Especially during the last few years, we have all witnessed that change is a constant in the world we live in. Particularly for finance professionals, this means they play a key role in
With the latest S/4HANA Cloud release, we have added an extensive list of key innovations to support finance professionals in addressing these challenges. Let’s have a brief look at all finance relevant processes as a starting point for our overview.
OVERVIEW VIDEO
https://www.youtube.com/watch?v=eTjVJqXJahg&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=1
While we can’t possibly address each innovation delivered across the different processes shown for our different SAP S/4HANA deployment options, we’ll focus on some which we believe are key.
Enabling group-wide business steering
Let me start with the area of financial planning & analysis, where focus is on enabling group-wide business steering in the best possible way, leveraging the combined power of SAP S/4HANA Cloud and SAP Analytics Cloud. Through increased integration on the level of consolidated planning – which particularly looks at the touchpoints between SAC Planning and SAP S/4HANA for Group Reporting as well as the integration of Predictive Analytics – delivered with SAC – and Predictive Accounting – which sits in the core S/4 environment.
PREDICTIVE LIQUIDITY FORECAST leveraging SAP Analytics Cloud Predictive Analytics
As agility is key, not only in the way we plan and simulate, but also in terms of enabling a fast time to value of a solution, we also heavily invested in extending our pre-delivered planning and simulation content. Not only by adding additional processes and connecting financial planning to sales planning (on top of the supply chain and workforce content integration which was already available before), but also by leveraging applied prediction, resulting in – amongst others – an out of the box predictive liquidity forecast. As we are leveraging the smart prediction capabilities delivered, this also comes with the advantage of allowing finance users to get insights and influence the way the predictive model works.
Across the FP&A and Record-to-report process, we find a second, very fundamental innovation of SAP S/4HANA Cloud: the ledger-based approach to deal with multiple accounting principles, not only harmonising the way we deal with multiple valuation view across different areas including inventory accounting, assets and so on, but enabling a more timely and increased transparency in your global value chains. A specific video dealing with this innovation known as “Universal Parallel Accounting” is available.
UNIVERSAL PARALLEL ACCOUNTING VIDEO
https://www.youtube.com/watch?v=dw7icVpu6lo&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=2
Towards autonomous, event-based processing
Moving on with the record-to-report process, universal parallel accounting is one of the key pieces in the evolution towards autonomous, event-based processing. In conjunction with the introduction of event-based processing and, linked to this, the support of event-based revenue recognition for more and more business scenarios.
Making, amongst others, the financial closing process more event-based and ultimately touchless also has driven the delivery of additional intelligent automation cases. Both on entity and group level. And both for stand-alone as well as central finance setups. Examples include augmented posting rules to automate consolidation of investments on one end, but also central accruals management and enhanced RPA error resolution. Latest innovations provided by SAP S/4HANA for Advanced Financial Closing ensures that all tasks are fully orchestrated and monitored.
ADVANCED FINANCIAL CLOSING VIDEO
https://www.youtube.com/watch?v=vCcA3I_sg8k&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=6
Flexible extensibility of the underlying business foundation, our single financial truth, also adds to increased process efficiency. One example I’d like to mention is the inclusion of the consolidation unit master data into the group ledger… delivering on-the-fly consolidation capabilities without the need for data movements. A complete overview of innovations in the area of SAP S/4HANA Cloud for Group Reporting can be found in this video:
GROUP REPORTING VIDEO
https://www.youtube.com/watch?v=BznGGL3Jklo&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=3
Linking SAP’s powerful business foundation back to business transformation we started from at the start of this blog brings up a requirement many companies share: the need to manage organisational changes. Providing profit center reorganisation is an important innovation in dealing with organisational flexibility. This comes in addition to global hierarchies that include time dependency features which have been around since a while already.
Delivering the single financial truth to the end-user can be done in different forms. There’s been a lot of focus on analysis flexibility making use of both the embedded analytical capabilities in S/4HANA Cloud as well as SAC. But the need to guide causal users along a progressive analysis path in interactively providing answers to predefined business questions has led to what we call “review booklets”. Initially delivered within the context of group reporting but planned to be rolled out to support sales accountants in performing margin analysis as well.
REVIEW BOOKLET for Margin Analysis
Optimizing working capital
Shifting our focus to the area of financial operations and the optimization of your working capital, we get to the innovations delivered in the area of payables, receivables and treasury management. Have a look at the video dealing with the overall topic of Working Capital Management to get an initial view on innovations in this space.
