This article originally appeared in SAP Digitalist, and is Part 2 of this blog series. Read Part 1 first.

If you’ve explored the capabilities of SAP S/4HANA, you’ve
probably heard that one of its benefits is the elimination of
reconciliations. 

If you’ve seen this and are also evaluating Solution
Extensions by BlackLine for the financial close, you may be wondering whether companies
running SAP S/4HANA would need SAP Account Reconciliation and Automation by
BlackLine.

The answer is yes. SAP Account Reconciliation and
Automation by BlackLine complements even the most sophisticated SAP solutions
like SAP S/4HANA.

Universal
Journal & Reconciliations

SAP S/4HANA simplifies the ERP architecture with the
Universal Journal, a table also known as ACDOCA. Specifically, data that was
spread and stored across multiple tables, including subledgers and totals
tables, has now converged.

The Universal Journal leverages the power of SAP HANA to
store all finance transaction data in this single universal journal table,
making SAP S/4HANA a truly powerful financial system.

Previously, this SAP ERP design resulted in the need to
reconcile data between these tables to ensure it was not out of sync. For
example, subledgers needed to be reconciled to the general ledger. These
reconciliations were typically performed manually by Accounting and Finance and
were a critical part of month-end activities.  

With the single table architecture, SAP S/4HANA eliminates
the need to tick and tie or reconcile data within
the ERP.

Reconciliation
vs. Substantiation

While SAP S/4HANA’s reconciliation benefits are
noteworthy, the term “reconciliation” can create confusion.

When it comes to the financial close, the term
reconciliation is typically used in reference to substantiation. When it comes to the balance sheet, companies are
required to substantiate their results as of a point in time, typically at
month-end or quarter-end.  

Substantiation involves multiple processes, including
reconciliation to underlying systems, as well as validation of the completeness and accuracy of the ending
balance,
which involves more than simply agreeing information within the
ERP.

Substantiation is the confirmation that an ending balance
is appropriate, and more often than not, it requires corroborating information
in the general ledger with supporting documentation from outside of the general
ledger such as invoices, contracts, or schedules.

Auditors rely heavily on balance sheet substantiation
activities to support their activities and opinion. In addition, certification
and approval of substantiated account balances satisfies key control
considerations under the US Sarbanes Oxley regulations, SOX 404.   

SAP Account Reconciliation & Automation by BlackLine

SAP Account Reconciliation and Automation by BlackLine transforms
the balance sheet substantiation process.

Without such a solution, many accounting teams, including
those running SAP S/4HANA, rely on a spreadsheet-heavy approach. They struggle
with the manual workload at month-end and the painful audit processes that
follow. Quality, consistency, and visibility to errors are other common
concerns.

SAP provides reports to select the Line items. Neither SAP
ECC or SAP S/4HANA are designed to orchestrate, perform, document and audit the
sign-off process for these line items. And this is why SAP has chosen to partner with
BlackLine
for this solution.

SAP Account Reconciliation and Automation by BlackLine
helps automate this end-to-end process by providing configurable rules,
auto-certification, and checks. It provides assurance to accountants with workflow
guidance, transparent tasks, and balance thresholds.

Finally, it provides security with sign-offs and
integrated documentation to effectively prepare for audit, which is also
streamlined with this solution. Rather than manually walking through items with
auditors, you can provide read-only access so your auditors can self-serve some
of their audit requirements.

Your SAP ERP—whether ECC or S/4HANA—will provide details
from the general ledger. BlackLine solutions complement your ERP by providing
visibility, standardization, automation, and consistency to a critical
component of the financial close.

Meet with BlackLine at
SAPPHIRENOW
 to learn more about how your accounting
organization can streamline the end-to-end financial close.


The post How SAP Account Reconciliation & Automation by BlackLine Complements SAP S/4HANA appeared first on BlackLine Magazine.