A successful closing cycle includes the following actions:

• Focus on accuracy as opposed to speed
• Improve accountability and control throughout the cycle
• Simplify and standardize processes to eliminate unnecessary complexity and inconsistencies
• Streamline and optimize the entire cycle by appropriately sequencing work steps while eliminating bottlenecks, duplication of effort, and non-value-added activities
• Align with stakeholder needs to provide effective decision support and regulatory compliance
• Focus on process and effectively use technology

SAP Solutions to Manage the Closing Cycle

SAP supports core entity accounting and close-to-report activities. Internal controls play a key role in each of the accounting and financial close activities. SAP GRC 10.0 can help you improve control and accountability while automating manual activities and providing centralized access to documents. SAP GRC 10.0 can be customized to:

• Improve internal controls and promote accountability
• Provide real-time status and increase visibility for management
• Serve as a repository for support material and accounting documentation
• Enhance communication and coordination throughout the organization
• Support document storage and version control
• Further accelerate the closing cycle

Align SAP GRC 10.0 with Strategy

To ensure that processes and SAP GRC 10.0 align with your company’s overall strategy, you need to keep these three points in mind:

• Use key drivers to monitor performance. An organization’s strategy drives closing activities through key performance indicators (KPIs) defined and monitored through SAP GRC 10.0. To measure performance and provide decision support, companies can link financial and operational KPIs to the corporate strategy, market conditions, and competitive environment. Eliminate non-value-adding activities that are not in line with the KPIs or corporate strategy.
• Achieve consistency in planning, reporting, and analysis. Leading companies are using standardized processes, technology, and data models across the enterprise to improve financial planning and reporting and decision-support activities. SAP GRC 10.0 survey, workflow, and control performance functionality can be used to enforce consistency to be sure the entire closing cycle is efficiently linked with organizational strategy.
• Improve collaboration throughout the organization. Optimal closing cycles require a strong degree of interaction between finance, operations, IT, and business unit managers. Without coordination, it is difficult to align strategic objectives. SAP GRC 10.0 can help your company improve collaboration among all its business units.

Expand Your Ability to Use SAP GRC 10.0

SAP GRC 10 can support mechanisms that help to analyze and communicate data. Key indicators that a company is not fully using this solution include excessive reliance on Excel spreadsheets, too many manual JEs, manual account and bank reconciliations, decentralized document storage and version control, and hard-copy report distribution.

As part of your plan to leverage SAP GRC 10.0, you need to automate manual activities and create templates. You also need to review all manual tasks that contribute to your closing process and identify opportunities for automation. Using the survey functionality of SAP Process Control, you can automate most of the manual approval activities on reconciliations and other adjustments and also create templates for future use.

You can also use SAP Process Control for real-time status tracking. In addition to core financial systems, companies can leverage workflow and collaboration capabilities of the tool to more effectively manage the closing process. You can customize SAP GRC 10.0 to meet your specific needs while monitoring the status of all activities, facilitating communication and coordination and providing centralized document storage and version control.

SAP Process Control’s continuous control-monitoring capabilities can help proactive identification, escalation, and remediation of configuration settings associated with key financial close controls. Proper configuration settings provide assurance over reliability of transactions processed. Examples of key configuration controls supporting the financial close process that can be monitored via SAP GRC 10.0 include:

• Changes to configuration for bank accounts and payment terms
• Exchange rate tolerance levels, which can prevent transactions from being processed outside of acceptable limits
• Posting period variant configurations for company codes
• Real-time integration between FI and CO modules to ensure the postings to ensure the balance is always zero
• General ledger field structures modifications
• Changes (including creation, modification, and deletion) made to critical attributes defined in general ledger master data
• Changes made to the general ledger account code options or account mapping for automatic system processing functions

SAP GRC 10.0 can be leveraged to automate and support financial close activities. As shown in Figure 1, functionality from both the SAP Access Control and SAP Process Control modules can facilitate workflow for key tasks, automate analysis of risks and controls, and monitor critical data.

Figure 1

SAP GRC 10.0 supports activities related to financial close

SAP Process Control provides users with a central policy repository to help manage the policy lifecycle of your company’s financial close policies. The policy lifecycle is aided with the help of workflows to help manage the creation, maintenance, revision, and publishing of new policy versions. The target audience of the policy can be defined by leveraging existing users tied to organizations, business processes, and user roles defined in the SAP GRC 10.0 suite as well as individuals outside of this environment. This process helps provide transparency and accountability for all relevant policy management stakeholders.

Examples of How SAP GRC 10.0 Supports a Financial Close

The following examples demonstrate how specific features within SAP Access Control and SAP Process Control can be used during the financial close process.

Distribute a Financial Close Checklist with SAP Process Control 10.0 Survey Workflow

SAP Process Control 10.0 surveys are configurable. The survey questions can be customized to include tasks related to financial close and distributed to the various business units via workflow. More important, the progress against these tasks can be tracked.

As shown in Figure 2, system administrators can use the survey wizard to easily build a financial close checklist to manage with standard PC workflow and real-time reporting.

Figure 2

A configurable PC survey with integrated financial close checklist questions

Track Financial Close Tasks with Real-Time Reporting

SAP Process Control 10.0 reports can be configured to track progress for the financial close process. Reports can be displayed by business unit, plant, organization, and so on. Figure 3 is an example of an SAP Process Control survey report configured to display the progress of the financial close checklist as well as the details behind each user’s response. This information is automatically compiled in a format that management can easily review and understand.

Figure 3

An SAP Process Control report tracking survey progress and results

Automate Queries for Business Insights

SAP Process Control 10.0 can automate the execution of SAP ERP Central Component (SAP ECC) queries that support the financial close process. These query results are saved in SAP Process Control for reference. You can use them to automatically generate workflow review tasks. For example, Figure 4 lists searches for manual journal entries or adjustments of more than $1,000,000. The query facilitates the review of the highest priority journal entries.

Figure 4

A list of manual adjustments greater than $1,000,000

Test Automated Controls that Support Financial Close

SAP Process Control 10.0 automated business rules continuously monitor configurations that support the financial close process. Continuous assurance over these configurations helps track the reliability of transactions.

Figure 5 lists the automated test checks for company codes in which the configured exchange rate deviation allowed has been changed from a maximum allowed variance of 10 percent. SAP Process Control reports instances in which the configuration is incorrect, triggering a review of specific gain or loss variance accounts.

Figure 5

Results from an automated test for exchange rate deviation configurations greater than 10 percent

Monitor SoD and Sensitive Access for Financial Close Processes

SAP Access Control enables organizations to accurately identify and analyze access risk violations in real time across SAP and non-SAP applications for key financial processes. With SAP Access Control, you can define controls to mitigate violations and gain visibility into the control’s effectiveness.

Figure 6 shows the parameters that can be used to define a segregation of duties (SoD) analysis through the standard SAP Access Control functionality. This type of analysis can identify violations across user groups, systems, and roles.

Figure 6

Execution of a real-time SoD analysis report from SAP Access Control 10.0

SAP Process Control can further automate the SoD analysis to identify violations without requiring a user to execute the report. When violations are identified, the report is automatically routed to the security administrator for faster review and remediation.

With SAP Process Control, you can monitor high-risk SoD violations. For example, you can monitor the following SoD cases for incompatible functions:   

• Maintain accounting periods and post accounting document in the general ledger
• Create or change general ledger master data and post accounting document in the general ledger
• Maintain exchange rates and run a foreign exchange revaluation program
• Maintain accounting periods and run a foreign exchange revaluation program