In order to conduct various business activities, most large enterprises are setup as a hierarchical business unit structure. These can be classified in one of three ways – profit center, cost center or investment center. In the course of conducting business, there is an ongoing need to perform various transactions such as postings to different cost centers, creating internal orders, settling internal orders to cost centers, posting to a profit center, assigning cost to a profit center, and more. For organizations using SAP®, such as S/4HANA, as their ERP, the Controlling (CO) module allows you to manage and configure master data that covers cost and profit centers, internal orders, and other cost elements and functional areas. However, performing those activities using native SAP® CO functionality requires tremendous manual effort that is inefficient and error-prone.
The typical process for any of the above examples involves someone on the finance team to create a spreadsheet with all the required information in pre-defined templates. Once it is reviewed for correctness and approved by a manager or managers via multiple email exchanges, the file is then sent to another team who then uses a specific SAP® t-code to access the SAP transaction. This then goes through a series of forms on multiple tabs to manually input the data from the spreadsheet and then finally completes the transaction. This process can easily take someone 15-30 minutes to process each transaction. End to end, it can take hundreds of hours each period to perform these routine activities and can easily add several days of delay to the overall period-end close process. This manual process may look something like this:
Many companies have tried to address this challenge by automating the manual activities by using 3rd party RPA tools such as UiPath, Blue Prism, or Automation Anywhere. Those RPA projects can be prohibitively expensive once you add the software license, configure the bots, and continuously monitor and maintain the bots. In addition, this automation is not addressing auditability, traceability, reporting or dashboarding. It is similar to applying a band-aid to address a short-term pain instead of addressing the deeper issues due to the lack of proper controls around these processes.
By using Cadency, organizations can not only eliminate manual steps by automating the CO postings but significantly improve controls around their business processes, reducing cost and risk while increasing the efficiency and effectiveness of the overall close process. The accuracy and control of SAP® CO postings are critical as it helps with planning and decision making. It enables the decision makers to determine variances by comparing actual data with plan data. An efficient CO posting allows proper data flow between Finance (FI) and CO modules within SAP® on a regular basis. ERP Bots support the automation of several CO posting types such as manual cost allocation, reposting of cost, reposting secondary costs, direct activity allocations, and activity posting, to name a few.
Now, you may be wondering why you should invest in another solution when you already have SAP® in place. ERPs are great at what they were created for but do not provide the automation or controls needed for an effective and efficient Record to Report (R2R) process. Other vendors do not provide a fully integrated R2R platform with cutting edge native ERP automation like Trintech does. You can try to piecemeal a solution to accomplish the same functionality using other vendor tools and custom developments, but that takes you back to square one with increases your cost and risk with disjointed and error-prone processes.
So, let’s look at examples of CO posting use cases, but this time using Cadency. Cadency provides a seamless and comprehensive solution within its Journal Entry process to eliminate manual steps and the use of non-standardized tools such as spreadsheets, emails and custom tools. Customers can use a variety of data ingestion features to prepare CO postings, use configurable workflow to manage review, approval and real-time posting to SAP® ECC or S/4HANA enabling traceability and auditability. Cadency utilizes its certified SAP® Connectors and ERP Bots to further enrich the posting process with various automated validations, master data lookups, and error handling to further reduce effort and risk. On top of this, there are numerous filtering, reporting and customizable dashboards to track the overall progress of tasks, ensuring the timeliness of the close process. After automation, the CO posting process is simplified as follows:
This enhanced, fully automated CO posting process using Cadency is valuable to both finance and IT leaders. It makes the finance team’s job significantly easier and cost effective while IT teams benefit from Cadency’s cutting-edge unified SaaS platform with industry leading security and IT controls.
For more information on how Cadency can transform your Office of Finance, contact us.
Written by: Mantosh Kumar