Headline: Taking Accounting to the Next Level with Universal Parallel Accounting in SAP S/4HANA
The best-run companies of tomorrow run efficiently, optimize for profitability, and build resilience while delivering their services in a sustainable way. However, we cannot deny that change is now more disruptive than ever before – especially during unprecedented times such as these.
Supply chains had to adjust overnight, businesses had to move to online sales within days, and climate change is an ever-present reality. Business leaders around the world have to transform their businesses – and they are doing so.
At SAP, our market success has its foundation in enterprise resource planning (ERP) solutions that help our customers be compliant and run at scale. This remains true with our next-generation suite of business applications that spans from finance to logistics. SAP S/4HANA leverages emerging cloud capabilities to help customers cope with business model changes that are driven by technology, sustainability, or changing customer behavior.
Best-run businesses are intelligent enterprises, and as such, they use information in innovative, effective, and sustainable ways, connecting it with execution and management. Intelligent enterprises lead from a single shared source of information with a user experience that matches the way people work. SAP S/4HANA benefits finance professionals by using flexible finance processes and eliminating data replication and redundancy.
New Sega Textile (Nantong) Co Ltd required a cutting-edge cloud ERP solution that it could roll out efficiently across their global company in order to support their growing business. As an SAP S/4HANA Cloud customer, New Sega reports a 50% reduction in budget and forecasting costs with financial planning, as well as a 20% boost in the number of automated financial postings in AR using machine learning.
Innovations in Universal Parallel Accounting
Chief financial officers (CFOs) of international companies need to provide consistent financial data reporting according to different accounting standards and currencies in parallel. To do this, they need to follow parallel accounting standards for group and local GAAP, which affect inventory valuation, work-in-progress, asset values, and so on.
Thousands of SAP customers already rely on the capabilities of SAP ERP systems to maintain multiple sets of books and in parallel to satisfy all different legal requirements of financial statement users accurately, efficiently, and effectively. SAP HANA has provided a new technology foundation that has removed technical barriers and opened up a whole host of new opportunities for companies. Based on that, SAP S/4HANA was built on a brand-new architecture with the universal journal at its center. The universal journal is our established foundation for accounting processes; it captures all financial data that had previously been distributed across multiple tables in one place. This allows for consistent parallelism across all sub-ledgers and value flows.
With the newest capabilities included in SAP S/4HANA, we are offering a solution approach that takes parallel accounting to the next level: universal parallel accounting.
A new important innovation delivered with SAP S/4HANA Cloud release 2011 is the flexible assignment of accounting principles. This means that new SAP S/4HANA Cloud customers will also benefit from a new configuration option for the flexible assignment of a local GAAP, such as the German commercial code and accounting standards (HGB), as a leading accounting principle for the group ledger. This innovation is especially beneficial for our cloud customers as it gives them a higher level of flexibility that they did not have before. Only one configuration activity is required to update the assignment of the ledger to the accounting principle throughout finance applications such as general ledger, treasury, revenue recognition, and so on.
Universal Parallel Accounting at the Core of the Intelligent Enterprise: Next Innovation Steps
On top of that, parallel valuation is the next larger innovation in finance that is planned for SAP S/4HANA in 2021 and will offer consistent and universal support of parallel accounting standards for end-to-end processes like make to stock/order and manufacturing of assets. These are now fully enabled for parallel accounting and allow the representation of different accounting principles across the whole value flow. With this, the solution will be able to valuate business processes in parallel for each required accounting principle in real time. Customers will also benefit from increased transparency and availability of real-time data, and a reduced total effort for implementation and configuration.
Looking ahead, we will continue to enhance parallel accounting by adding further use cases with the next topics on the road map to include consolidated views and alternative fiscal year variants. Consolidated views will offer customers an improved basis for decision-making and overall business steering effectiveness through increased data transparency and accuracy. In addition, the consistent support of alternative fiscal year variants offers next-level standardization alongside a lower level of workarounds and associated manual effort. Asset accounting is one example where manual effort will be significantly reduced in the context of alternative fiscal year variants.
Finance for the Digital Age
Finance professionals are increasingly moving into more strategic roles within their businesses and urgently need to advance beyond the restrictions of complex and redundant system landscapes. They need a single digital core that supports all their requirements for both transactional and analytical processes. An ERP system should be a single source of truth for the financial and operational data of a business. Data replications, reconciliations, and redundancies should be removed through process and technology simplifications while business continuity with reduced effort is guaranteed through a finance function that is powered by analytics.
Packed with innovations, SAP S/4HANA is our intelligent finance solution for the digital age that is available in cloud, on premise, and in hybrid deployment options. Running on the in-memory platform of SAP HANA, our solution provides flexible and easy-to-consume financial reporting for accounting, accounting and financial close, treasury and cash management, accounts payable and receivable, risk management, and much more. To find out more about what SAP S/4HANA can do for your business, visit SAP.com.
Jan Gilg is president of SAP S/4HANA
This story originally appeared on LinkedIn.