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This is Blog #7 in our Record to Report Blog Series. You can find the complete series outlined HERE.

Author: Pete Graham, Experienced Solution Management Software Professional, SAP

The Latest Market Overview

Many customers have selected SAP Contract and Lease Management (CLM) to assist them with their compliance needs related to lease accounting. These lease accounting needs are still very strongly influenced by the recent adoption of IFRS 16 / ASC 842 in 2019.  These new lease accounting regulations brought lease liabilities onto corporate balance sheets.

Over the last few years, SAP has learned a tremendous amount of information about how customers have adopted and adapted to these new lease accounting standards.  As a result, the SAP Contract and Lease Management (CLM) solution released an updated valuation engine  in Q1 2021 to provide more flexibility in managing lease accounting needs.

SAP Contract and Lease Management (CLM) can be purchased by itself or bundled with SAP Real Estate Management.

Very recently business activity influenced by the pandemic has brought a lot of interest in the lessor equipment space and for those customers the SAP S/4HANA Accounting Integration (SAI RoadMap) (SAI Help) product should be of interest.  SAP S/4HANA for Accounting Integration is a SAP Innovative Business Solution that can currently either integrate with a 3rd party or legacy leasing contract management solution or be used to co-innovate with customers and create an E2E leasing solution in S/4HANA.

Customers still frequently ask about the best ways to manage their lease accounting needs over time.  My experience has found that the Comply, Optimize, & Transform (COT) paradigm applied to lease accounting is an excellent and very successful framework in helping customers chart a path forward regardless of their starting point.  We first starting using the COT methodology successfully with CLM customer sessions about five years ago and still find it very helpful today.

The idea is to quickly match up a customer’s immediate goal with their current state and then develop a plan of action to productively achieve the desired goal.  For instance, a customer’s immediate goal could be to

  1. Comply with a current lease accounting need, or to

  2. Optimize an on-going lease accounting process, or to

  3. Transform lease accounting operations in a stepwise fashion.

The good news is that the SAP S/4HANA Intelligent Enterprise led by SAP Contract and Lease Management (CLM) can help customers achieve any of these goals by playing a leading role in the appropriate plan of action.

SAP CLM can quickly help customers in

use case 1) by offering a robust solution that can be quickly adopted On-Premise or in the Cloud.

SAP CLM has assisted customers in

use case 2) by providing customers with continuous improvements overtime increasing each customer’s ability to optimize their processes.

And customers in

use case 3) looking to transform their operations can jump from a legacy system right to an SAPS/4HANA Intelligent Enterprise solution introducing stepwise improvements in financial operations and visibility related to lease accounting.

SAP CLM is widely used tool world-wide assisting customers with their lease accounting needs.  Existing CLM customers wanting to learn more about potential improvements to CLM with the ability to provide feedback on them should check out the SAP Customer Connection focus topic SAP Contract & Lease Management and Real Estate Management (Amer...

Call to action: To learn more about process efficiency in the Close, join us and customers at the virtual event for Financial Close and Reporting.

Check out the rest of our series:

R2R Series Blog #1: Record to Report Blog Series Kick Off | SAP Blogs

R2R Series Blog #2: How to increase process efficiency in the financial close leveraging SAP’s Moder...

R2R Series Blog #3: Why did the accountant cross the road? | SAP Blogs

R2R Series Blog #4: Ignite Your Growth of Bottom Line with SAP S/4HANA GR/IR | SAP Blogs

R2R Series Blog #5: Hard Close, Fast Close, Soft Close and Continuous Accounting | SAP Blogs

R2R Series Blog #6: Build vs Buy – 3rd Party Data Integration for SAP Central Finance | SAP Blogs

R2R Series Blog #7: Market Overview – SAP Contract and Lease Management | SAP Blogs

R2R Series Blog #8: Make your SAP S/4HANA for Central Finance implementation a success | SAP Blogs

R2R Series Blog #9 Automated Revenue Management | SAP Blogs

R2R Series Blog #10: Why You Need SAP Account Substantiation & Automation by BlackLine if you’re run...
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Thanks for the informative blog. Can you please help me with the key differences in both the solutions i) CLM ii) Real Estate Management