SAP's Point of View – Expanding Scope of SAP AFC

[KatharinaR]

Financial closing is a critical process for every organization, and it can also be a complex, time-consuming task for accountants. Accountants face challenges like managing multiple data sources, ensuring data accuracy, and meeting tight deadlines. The lack of standardization and automation can lead to errors and delays in the closing process.

SAP recognizes these challenges and provides a comprehensive solution that streamlines the entire record to report process. SAP Advanced Financial Closing (SAP AFC), a key component of SAP's financial solutions portfolio, is set to expand its capabilities beyond the entity close, providing enterprise-wide intelligent automation and orchestration for accounting teams. SAP solution extensions by BlackLine smartly extend SAP Cloud ERP processes that address unique pain points related to particularly complex organizations, often with a mix of SAP and non-SAP ERP systems. By bringing SAP AFC together with the accounting add-ons by BlackLine, a single vantage point can be used to optimize record-to-report activities across even the most complex customer landscapes.

Visibility into all Cloud ERP activities across record-to-report

Today, SAP AFC provides powerful intelligent automation to help finance teams improve governance and compliance, drive efficiency, and gain transparency for tasks across record-to-report. It serves as a closing “hub” that gives teams a unified reporting view and can execute tasks across the SAP ERP landscape (SAP ECC, SAP S/4HANA, SAP S/4HANA Cloud, SAP Business Technology Platform). 

With the universal journal capabilities provided by SAP S/4HANA Cloud, certain accounting tasks can be moved forward from period-end into the business period to allocate work more smoothly across the period. Automated runs that perform matching and automate residual follow-on postings for goods and invoice receipt reconciliation and intercompany reconciliation transactions can similarly be scheduled, executed, and reported with SAP AFC. Companies benefit from standardized, automated treatment of these cases, with configurable approval steps and automated documentation.

SAP S/4HANA Cloud has strong balance validation capabilities that can be initiated by business users. Accountants set rules that are executed automatically; the system sends notifications when thresholds are exceeded. These validations can be performed at certain points during the period or pre-close to check posting progress, or towards the end of the close as an internal financial control. As they are highly automated, these validations serve as a critical control mechanism for a successful close that does not strain accountants’ time.

Finance teams are embracing technology, including using bots to eliminate manual errors related to repetitive manual tasks. SAP AFC can orchestrate and coordinate SAP Process Automation bots as part of task chains including  accessing and preparing data or the mass creation of master data. SAP AFC sends notifications as required and gives the business owner of the financial close the oversight of bot statuses. SAP Process Automation workflows can also be used to route specific manual follow-up tasks or approvals through your organization. These workflows are embedded into SAP AFC-monitored process chains for visibility; this eliminates the alternative email-centric workaround processes that often result in stalled job chains and delays.

When the entity close is complete, complex organizations move to the group closing and statutory reporting part of the record-to-report process. Many companies orchestrate SAP Intercompany Matching and Reconciliation via SAP AFC, and there are customers already using SAP AFC to monitor certain tasks in SAP S/4HANA Finance for group reporting. Later this year, SAP plans to make group reporting-specific parameters available to the business users utilizing the SAP AFC closing task list. As is the case for entity-related activities, companies will be able to use integrated workflow and notification capabilities for corporate close tasks, as well as be able to add notes and attachments to document group close tasks comprehensively.

Since the release of SAP AFC, companies have been managing specific statutory reporting tasks such as local sales reporting using task execution and team collaboration capabilities. Any series of steps that need to be performed, in a particular order by accountants, can benefit from SAP AFC’s workflow, automated documentation of task performance, and reporting capabilities.

Going beyond Cloud ERP

In the future, SAP AFC’s task-execution triggers and status reporting will cover the full spectrum of activities in the record-to-report process, regardless of whether they are performed in an SAP system.

Many companies post a large volume of journal entries at period-end to account for situations not covered by integrated logistical processes. In the first half of 2025, SAP plans to release new SAP Business AI capabilities that will reduce the effort related to certain manual journal types, like provisions and accruals. However, especially for one-off entries, many companies benefit from automation provided by SAP Account Substantiation and Automation by BlackLine, journal entry option, especially if they are posting journals to a combination of SAP and non-SAP ERP systems. Accounting teams will be able to track journal completion as a part of closing task lists in SAP AFC as a part of their holistic record-to-report monitoring.

When the accounting period ends, many companies have external data sources that require account reconciliations. SAP Account Substantiation and Automation by BlackLine provides a highly automated approach that gives accountants exactly the data they need to perform the reconciliations efficiently – with a focus on the riskiest accounts. These reconciliation steps are key parts of closing – sometimes as a pre-requisite for other tasks, and sometimes as key internal controls. SAP AFC can place these reconciliations in context, triggering reconciliations as part of the larger closing task model. Status information on reconciliation performance is made available both for triggering next steps and for maintaining a central view of the close for finance managers.

SAP accounting add-ons by BlackLine provides tailored support for a particular subset of reconciliation activities, including transaction matching. The SAP Account Substantiation and Automation by BlackLine, transaction matching option gives accountants a generic matching capability that can be used to match data sets automatically, with an integrated capability to help remedy mismatches with well-documented journal entries. These matching tasks can also be a part of SAP AFC task lists.

A specific challenge companies face with multiple data sources is executing closing tasks in non-SAP systems. SAP and BlackLine are working together so that accounting teams will have visibility into the closing tasks in non-SAP systems. BlackLine plans to provide standardized integration connectors to non-SAP ERP systems for fast time-to-value, and the status information will be made visible in SAP AFC to trigger follow-on record-to-report activities.

Vision for SAP AFC across SAP ERP and non-SAP ERP financial closing activities

Regardless of where your closing activities take place, SAP Advanced Financial Closing will be the one-stop-shop for monitoring and executing an effective financial close. Since its launch as the strategic solution for the financial close, SAP has demonstrated a strong commitment and roadmap for SAP AFC creating SAP’s strategic cloud-based orchestration and intelligent automation hub for record-to-report.

Boundless Closing with SAP AFC

By leveraging intelligent technologies such as SAP Business AI, SAP Process Automation, and strong integration with SAP solution extensions by BlackLine, SAP AFC can automate repetitive tasks, reduce manual effort, and minimize the risk of errors. This enables accountants to focus on higher-value activities and provide more strategic insights to the business. With SAP AFC, organizations can achieve a faster, more accurate, and more efficient financial close – across their SAP and non-SAP landscapes, ultimately leading to better decision-making and improved financial performance.

You can learn more about SAP Advanced Financial Closing in the dedicated SAP Community group or on sap.com.