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 Advanced Financial Closing (AFC)
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.
SAP AFC is SAP’s strategic solution to plan, orchestrate, automate and monitor your financial closing centrally. for your entire organization. In other words, this solution is much more than just a checklist. It offers 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. Automated account balance validation adds automation and control for the close bringing in the accountants only if there is actual work for them to do.
AFC orchestrates and automates record-to-report tasks across on-premise and cloud systems, providing you with a central hub to manage your close in a distributed landscape. The era of manual tracking and coordination is over.
Advanced Financial Closing and Financial Closing cockpit
SAP Financial Closing cockpit (FCc) is SAP’s old version of a financial close software. SAP Advanced Financial Closing (AFC) is SAP’s strategic go to market solution for managing the financial close process. 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 monthly 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, Recs and Tasks option, 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, 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 and the tasks can be orchestrated with AFC, for example leveraging tasks of type Note or Web Application, to gain greater control of the end-to-end process. If you need to analyze account balances beyond the transactions that are in SAP S/4HANA or you need to aggregate data across multiple systems, you can leverage SAP Account Substantiation and Automation by BlackLine that helps you to streamline and simplify audit processes. The solution has unique roles that allow auditors to access information collected from multiple systems, 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.
As we have discussed, AFC provide SAP customers the benefit of automatically executing tasks and jobs directly in SAP—and extends beyond the entity close to cover all execution across record-to-report. For an even more comprehensive approach, AFC 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. 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 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 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
Want to learn more about SAP Solution Extensions by BlackLine? Check out: