Part 2: SAP S/4HANA Finance powers real-time insights and streamlined workflow.
Our previous post, reflecting on a recent SAP and Illumiti presentation to Financial Executives International (FEI), entitled “Office of the CFO: Leading the Enterprise Transformation Initiative,” profiled the Office of the CFO’s unique vantage point on the business and how this translates to driving collaborative enterprise planning to ensure alignment with both financial and strategic plans. And we introduced the role of SAP S/4HANA Finance in advancing enterprise transformation.
In Part 2 of our look into the transformative role of finance, we take a closer look at the power of SAP S/4HANA Finance to deliver real-time insights and streamline workflow.
Universal Journal - Single Source of Truth
Traditional financial systems cannot support the digital enterprise. Initially there was a single GL (general ledger). Then, subledgers were added: material ledger, asset accounting. Finally, additional ledgers were added for reporting, such as management accounting and profitability analysis. This traditional approach required data to be moved between ledgers, which required reconciliation. The result is a loss of granularity, visibility, and detail. In turn, there was a loss of flexibility and replication due to aggregation. Traditional finance systems thus make it difficult to move processes to a digital economy.
With SAP S/4HANA Finance, the Universal Journal is a single table source of truth, which has eliminated the need for replications and reconciliations, and has removed the rigid reporting structures. Now all information is at the granular level, which allows flexibility and real- time analytics, moving finance from analog to digital processes.
How Work Routines Benefit
Think about how work routines can benefit from this change of data platform. Imagine a P&L statement that corresponds exactly with detailed profitability reporting, or having the ability to access asset and inventory details by drilling down instead of jumping to a separate subledger. S/4HANA is helping to reduce the repetitive tasks and freeing you and your team to do more advanced and progressive activities.
The SAP S/4HANA Finance solution transforms finance in the digital economy, including finance day-to-day operations, all the way through to treasury close operations, as well as financial planning, analysis, and enterprise risk and compliance. A fully integrated portfolio of solutions supports all roles across finance, risk, and tax. You gain an exhaustive view of your business whenever you need to make a decision, along with the power to act instantly on these insights.
S/4HANA Finance not only delivers the functional completeness across the Office of the CFO; it is a modern financial system that allows you to deploy specific capabilities that you need, based on your timeline and budget. The SAP S/4HANA system provides foundational automation and process improvements across all accounting functions, as well as embedded analytics and security. With this foundation, you can choose additional capabilities to deploy within S/4HANA across all finance, GRC (governance, risk & compliance), and cybersecurity functions.
Automation to Reduce Redundant Tasks
One ingredient to the intelligent ERP is automation, which is powered by artificial intelligence, robotic process automation, and a system that learns and adapts to user actions. Over the next three years. SAP's goal is to automate over 50% of the redundant tasks in current ERP processes.
Some of SAP's intelligent technologies supporting Office of the CFO include:
- Process and predictive analytics - allowing you to identify sweet spots for automation and predict future results
- Ready-to-use intelligent applications that natively inject intelligence into core finance processes—automating a particular process or part of the process—and are seamlessly integrated
- SAP Intelligent RPA (Robotic Process Automation) that lets you build and orchestrate your own bots, which can accelerate process automation
Let’s bring the value of automation to life with a couple of examples. The first one is Cash Application. This application automatically matches incoming payments and outstanding customer invoices. And it really is using SAP's machine learning capabilities, learning from the accountant's past manual actions. It captures much richer detail for the customer, including country-specific behavior, without the cost of manually defining detailed rules. And as the accountant fixes the anomalies that come in, the application actually learns from that. So the next time you're running that, based on this rule-based engine and intelligence, it learns from that and it will automatically do the matching.
Another great example is machine learning in relation to GR/IR (goods receipt/invoice receipt) reconciliation. When you're creating purchase orders, you have a certain number of items. Of course, you only want to match and pay with something that was actually delivered. Machine learning functionalities, or intelligent accounting, match the information in order to find any deviations in them. And if a deviation is determined, it identifies the root cause, including probability of that root cause. This increases the accuracy and efficiency of financial closing. We know in the past how arduous GR/IR could be; it saves the employees a lot of time going through different documents, finding mismatches. It therefore ultimately supports the end user in decision making.
Providing insights in real time and reducing redundancies in work routines for more efficient processes are two compelling reasons why SAP S/4HANA Finance and the Office of the CFO are poised to drive change enterprise wide.
SAP Platinum Partner Illumiti
Illumiti is an SAP Platinum Partner based in North America with a long history of implementing custom-fit SAP software solutions in over 120 countries. As a modern system integrator and management consulting firm, Illumiti leverages the power of SAP S/4HANA to help the Office of the CFO lead enterprise transformation. Experience SAP S/4HANA Finance, starting with a “Day in the Life of a Finance User” with Illumiti’s interactive tool https://illumiti.com/a-day-in-the-life-of-an-sap-user/finance-user/.