WORKING CAPITAL MANAGEMENT VIDEO
https://www.youtube.com/watch?v=cMH82UvXXQo&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=7
A significant evolution impacting especially receivables and the closely related area of payment management and bank communication is the rise of subscription and service-based business models. The update on Billing and Revenue Innovation Management tackles with important added capabilities supporting these new business models. From managing the contract lifecycle, entitlement management and managing disputes for convergent invoicing up to payment processes. To better support our customers business transformation, see which concrete use cases are supported based on SAP cloud technology. You can learn more about this in the dedicated video referred to here:
BILLING & REVENUE INNOVATION MANAGEMENT VIDEO
https://www.youtube.com/watch?v=-BXQmi2xQSg&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=6
The invoice to cash process is the centerpiece of every company, no matter which size, industry, or location. Given its potential to free up money tied up in doubtful customer accounts and unclarified customer claims, companies are well advised to maximize process improvements as much as possible. Therefore, SAP has made tremendous effort to provide a higher degree of automation and reduce the manual workload in cash collection processes. With the latest release of SAP S/4HANA Cloud a series of innovations have been added, helping organisations to manage customer credit and process dispute & collections more efficiently. More details on this are available here:
RECEIVABLES MANAGEMENT VIDEO
https://www.youtube.com/watch?v=WQHyWc0LLS8&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=4
With the aim to enhance payment factory efficiency, we have added cloud based inhouse banking as an integral part of our advanced payment management capacity, allowing you to create an internal bank on corporate level. Within this internal bank, subsidiaries that are part of the group can open or maintain internal bank accounts. From the subsidiary perspective, these accounts are house bank accounts and can be used in the same way as the external house bank accounts. This allows you to settle intercompany payments without using cash, save bank connectivity and handling costs and monitor all payments centrally. More about this and other treasury capabilities in this video:
TREASURY MANAGEMENT VIDEO
https://www.youtube.com/watch?v=Q4aw3XtlghQ
In trying to optimize the working capital situation beyond even further, also from the payables side, let me refer to the Taulia solution which is highly specialised in managing payables financing. This is one of the topics dealt with in the following video:
FINANCIAL OPERATIONS AND TAULIA VIDEO
https://www.youtube.com/watch?v=bUJ3Mna_Zz8&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=10
Risk adjusted management
When starting this overview, we first moved into the steering and insights area, moving on to link this to process efficiency improvements delivered with SAP S/4HANA Cloud. Now let’s focus on how to assure the value which is created for your company is protected. Or in other words: Risk management & compliance.
Rather than managing compliance, including tax and international trade standalone, our view is to embed these into the operational process, enabling scaleable and traceable trade, tax and compliance to respond fast to rapidly emerging mandates. That’s where innovations like flexible master data transfer to SAP global trade services on the trade side, but also tax-related controls with financial compliance management come into play.
On top, the ability to trace manual adjustment for withholding tax items, automated certificates, registration for indirect taxation abroad are just some of the indirect tax specific innovations. These and other innovation in the space of tax and international trade is an important area for SAP to enable organisations across the world to address the continuously evolving requirements.
With the evolution of document and reporting compliance (which is the combination of SAP Advanced Compliance Reporting and SAP Document Compliance), providing electronic output enhancements but also expanding in the area of subscription businesses, broader legal reporting matters are addressed.
DOCUMENT AND REPORTING COMPLIANCE VIDEO
https://www.youtube.com/watch?v=rR6RB7NkDfk
Document and reporting compliance, combined with the evolution of the core S/4 environment and financial compliance management have an important role from the compliance side to sustainability.
Double clicking on financial compliance management, we not only extended baseline content to be used out-of-the-box… including tax … but also invested in tasks and task list templates, including workflow based follow up actions to enable organisations to move from a sole reporting and monitoring risk & compliance approach towards actionability. This also applies to the area of privacy governance by introducing risk response planning to reduce probability or impact of potential risks.
Providing Risk adjusted management not only serves an integrated audit, compliance, and risk approach, but embeds risk into the core decision making process as well. This can nicely be illustrated by looking at the available integrated digital boardroom
Digital Boardroom illustrating risk integration into the decision making process
To conclude
As you can see, these – and other - innovations delivered with SAP S/4HANA Cloud Public Edition 2208 and S/4HANA Cloud Private Edition 2022 are instrumental to empower CFO and her or his team through our modular business steering platform combining analytics, prediction and risk,
enabling reimagined processes leveraging intelligent technologiesSupporting industries’ agile transformation of their go to market & supply chain based on a unique business foundation, sustainably & resiliently, thanks to the Cloud.
- Transforming their business in a financially viable & risk-adjusted way
- Ensuring complete transparency and optimisation in how and where value is created through their global supply chain, while keeping a close look at tax and trade regulations
- While putting everything in the perspective of the sustainability outcomes are set by their organisation.
With the latest S/4HANA Cloud release, we have added an extensive list of key innovations to support finance professionals in addressing these challenges. Let’s have a brief look at all finance relevant processes as a starting point for our overview.
OVERVIEW VIDEO
https://www.youtube.com/watch?v=eTjVJqXJahg&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=1
While we can’t possibly address each innovation delivered across the different processes shown for our different SAP S/4HANA deployment options, we’ll focus on some which we believe are key.
Enabling group-wide business steering
Let me start with the area of financial planning & analysis, where focus is on enabling group-wide business steering in the best possible way, leveraging the combined power of SAP S/4HANA Cloud and SAP Analytics Cloud. Through increased integration on the level of consolidated planning – which particularly looks at the touchpoints between SAC Planning and SAP S/4HANA for Group Reporting as well as the integration of Predictive Analytics – delivered with SAC – and Predictive Accounting – which sits in the core S/4 environment.
PREDICTIVE LIQUIDITY FORECAST leveraging SAP Analytics Cloud Predictive Analytics
As agility is key, not only in the way we plan and simulate, but also in terms of enabling a fast time to value of a solution, we also heavily invested in extending our pre-delivered planning and simulation content. Not only by adding additional processes and connecting financial planning to sales planning (on top of the supply chain and workforce content integration which was already available before), but also by leveraging applied prediction, resulting in – amongst others – an out of the box predictive liquidity forecast. As we are leveraging the smart prediction capabilities delivered, this also comes with the advantage of allowing finance users to get insights and influence the way the predictive model works.
Across the FP&A and Record-to-report process, we find a second, very fundamental innovation of SAP S/4HANA Cloud: the ledger-based approach to deal with multiple accounting principles, not only harmonising the way we deal with multiple valuation view across different areas including inventory accounting, assets and so on, but enabling a more timely and increased transparency in your global value chains. A specific video dealing with this innovation known as “Universal Parallel Accounting” is available.
UNIVERSAL PARALLEL ACCOUNTING VIDEO
https://www.youtube.com/watch?v=dw7icVpu6lo&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=2
Towards autonomous, event-based processing
Moving on with the record-to-report process, universal parallel accounting is one of the key pieces in the evolution towards autonomous, event-based processing. In conjunction with the introduction of event-based processing and, linked to this, the support of event-based revenue recognition for more and more business scenarios.
Making, amongst others, the financial closing process more event-based and ultimately touchless also has driven the delivery of additional intelligent automation cases. Both on entity and group level. And both for stand-alone as well as central finance setups. Examples include augmented posting rules to automate consolidation of investments on one end, but also central accruals management and enhanced RPA error resolution. Latest innovations provided by SAP S/4HANA for Advanced Financial Closing ensures that all tasks are fully orchestrated and monitored.
ADVANCED FINANCIAL CLOSING VIDEO
https://www.youtube.com/watch?v=vCcA3I_sg8k&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=6
Flexible extensibility of the underlying business foundation, our single financial truth, also adds to increased process efficiency. One example I’d like to mention is the inclusion of the consolidation unit master data into the group ledger… delivering on-the-fly consolidation capabilities without the need for data movements. A complete overview of innovations in the area of SAP S/4HANA Cloud for Group Reporting can be found in this video:
GROUP REPORTING VIDEO
https://www.youtube.com/watch?v=BznGGL3Jklo&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=3
Linking SAP’s powerful business foundation back to business transformation we started from at the start of this blog brings up a requirement many companies share: the need to manage organisational changes. Providing profit center reorganisation is an important innovation in dealing with organisational flexibility. This comes in addition to global hierarchies that include time dependency features which have been around since a while already.
Delivering the single financial truth to the end-user can be done in different forms. There’s been a lot of focus on analysis flexibility making use of both the embedded analytical capabilities in S/4HANA Cloud as well as SAC. But the need to guide causal users along a progressive analysis path in interactively providing answers to predefined business questions has led to what we call “review booklets”. Initially delivered within the context of group reporting but planned to be rolled out to support sales accountants in performing margin analysis as well.
REVIEW BOOKLET for Margin Analysis
Optimizing working capital
Shifting our focus to the area of financial operations and the optimization of your working capital, we get to the innovations delivered in the area of payables, receivables and treasury management. Have a look at the video dealing with the overall topic of Working Capital Management to get an initial view on innovations in this space.
WORKING CAPITAL MANAGEMENT VIDEO
https://www.youtube.com/watch?v=cMH82UvXXQo&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=7
A significant evolution impacting especially receivables and the closely related area of payment management and bank communication is the rise of subscription and service-based business models. The update on Billing and Revenue Innovation Management tackles with important added capabilities supporting these new business models. From managing the contract lifecycle, entitlement management and managing disputes for convergent invoicing up to payment processes. To better support our customers business transformation, see which concrete use cases are supported based on SAP cloud technology. You can learn more about this in the dedicated video referred to here:
BILLING & REVENUE INNOVATION MANAGEMENT VIDEO
https://www.youtube.com/watch?v=-BXQmi2xQSg&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=6
The invoice to cash process is the centerpiece of every company, no matter which size, industry, or location. Given its potential to free up money tied up in doubtful customer accounts and unclarified customer claims, companies are well advised to maximize process improvements as much as possible. Therefore, SAP has made tremendous effort to provide a higher degree of automation and reduce the manual workload in cash collection processes. With the latest release of SAP S/4HANA Cloud a series of innovations have been added, helping organisations to manage customer credit and process dispute & collections more efficiently. More details on this are available here:
RECEIVABLES MANAGEMENT VIDEO
https://www.youtube.com/watch?v=WQHyWc0LLS8&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=4
With the aim to enhance payment factory efficiency, we have added cloud based inhouse banking as an integral part of our advanced payment management capacity, allowing you to create an internal bank on corporate level. Within this internal bank, subsidiaries that are part of the group can open or maintain internal bank accounts. From the subsidiary perspective, these accounts are house bank accounts and can be used in the same way as the external house bank accounts. This allows you to settle intercompany payments without using cash, save bank connectivity and handling costs and monitor all payments centrally. More about this and other treasury capabilities in this video:
TREASURY MANAGEMENT VIDEO
https://www.youtube.com/watch?v=Q4aw3XtlghQ
In trying to optimize the working capital situation beyond even further, also from the payables side, let me refer to the Taulia solution which is highly specialised in managing payables financing. This is one of the topics dealt with in the following video:
FINANCIAL OPERATIONS AND TAULIA VIDEO
https://www.youtube.com/watch?v=bUJ3Mna_Zz8&list=PL3ZRUb1AKkpSPH75Y8IMLoGIhcPdw63G5&index=10
Risk adjusted management
When starting this overview, we first moved into the steering and insights area, moving on to link this to process efficiency improvements delivered with SAP S/4HANA Cloud. Now let’s focus on how to assure the value which is created for your company is protected. Or in other words: Risk management & compliance.
Rather than managing compliance, including tax and international trade standalone, our view is to embed these into the operational process, enabling scaleable and traceable trade, tax and compliance to respond fast to rapidly emerging mandates. That’s where innovations like flexible master data transfer to SAP global trade services on the trade side, but also tax-related controls with financial compliance management come into play.
On top, the ability to trace manual adjustment for withholding tax items, automated certificates, registration for indirect taxation abroad are just some of the indirect tax specific innovations. These and other innovation in the space of tax and international trade is an important area for SAP to enable organisations across the world to address the continuously evolving requirements.
With the evolution of document and reporting compliance (which is the combination of SAP Advanced Compliance Reporting and SAP Document Compliance), providing electronic output enhancements but also expanding in the area of subscription businesses, broader legal reporting matters are addressed.
DOCUMENT AND REPORTING COMPLIANCE VIDEO
https://www.youtube.com/watch?v=rR6RB7NkDfk
Document and reporting compliance, combined with the evolution of the core S/4 environment and financial compliance management have an important role from the compliance side to sustainability.
Double clicking on financial compliance management, we not only extended baseline content to be used out-of-the-box… including tax … but also invested in tasks and task list templates, including workflow based follow up actions to enable organisations to move from a sole reporting and monitoring risk & compliance approach towards actionability. This also applies to the area of privacy governance by introducing risk response planning to reduce probability or impact of potential risks.
Providing Risk adjusted management not only serves an integrated audit, compliance, and risk approach, but embeds risk into the core decision making process as well. This can nicely be illustrated by looking at the available integrated digital boardroom
Digital Boardroom illustrating risk integration into the decision making process
To conclude
As you can see, these – and other - innovations delivered with SAP S/4HANA Cloud Public Edition 2208 and S/4HANA Cloud Private Edition 2022 are instrumental to empower CFO and her or his team through our modular business steering platform combining analytics, prediction and risk,
enabling reimagined processes leveraging intelligent technologiesSupporting industries’ agile transformation of their go to market & supply chain based on a unique business foundation, sustainably & resiliently, thanks to the Cloud.
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