When planning target architecture based on business capability assessments, the General Ledger Accounting capability under the SAP RBA (Reference Business Architecture) model lists the SAP Account Substantiation and Automation by BlackLine product in addition to SAP S/4HANA. This leads to the requirement to understand how the products are relevant in terms of capability fulfillment and what is relevant for specific target architecture.
This article provides an overview of related evaluation and decision criteria.
The General Ledger Accounting capability is defined in the RBA model as the ability to record and summarize general ledger postings resulting from business transactions. It provides reporting capabilities such as for balance sheets and profit-and-loss statements.
The target solution capability for this business capability therefore needs to provide complete end-to-end accounting functions to serve as the financial system of record.
The following solutions are available for the definition of target architecture with the SAP Intelligent Suite.
1. SAP S/4HANA
SAP S/4HANA is at the heart of the SAP Intelligent Suite solutions for Finance. It serves as the system of record for Finance and is mandatory target architecture to support all core finance processes.
SAP S/4HANA provides core functionality in the Universal Journal to support all record to report processes. The general ledger is fully integrated with all financially relevant logistics and human resources processes supported in the Intelligent Suite, in addition to subledgers related to Accounts Receivable, Accounts Payable and Asset Accounting.
Finance in SAP S/4HANA supports all the international requirements that need to be met by the financial accounting needs of an organization. As indicated in the standard help, this is available through the following features.
2. SAP Account Substantiation and Automation by Blackline
SAP Account Substantiation and Automation by Blackline is a purpose-built SaaS partner-built application that automates and streamlines some of the most labor intensive financial close processes. The solutions address the risks associated with and time spent on traditionally manual month-end processes including balance sheet substantiation, manual journal entry processing, transaction matching and closing task management. SAP Account Substantiation and Automation reduces or eliminates routine, manual tasks and adds visibility and standardization.
The substantiation process refers to the reconciliation and validation of financial data through matching, detailing of variances, identifying discrepancies with full transparency through documentation and approval workflows.
SAP Account Substantiation and Automation by Blackline provides the following features.
Account Reconciliation: Import of GL data into standardized reconciliation templates to compare balances, automated matching, identify discrepancies, perform adjustments, attach supporting documentation with automated approvals and workflows.
Journal Entry: Configuration of rule-based logic to standardize and automate the creation of journal entries from multiple sources, with workflows and approvals. These documents can then be posted into target ERP systems.
Variance Analysis: Import balances from multiple sources and automatically calculate variances and flag exceptions with routing to control owners for actions.
These are key functions related to account substantiation and not the full scope of the solution. There are multiple other capabilities such as task management, matching and compliance functions that are more relevant to close functions and inter-company reconciliation and therefore not covered in this article, which focuses on key GL accounting capability.
In all cases, please refer to the latest SAP product collateral available on these topics to stay on top of current releases. A good starting point is the Finance and Risk Hub.
The business capability characteristics that drive the inclusion of this solution in the target architecture would relate largely to transactional accounting complexity across a heterogenous landscape. Some relevant characteristics that could lead to a need for SAP Account Substantiation and Automation by Blackline to be considered target architecture for the General Ledger Accounting capability could be the following.
The following diagram illustrates a generic use case for the use of SAP Account Substantiation and Automation by Blackline (including inter-company reconciliation) in conjunction with SAP S/4HANA, denoted by legends A, B and C.
The core target architecture component in realizing General Ledger Accounting capability is SAP S/4HANA. In order to determine the additional need for SAP Account Substantiation and Automation by Blackline, solution considerations based on the capability characteristics related to accounting substantiation should be the drivers, as detailed in this article, taking into account the delta needed from similar functions that exist in SAP S/4HANA.