October 14, 2021

How SAP Account Substantiation and Automation by BlackLine Complements SAP Treasury Management

This article originally appeared on SAP's blog. It's a 5-minute read.

In today’s dynamic business environment, business leaders need to make decisions quickly, with complete and accurate data.

Cash positioning and liquidity management are often critical areas of focus, but with complex operations, increasing sources of financial data, and high volumes of transactions, it can be a challenge for treasurers and accountants to provide the real-time visibility needed to support their businesses.

Leading treasurers and accountants are deploying technology solutions like SAP Treasury Management and SAP Account Substantiation and Automation by BlackLine to improve visibility of working capital, lower financial risk, and support the strategic needs of their business.

You may be wondering, what does SAP Treasury Management do? What is SAP Account Substantiation and Automation by BlackLine? And what are the benefits of SAP Treasury Management and SAP Account Substantiation and Automation by BlackLine?

Before we dive into these questions, lets first clarify what we mean when we say reconciliation vs. substantiation as there is a subtle—yet important—distinction between the two that is helpful in understanding the solutions.

Reconciliation vs Substantiation

Reconciliation is when there are two different sources of information moving at a different pace, and at any point in time, those two sides must be matched up. Its purpose is to ensure all balances or transactional data are in both systems, identifying exceptions needing follow up. This can cause confusion because when it comes to the financial close, the term reconciliation is typically used in reference to substantiation.

Substantiation is more comprehensive, as it involves multiple processes including reconciliation to underlying systems, providing supporting documentation, and explaining the key components of the account balance, as well as validation of the completeness and accuracy of the ending balance.

To read more about this topic and the distinction between reconciliation and substantiation, refer to this blog post.

SAP Treasury Management  

Treasury teams need to manage their daily cash operations and be strategic advisors to their business partners. They need to be able to answer questions like, what is our cash position? Do we have enough cash? How does the timing of this payment impact our working capital position? What is our foreign currency exposure? Do we need to adjust our hedge positioning?

To inform these decisions, Treasurers rely on daily cash positions and cash flow forecasts. SAP Treasury Management solutions enable full cash visibility with seamless processes from multiple sources of data including banks, trading platforms, market rate sources, and other data sources. The solution reconciles information between these data sources and the ERP, so Treasurers are using complete and accurate data to inform their decisions.

SAP Treasury Management solutions also allow users to simulate what-if scenarios, build projections on future scenarios, and review significant KPI’s and other critical information organized in dashboards.

SAP Account Substantiation and Automation by BlackLine

Accountants are also responsible for reporting on cash and other items managed by Treasury. However, unlike Treasurers who are responsible for the daily cash operations, accountants are often looking at this information as a piece of the company’s financial position as of the period-end date or for a certain period.

For accountants to produce these figures, they must complete the balance sheet substantiation process as a part of the financial close. They need to validate the accuracy and completeness of the balances. This work is traditionally performed manually, outside of the ERP, often in spreadsheets, which can often take too long and introduces unnecessary risk.

SAP Account Substantiation and Automation by BlackLine helps to transform the balance sheet substantiation process in a centralized cloud solution. The BlackLine solution uses standardized templates, intelligent workflows, and built-in segregation of duties to automate much of the manual work and becomes the global repository for the substantiation process.

The BlackLine solution has a template designed specifically for bank account substantiation. The template automates the reconciliation of data from various sources, can create reconciling items such as interest or bank fees, and allows for the substantiation of all cash accounts in a single cloud solution.

The BlackLine solution enables a more efficient way to substantiate all your company’s cash accounts with increased visibility, reduced risk, and strengthened financial control. In addition, the BlackLine Solution complements the SAP Electronic Bank Statement process, by automating a seamless end-to-end process.

The Benefits of SAP Treasury Management & SAP Account Substantiation and Automation by BlackLine

There are distinct benefits to both solutions. While both solutions provide benefits to cash management, SAP Treasury Management provides treasurers with solutions needed to manage their daily cash operations, whereas SAP Account Substantiation and Automation by BlackLine provides accountants with solutions needed to manage the financial close, inclusive of cash.  

Both SAP Treasury Management and SAP Account Substantiation and Automation by BlackLine enable treasurers and accountants with greater transparency, visibility, and control. Together, they are a powerful end-to-end offering that supports your businesses cash management needs and other strategic initiatives.

To learn more and request a demo, visit our SAP Treasury Management and SAP Account Substantiation and Automation by BlackLine pages.

Molly Boyle & Elizabeth Milne

Digital Transformation