This article originally appeared in SAP Digitalist, and is Part 3 of this blog series.
In our last blog post, we talked about the benefits of the Universal Journal—the architecture of SAP S/4HANA. In that post, we focused on how the Universal Journal eliminates certain intra-ERP reconciliations that were previously needed in legacy SAP environments, like SAP ECC.
Let’s expand upon that discussion and address the
Universal Journal as it relates to journal entry management. Specifically,
let’s break down what this means for the journal entry functionality offered by
SAP Account Reconciliation and Automation by BlackLine.
Ironic? Universal Journal Doesn’t Prepare Journal Entries
While SAP S/4HANA comes with
basic capabilities for journal entries, many wonder what value SAP Account Reconciliation and
Automation by BlackLine adds to an SAP ERP.
As discussed in our earlier blog post, the Universal Journal is a simplification
of the table structure within SAP’s ERP system. Now, rather than multiple
tables that need to be reconciled to one another, SAP S/4HANA delivers one
Universal Journal that stores all your data.
While the benefits of the simplified design are immense,
the Universal Journal itself does not prepare or process transactions prior to
posting. Further, it doesn’t eliminate the need to record, support, and approve
manual journal entries.
Can Only Automate So Much
It would be wonderful if SAP S/4HANA could automate
everything. But the concept of a truly lights out financial close is not likely
Can new technologies like predictive analytics and machine
learning transform the way Finance works? Sure. Can certain journal entries be
automated by the SAP ERP? Absolutely. But accounting professionals are still
critical to accuracy and compliance.
Among complexities, the nature of accrual-based accounting—a
core principle of US GAAP, IFRS, and other accounting standards—necessitates
companies to recognize revenues and expenses when they’re earned to derive a
true and fair picture of the financial statements.
Even the most sophisticated ERP is not capable of
capturing all business transactions properly, without needing adjustments for
compliance and reporting.
Most of Your Manual Entries
When journal entries are needed, organizations running SAP
have several options for managing the process. Can entries be posted directly
in SAP? Of course. Does SAP offer standard workflow for manual journal entries?
SAP ECC customers have Park and Post functionality with workflow
routing to approvers and adding supporting documents. In SAP S/4HANA, customers
have additional functionality, such as upload from spreadsheet and the ability
to verify Journal Entries with workflow.
This raises two questions:
- What does SAP Account Reconciliation and Automation by BlackLine
bring to the table?
- Why would I need an additional solution if I can post
journals in SAP and I already have SAP S/4HANA?
The answer is this: SAP Account Reconciliation and
Automation by BlackLine brings extended functionality to the SAP ERP by adding
automation opportunities, business-managed intelligent workflow, a complete
audit trail, and integration with related month-end processes like balance
Like ending balances, journal entries are often a focus
area for auditors. Document type and other fields within SAP are useful for
narrowing down the population of journal entries.
However, SAP Account Reconciliation and Automation by BlackLine
can easily isolate the full population of manual entries with related
substantiation and approvals built-in—adding value and simplifying the audit
Across Multiple ERPs
Another benefit to having the journal entry functionality
is that SAP Account Reconciliation and Automation by BlackLine is process
Many organizations don’t yet have the luxury of a single
instance of SAP S/4HANA. This means journal entries are likely posted in many
disparate source systems. The processes and controls around preparation,
review, and substantiation are difficult to standardize in a heterogenous
SAP Account Reconciliation and Automation by BlackLine
makes it easy by allowing all manual journal entries to originate in its cloud
Journal entry fields for each ERP are built into the solution
and approved. Substantiated entries are then posted directly to the local
systems through secure connectors. Real-time feedback and validation are also
available, and as the ERP landscape evolves, updates can be made quickly in SAP
Account Reconciliation and Automation by BlackLine–little to no IT time needed.
An End-to-End Solution
With SAP S/4HANA, companies get a world-class ERP platform
and an opportunity to simplify finance master data with the Universal Journal.
With SAP Account Reconciliation and Automation by BlackLine, customers get an
additional opportunity to improve the month-end close.
Meet with BlackLine at SAPPHIRENOW to learn more about how your accounting organization can benefit from using SAP and BlackLine, together.
The post Universal Journal & Journal Entry Functionality in SAP & Automation by BlackLine Explained appeared first on BlackLine Magazine.