GROUP REPORTING

• Authorizations: A well thought-out authorization concept ensures that each user can only access and make changes to the data for which he or she is authorized. This also applies to the adjustment of settings. With suitable default settings, a large number of authorizations can be adapted with just a few changes, while still allowing for individual adjustments.
• Logs and receipts: In order to document the data changes in a traceable manner, each step in the closing process contains a log that records the changes, including the reason for the change and other metadata. Each data change is accompanied by a receipt documenting the type and source of the change.
• Status management: Status management with a traffic light system is very important for the preparation of financial statements, as it ensures that the consolidation steps are carried out in the correct order.

One of the most important components of a successful consolidation application is setting up the data model correctly with the required level of detail. What additional information is required for the organizations, accounts and business areas during data collection and consolidation? Where does the data come from? Which data adjustment and consolidation steps are carried out? What customer-specific features exist and how can these be mapped? Is there a matrix consolidation? How is the reporting structured? Adjustments to the data model are also possible after a go-live, but some changes cannot be implemented as optimally as at the start of the process.

Validations are used for quality control of all financial data and are technically implemented at various points in the financial statements, both for individual organizations and for the Group as a whole. Some SAP consolidation solutions already offer a predefined set of validations. All SAP solutions make it possible to create checks that range from simple to complex, customer-specific and nested requirements.

All intragroup transactions must be eliminated in the consolidated financial statements. This is done by offsetting intragroup expenses, income, receivables and liabilities. The reported items in the aggregated balance sheet are offset against each other and thus eliminated. In SAP Group Reporting, intercompany differences are identified and corrected before the actual elimination entries are made. FI accountants can support the group accountants in analyzing differences and carry out preparatory work. Other SAP consolidation solutions also offer automatic determination of differences. If the data model is set up correctly, the differences can be easily broken down.

SAP solutions offer automatic posting logic for various types of consolidation and elimination, such as debt, dividend, expense and incomeconsolidation, elimination of intercompany profits and losses, capital consolidation as well as customer-specific consolidation and elimination logic. Cash flow accounting can also be integrated.

Thanks to the careful design of the data model and the consolidation steps, customer-specific requirements can be easily implemented and mapped with reusable structures. This ensures that when the chart of accounts or requirements change, not every step has to be adapted, but only a few structures. In addition, a targeted selection of the source data enables different levels of detail to be selected, which can then be entered with the desired change logic and further details.

If the affiliation of an organization to the group changes, the consolidation entries are automatically adjusted accordingly.

Most SAP consolidation solutions also offer the option of matrix consolidation, i.e. simultaneous consolidation on two different dimensions - business and business area - which is particularly useful for management reporting.

The data from the consolidation application can be used in various reporting solutions. Either the existing functions within the consolidation application are used, or reports are created in an SAP reporting tool according to customer-specific requirements. In some cases, it is possible to carry out simulations and matrix consolidations in reporting in real time. Alternatively, another SAP product, such as SAP Analytics Cloud (SAC), can be used to create appealing dashboards. Regardless of the reporting solution selected, the latest data is always displayed in the reports.

The various consolidation applications offer several options for carrying out simulations without having to save data multiple times. These simulations can be used, for example, for currencies, group structures, discontinued operations and changed groupings of profit centers. In some cases, the calculations can also be carried out directly in reporting solutions.

• Balance carryforward: A fundamental prerequisite for the comparability of financial statements across different time periods is the principle of balance sheet identity. In the SAP consolidation applications, the closing balance sheet is carried forward automatically and can also be created for other accounts with different source and target accounts and different levels of detail.
• Net income: To ensure that the balance sheet and income statement are consistent, the net income is automatically calculated and posted to the selected accounts in both reports.
• Inversion: To ensure traceability, each manual and automatic entry is created with a voucher that identifies the type and source of the data. These documents can be used automatically for permanent or temporary data changes.
• Automatic adjustments for drill-down changes: If an additional characteristic is added to the organization or to an account, it is possible in many cases to automatically fill the existing reporting data with the corresponding characteristics for the new characteristic.