Part 7 of our Finance Transformation blog series. Read the full series here.
Many month-end close activities are designed to ensure accuracy and support the control environment. But when these processes are performed manually, it increases the risk of error and consumes valuable time.
The Universal Journal, a relatively new feature from SAP, consolidates transactional data previously stored in multiple tables into one large table. It covers the GL, subledgers including AP and AR, fixed assets, and controlling tables such as cost center, project, and internal order data.
The Universal Journal has been touted for its ability to reduce or eliminate the need to perform certain reconciliations. While this is true and of significant value to users of the functionality, the Universal Journal only address a small component of the total population of reconciliations accountants need to perform.
Specifically, data may no longer need to be traced between tables or sources within SAP, but accounting and finance teams still need to substantiate all balance sheet accounts and perform other critical reconciliations activities involving data outside of the ERP.
BlackLine has partnered with SAP to deliver elevated control and automation to accounting and finance departments worldwide, enabling teams to maximize the value from their SAP investments.
BlackLine solutions add value throughout the SAP journey, from R3 to S/4HANA, especially in the following use cases:
- Balance Sheet Substantiation
- High-Volume Transactions
- Journal Entry Processing
- Intercompany Accounting
The next four blogs in this series will explore each of these use cases, and take a deeper dive into how BlackLine complements SAP. We’ll look at how both solutions work together to improve the lives of the end users, both professionally and personally, beginning with balance sheet substantiation.
A Proactive Approach to Reducing Risk
Balance sheet substantiation is more than just tying a balance to a data source. The account balance substantiation process must provide reasonable assurance of the accuracy of financial data at a specific point in time. Analysis and corroboration is required to substantiate, an exercise that goes beyond basic “ticking and tying.”
SAP S/4HANA and the Universal Journal have come a long way in helping to eliminate some redundancies and certain reconciliations, like tracing data between tables, that would previously have been done manually. But these reconciliations are a small subset of overall substantiation process, which is a critical requirement of companies under SOX 404.
SAP does not have its own solution to addresses balance sheet substantiation, and they have partnered with BlackLine to deliver our industry-leading solution for this use case.
BlackLine facilitates the balance sheet substantiation process by seamlessly importing information from your general ledger sources—whether that’s one instance of SAP globally, multiple versions or instances of SAP, or multiple ERPs.
BlackLine centralizes the data in one platform and provides standardized templates, automated workflow, thresholds, and other functionalities that modernize what used to be done manually.
This level of automation is helping companies all over the world prevent and avoid a lot of risk. Not just because they have visibility into what’s on their balance sheet, but also because they can now identify errors and required adjustments, and report on these in a timely manner.
This allows teams to take a proactive approach, preventing errors resulting from late adjustments or restatements, because of the real-time visibility.
Your ERP system(s) will continue to serve as your general ledger and system of record. BlackLine receives information from SAP, and other ERPs when relevant, in a complete and seamless fashion, and modernizes the balance sheet substantiation process, eliminating the risks and burdens of legacy, spreadsheet-driven processes.
BlackLine is purpose-built to automate traditionally manual financial close processes, and complements even the most innovative functionality provided by SAP.
The next blog in this series will discuss how BlackLine, coupled with the SAP Connector, provides a unique solution for the challenges of matching and reconciling a high volume of transactions.
Read this white paper for an in-depth look at all four use cases, and to learn more about the complementary capabilities of BlackLine and SAP.