The highlights of this article:
Under the slogan "Consolidation is coming home", SAP is presenting the new strategic consolidation solution S/4HANA for Group Reporting. With this, SAP not only wants to advance the cloud strategy in the finance function, but also postulates the first and, according to its own statement, revolutionary integration of the group consolidation application into the ERP S/4HANA system landscape. This raises the question of how consolidated reporting will be created in the future and what will change for the associated Group Accounting and Controlling departments?
By using the so-called Best of breed solution SAP achieves significant added value under the name S/4HANA for Group Reporting.
If you look at the traditional processes of preparing consolidated financial statements, this is based de facto on a sequential processing of tasks in the local financial statements and the subsequent preparation of the group financial statements. Because the consolidation application has always been located outside of the ERP system landscape, the reporting data had to be delivered to the parent company in a package once the local closing activities had been completed. The activities on the consolidated financial statements could only begin once the data had been submitted.
SAP, on the other hand, promises to break with the old dogma with its overall Intelligent Enterprise concept. As part of the Digital Core, Group Reporting is integrated not outside but within the ERP. This makes it an integral part of the record-to-report process, the heart of which is the Universal Ledger, as a combination of the ACDOCx tables into a single source of truth. From data collection to real-time analysis of the data, everything takes place in a harmonized and standardized ecosystem.
The integration of group reporting into finance gives the impression that SAP no longer interprets the consolidated financial statements as an independent process, but as an extension of the individual financial statement process at group level. This impression is reinforced by several factors. On the one hand, the integrated consolidation solution was only published about two years after the first release of S/4HANA, and further developments are communicated as part of the innovations in ERP. In addition, the extensive best practices are advertised as if they only have to be activated and even die-hard accountants of the individual financial statements can dare to consolidate.
So goodbye group accounting thanks to S/4HANA? Is the task of preparing the consolidated financial statements atrophied or is the importance of the department falling? But on the contrary!
The close integration of the processes is based on a strongly integrated data model between the ERP level and the consolidation solution. In some cases, master data and dimensions are only created and maintained once in the ERP so that they can be used centrally. This requires close coordination between the consolidation department, which keeps an eye on the figures and requirements from the overall group perspective, and the ERP level, which also has to meet the requirements of the local units.
The direct integration into the S4 landscape allows an ongoing and simultaneous elimination of all IC relationships, which enables a continuous accounting approach. This also requires real-time currency conversion, which gives the user access to key figures in the group currency at any time. This not only leads to the avoidance of system breaks and differences due to time shifts or different data statuses, but also reduces data redundancies in the database to a considerable extent. Supported by validations running in real time, the data quality is improved as soon as the numbers are generated.
The focus is clearly on accelerating the preparation of financial statements by parallelizing and dovetailing the tasks of the local units and the group. In addition, the transparency is increased by the possibility of a real-time jump from consolidation to individual document level, without offsetting between accounting, consolidation and analysis. This opens up new possibilities and opportunities for companies to realign and decisively improve the processes of consolidation and group reporting as part of the digital transformation.
For these reasons, the involvement of the group accounting and group planning/controlling departments is necessary at an early stage in order to cover the requirements for a possible S/4 introduction and to equip the mostly expensive projects with the corresponding added value in terms of content. The increase in the degree of automation in the context of the individual financial statements for the tasks of preparing the consolidated financial statements requires that the know-how of Group Accounting is already queried at the origin of the posting flow in order to ultimately achieve the desired results.
With our 360° approach, we ensure that all areas are screened equally.
Discover the new possibilities of SAP S/4HANA FOR GROUP REPORTING together with our experts!
We will show you the optimal application possibilities in a transparent and understandable way using implemented practical examples. In a prior call, we would be happy to coordinate the focus of the appointment together.
Duration: approx. 2 - 3 hours. Target group: Accounting/Controlling departments and IT departments
In this way, you and your team can obtain information conveniently and efficiently. We are looking forward to your contact!
