Companies are using SAP ERP Financials to automate more of their financial processes in an effort to cut costs as well as perform mission-critical tasks, including closing their financial books, in less time, according to experts. “Everybody’s under cost pressure. Everybody’s looking at ways they can cut expenses,” according to Rohana Gunawardena, SAP practice director for Quality Systems & Software, a consulting firm based in Las Vegas. The need for lower overhead is especially important in tight economic times, he said.
Automating financial processes also allows companies to more effectively outsource work to countries such as India, which means that work continues 24 hours a day. Work gets done faster and more inexpensively than if all of the work stayed only at that company’s headquarters.
“To keep [those processes] going, you need to use more technology; you have to have more things automated,” he said. That financial data also has to be accessible by a range of financial data teams, from ones located abroad to those that oversee the company’s financial operations and consolidations, as well as cost center and profit center managers, to name just a few.
“[Financial data] needs to be shared,” Gunawardena said. “The information needs to be visible so that different teams can see it.”
Faster closing times with SAP financial software
Given the maturity of SAP ERP Financials, and the customization the system allows, a majority of improvements now include introducing efficiencies into key processes.
One of the financial processes companies are most interested in doing faster is closing their financial books. Whereas years ago companies closed in 10 days, many businesses now consider that timeline archaic, Gunawardena said.
“That was considered a fast close. Now it’s standard to say three days. So if you want to close faster, you need to have more things automated, more things prepared in advance, more people working 24 hours a day on closing.”
One tool that companies can use for faster closings is SAP Closing Cockpit, he said. “It helps automate jobs and timing of jobs at close. If you need to run your depreciation [and] your revaluation, you can have it set up to say, ‘this should run at this time’ or ‘if this and this dependency is OK, then run the job.’ ”
SAP BusinessObjects embedded analytics
More companies are taking advantage of embedded SAP BusinessObjects analytics to make better decisions when it comes to financial operations, including credit management, according to Craig Himmelberger, director of systems marketing for ERP financials at SAP. By having more information at their fingertips in one central location, credit managers can often make faster decisions.
In the past, credit managers would get a static credit score for a customer, along with the customer’s order, and have to make a decision based on that limited amount of information. Analytics changes that, he said.
“Credit analytics are able to bring in more information than was possible on the static screens because they’re accessing external [corporate credit rating] providers like Dunn & Bradstreet. And those things change. You may have rated them as an A customer last month, but something may have happened,” he said.
Third-party tools for financial processes
Over the years the number of third-party tools for SAP ERP Financials has grown. Before considering a third-party option, check to see if the functionality is available in the system
“There is a lot of good standard functionality in SAP,” Gunawardena said.
However, for some areas in SAP ERP Financials, third-party tools make more sense because of the sophistication and stability of the products. For example, the standard process for a finance user to enter a journal voucher (JV), a list for financial debits and credits, is time-consuming, he said. Because finance users love working in Excel, two software applications allow users to create their JVs in Excel and then upload the data into SAP ERP Financials. That’s especially useful when JVs are long, which is quite common, he said.
Companies considering third-party tools should speak with reference customers for tips and troubleshooting advice or to determine whether such tools are right for them, Gunawardena added.