blog post: R2R Series Blog #10: Why You Need SAP Account Substantiation & Automation by BlackLine for SAP S/4HANA | SAP Blogs
SAP Treasury Management
Treasury teams need to manage their daily cash operations and to be strategic advisors to their business partners. They need to be able to answer questions like – What is our cash position? Do we have enough cash? How does the timing of this payment impact our working capital position? What is our foreign currency exposure? Do we need to adjust our hedge positioning?
To inform these decisions, Treasurers rely on daily cash positions and cash flow forecasts. SAP Treasury Management was created for the treasurer and provides a complete platform that enables full cash visibility from multiple sources of data including banks, trading platforms, market rate sources, and other systems. SAP Treasury Management also reconciles information across these data sources and SAP to ensure a complete and accurate set of data for decision making.
Users can also simulate what-if scenarios, build projections on future scenarios, and review KPI’s and other relevant information in dashboards.
SAP Account Substantiation and Automation by BlackLine
Like Treasurers, Controllers have a unique set of responsibilities within the Office of the CFO. Among these are executing activities associated with producing complete and accurate financial statements, assessing the technical accounting impacts of business transactions, and ensuring the design and operating effectiveness of internal controls.
While Treasurers are responsible for the daily cash operations, planning, and forecasting, Controllers are responsible for validating and reporting on cash and cash equivalents as a component of the company’s financial position at period-end. In other words, Controllership is typically responsible for the cash substantiation process as a part of the financial close.
For many accounting teams, substantiation of cash and other balance sheet accounts is a manual process performed in spreadsheets. It involves sourcing and manipulating transactional data, attaching supporting documents and schedules, signing off on key work steps, and other activities that take too long and introduce unnecessary risk.
SAP Account Substantiation and Automation by BlackLine transforms the manual accounting work by automating repetitive work, unifying SAP and non-SAP data in the cloud, and enhancing visibility and control. These SAP solutions address the balance sheet substantiation process with standardized templates, intelligent workflows, and rules-based auto-certification. In addition, they simplify audits by providing self-service auditor roles, centralizing supporting documentation, and allowing for easier collaboration in the cloud.
SAP Account Substantiation and Automation by BlackLine includes a purpose-built reconciliation templates for all GL accounts, including bank reconciliation, designed specifically for substantiating GL balances efficiently and consistently across SAP and non-SAP ERPs. These templates automate the reconciliation of individual transactions from all data sources, can create reconciling items such as outstanding checks, and can automatically create and post adjusting journal entries.
Do I need SAP Account Substantiation and Automation by BlackLine if I have SAP Treasury Management?
Yes, as there are unique benefits to each solution. Both solutions are purpose-built to deliver value within the Office of the CFO. SAP Treasury Management provides Treasurers with solutions needed to manage their daily cash operations and SAP Account Substantiation and Automation by BlackLine provides Controllers with a platform to transform the financial close, including balance sheet substantiation.
Used together, SAP Treasury Management and SAP Account Substantiation and Automation by BlackLine enable Treasurers and Controllers with greater automation, visibility, and control.
Call to action: To learn more about SAP Solution Extensions by BlackLine check out the SAP Track at BlackLine’s virtual event BeyondTheBlack.
Check out the rest of our series: