Breaking new ground in corporate reporting

Ever more often, ever faster and ever more information – that has long been the credo of reporting. For both external accounting and internal management reporting, systems are therefore required that can deliver the required key figures flexibly, transparently and automatically. However, many companies are still working with software solutions that are no longer up to the new requirements and whose maintenance the manufacturers will therefore end in the foreseeable future: SAP Financial Consolidation, for example. It is therefore important to look out for a suitable successor system and to tackle the change in good time.

von Patrik Monz, CALEO Consulting

Dhe consolidated financial statements are a legal obligation for companies, but at the same time reporting also offers the opportunity to convince partners, investors and customers of the financial situation and to win them over. In addition, comprehensive reporting also facilitates internal decision-making processes. However, the requirements for reporting have increased significantly in recent years: Reports are no longer expected at cyclical, fixed dates, but analyzes and forecasts are increasingly required ad hoc – for example, when important operational or strategic decisions are made in corporate planning Need to become. However, the quality of the data must not suffer as a result of the rapid availability of the data, quite the opposite. As many data sources as possible should be taken into account, the consolidation processing should be automatic but also easy to understand.

Discontinuation of SAP Financial Consolidation

Ideally, companies therefore work with highly integrated software that includes both a data model for actual reporting and for planning, and offers powerful functions for consolidation and reporting. Companies worldwide have been using SAP’s consolidation products for this for years, including SAP Financial Consolidation (SAP FC) and Strategic Enterprise Management – Business Consolidation (SEM-BCS). The problem with this: SAP now offers more modern solutions and terminated SAP Financial Consulting at the end of 2027 – the mainstream maintenance for SEM-BSC also expires at the end of 2027. A risk-free operation of these solutions is then no longer guaranteed.

However, it is not advisable to wait until then before switching to another software – because the introduction of a new solution can take up to two years, depending on the complexity of the accounting and reporting requirements.

In order to minimize the risk of being left with unmaintained software or being unable to make the changeover on time shortly before closing time, it makes sense to switch to the successor system now.”

– especially since companies can already benefit from additional functionalities by switching to modern software for group reporting. S/4HANA for Group Reporting is the successor solution that not only includes the strengths of SAP Financial Consolidation, but even goes beyond it in terms of integration with accounting and controlling. Changing the system therefore offers companies the opportunity for modern group reporting that meets the increasing requirements.

The successor system picks up on the strengths of Financial Consolidation

Like SAP FC, S/4HANA for Group Reporting offers intuitive, definable posting logic as well as automated and easily traceable consolidation processing. The system can therefore be tailored to the company and its reporting, and the reporting of all group companies can be combined into a meaningful consolidated financial statement. Alternative consolidations can be mapped efficiently for simulations, so that companies can react quickly and flexibly to changes in exchange rates or reorganizations, for example. The data required for reporting can be adopted in a variety of ways, from automatic integration to web-based data collection. Diverse data sources and pre-systems can be efficiently connected and used in this way. The data is also available for further evaluations and can be exported. Reporting is carried out comprehensively with the system and also includes the automatic determination of the necessary key figures.

Conceptually, Group Reporting shows a certain similarity to SAP FC in some areas and is therefore the ideal successor for those who are already working with SAP FC. Migration tools are provided to make the transition easier. However, it should be noted that they primarily enable the transfer of transaction data between Financial Consolidation and Group Reporting.

The transfer of the booking logic is not supported by the tools and must be done in a different way. In order to manage the migration to Group Reporting, comprehensive knowledge of SAP FC is a mandatory requirement.”

Management consultancies specializing in the areas of enterprise performance management and business intelligence can provide significant support with the migration and ensure that it runs smoothly.

BCS/4HANA as a direct successor to SEM-BCS with an extended range of functions

In addition to S/4HANA for Group Reporting, SAP has another product for group reporting in its portfolio: The BCS/4HANA solution is suitable for companies for which group reporting does not offer sufficient added value, and especially for those who have been working with SEM-BCS up to now especially. Because it expands the range of services of the predecessor, but is essentially based on the familiar concepts. Companies therefore do not have to familiarize themselves with a completely new system and at the same time benefit from additional functions.

Autor Patrik Monz, CALEO

After studying mechanical engineering at the University of Kaiserslautern and Michigan State University Patrik Monz worked for Accenture for six years as a project manager and consultant in the field of consolidated financial statements and corporate planning. In 2002 he became self-employed and founded CALEO Consulting GmbH (website), where, as managing director and shareholder, he has specialized in the topic of SAP S/4HANA for Group Reporting. He has extensive knowledge of all relevant SAP consolidation products. He is currently leading the implementation project of the new SAP solution for group reporting at a German M-DAX company.

The new functionalities cover all product areas, from administration and user-friendliness to data transfer and the consolidation process to evaluations and reporting. Like SEM-BCS, the solution offers powerful and at the same time flexible customizing, expandability of the programmed posting logic and efficient processing of the consolidated financial statements. For example, it is possible to freely define the report content. This enables external and internal reporting that is completely adapted to the company’s own requirements.

The extended functionalities of BCS/4HANA are no longer available in the original version SEM-BCS. In order to be able to use them, companies must license BCS/4HANA separately. Companies that have already set up applications for consolidation and group reporting with SEM-BCS in the past can use the new license to protect their investments. In addition to the extended scope of services of BCS/4HANA compared to SEM-BCS, companies also benefit from the migration to BW/4HANA as a strategic data warehouse solution from SAP.

View system change as an opportunity

Companies should not see the change in the system for group reporting as a nuisance that arises because maintenance for the previous system will be discontinued in the foreseeable future or certain functionalities will not be provided in the software currently used. Rather, the switch is also an opportunity to benefit from the technical developments that raise reporting to a new level.

Because the modern solutions make it possible to accelerate the preparation of consolidated financial statements, while optimizing processes and thus saving costs.”

At the same time, internal and external accounting are integrated, which means that the earnings, financial and asset situation can be viewed holistically. Accounting processes, such as intercompany reconciliation, are made easier by the new solutions through digitization and machine learning – many processes can therefore be automated. The new products also offer informative and intuitive reports and dashboards that can be used to efficiently analyze company performance and create valid forecasts.

Conclusion

The products SAP Financial Consolidation and SEM-BCS will be discontinued in the foreseeable future. Companies are therefore well advised to start using the successor solutions now: not only because they minimize the risk of a system change with sufficient advance notice, but also because they benefit from the expanded functional scope of the modern solutions at an early stage. Because these offer helpful innovations for group reporting that accelerate the reporting processes and make them more efficient. External partners support you in choosing which software is the right successor, as well as in smooth migration.Patrik Monz, CALEO