91% of CFOs say finance teams need to provide more forward looking, predictive analytics and <12% say finance teams can respond in real-time to information requests according to an SAP Performance Benchmarking study.
In today’s digital business, speed and data are the keys to staying competitive. Let’s take financial close for instance, according to SAP Value Engineering top quartile performing companies achieve financial close in 26% fewer days than their peers. This is crucial in many ways because–
i) Stakeholders need visibility into financial statements. These deadlines are not negotiable for public companies and hence can affect share value and confidence of the investor
ii) If the time taken to close books are delayed it exposes inefficiencies in the finance process due to a non-standardized, and manual process
iii) Management lack insight into profitability if there is a delay in closing the books. This, in turn, postpones important business decisions in an environment that require real-time analytics.
An early adopter of S/4 HANA Finance software, an Insurance Group from Zurich reported1000 times faster reporting from 15 minutes to 1 second. How is that a game-changer you may ask? When 15 minutes is added to each step in the close process the result is not in minutes and hours but in days. The Universal Journal (ACDOCA) significantly modifies how transactional data is stored for financial reporting and this makes it feasible to get all the dimensions required for internal and external reporting. The universal journal combines reporting dimensions from separate applications: General Ledger, Profitability Analysis, Controlling, Asset Accounting and Material Ledger to provide a unified structure for reporting that includes all relevant analytics.
There is complete flexibility in reporting without pre-defined aggregates and no data replication with real time access to the universal journal. In the single source of truth concept in the universal journal, instead of looking at data sets in multiple applications we are looking at different aggregations of the same data set.
Previous Scenario Vs Present Scenario
In traditional systems, reports are created by batch runs and reconciliation is required since information is spread across multiple tables, different details, structures, and capabilities. Analytics are available mainly at the senior level when preordered and it’s inflexible and no drill down is available. In the Finance departments of many organizations using the Legacy SAP system, there is a lack of availability of detailed financial reports and visibility into financial spend. This resulted in a lack of accurate management reporting, significant reconciliation effort, a lack of accountability and eventually a lack of executive trust in the system data.
With S/4 HANA Finance software one can look forward to a real-time analytics system with drill down to detail and ‘KPI’ cockpit, elimination of batch-end bottle necks, much lesser correction efforts with intercompany reconciliation, profitability analysis, and line-item detail reconciliation, and instantaneous, complete visibility into financial reporting.
With Finance increasingly becoming a strategic partner to business, from being the advisory for financial implications of business options, exploring diversification of business and investigating mergers and acquisitions, the real-time analytics, simulation and prediction capabilities of S/4 HANA Finance software can be an incredible benefit for multidimensional reporting.
For further queries and comments on real-time analytics and financial reporting capabilities of S/4 HANA Finance software, drop us a comment below.