Group Consolidation and Corporate Reporting
Consolidate Your Financial Statements – with maximum Efficiency and Automation
“From record to report” means: During the preparation of consolidated financial statements, the individual group companies (legally independent) are combined to form an overall group. The financial statements of the single subsidiaries are aggregated in the group currency while all intercompany relationships within the group are eliminated.
Consolidated financial statements can only be prepared properly if data from various sources are standardized and presented according to criteria defined legally (externally) or internally. If the focus is on legally binding requirements (e.g. IFRS), this is defined as Legal Consolidation (incl. balance sheet, income statement, individual segments).
In contrast, a Management Consolidation mainly serves to inform the management and thus follows its specifications or other internal parameters (especially with regard to organizational structure).
Another important difference is the frequency with which financial statements are prepared: In External Group Accounting, only Annual Financial Statements (audited) and quarterly financial statements (generally unaudited) must be submitted by law. Regarding Internal Accounting, however, the management usually demands consolidation at significantly shorter intervals (usually monthly) in order to satisfy its information requirements.
At the same time, external stakeholders also demand more transparency via the acceleration of financial statements at shorter intervals. Therefore the Fast Close aspect is becoming increasingly important – both internally and externally. To meet the complex requirements in all consolidation areas completely, correctly and as efficiently as possible, enterprises rely on automated support by SAP software such as SEM-BCS or BCS for BW/4HANA or S/4HANA Finance for Group Reporting.
The customizable consolidation solution SAP SEM-BCS (Business Consolidation System) automates, standardizes and simplifies the consolidation in your enterprise – for External Reporting as well as for Internal (Management) Reporting.
The graphical Consolidation Monitor provides a comprehensive real-time overview of all consolidation steps, units and proceedings. This also includes a continuous data-quality check at each step so that immediate response to any deviations is possible at any time. The information messages (incl. warnings, errors) cover both business and technical aspects. Thus full control is always guaranteed.
The document-based BCS software books both manual and automatic consolidation situations in accordance with the Principles of Orderly Accounting as well as on the basis of posting levels. By using the individual document types, the transition between financial reporting data, adjusted financial reporting data and consolidated data is complete and transparent at all times: When posted, each document is assigned an individual number and associated with the corresponding posting level.
SEM-BCS is based on a multi–dimensional data model in SAP BW which allows flexible, correct and automated mapping of all relevant requirements/changes. Simultaneously, BI functions allow direct access to ERP systems while the Consolidation Monitor is available as a standardized analysis tool with various reporting options (e. g. drill-downs to the level of accounting documents).
In addition, data from other departments and/or applications (e. g. Planning, Controlling) can be integrated easily into the consolidation process. In terms of compliance, BW-based data entry and storage are ideal: Deviations between operational accounting and consolidation system can be avoided efficiently in this way.
Furthermore, SEM-BCS can be used to handle complex processes automatically – such as Capital or Matrix Consolidation (simultaneous execution of Legal and Management Consolidation). Examples for other important consolidation functions:
- Intercompany Reconciliation
- Currency Conversion
- Interunit Eliminations
- Elimination of Intercompany Profit in Fixed and Current Assets
- Capital Consolidation
Enhancement Packages for SAP SEM-BCS
The SAP maintenance guarantee for SEM-BCS (until December 31, 2025) offers investment security and includes various enhancement packages. These provide your enterprise with the following advantages:
- Expansion as to new regulatory and legal requirements
- New functions regarding Consolidation Logic
- Improved performance and ease of use
- Optimization of administration and maintenance
- Improved integration with other components (SAP and non-SAP)
- Optimization of compliance and auditability
In the context of SAP’s HANA strategy, SAP BW was also optimized for this technology (= SAP BW/4HANA): BW is no longer based on the Netweaver platform – instead, the latter has been replaced by new technical objects (advanced DataStoreObjects; aDSO) optimized specifically for the performance of the HANA database.
The BCS for the new BW platform was also modified stringently for this purpose. The modification resulted in the new product “SAP BW/4HANA, Business Consolidation Add-on” which is hereafter referred to as “BCS/4HANA”. Version 1.0 of BCS/4HANA has been generally available since February 13, 2019 (Release Note: SAP Note 1330000) and runs on SAP BW/4HANA 1.0.
In addition to the license for the BW/4HANA platform, the use of BCS/4HANA requires an additional license which in turn is part of the license for SAP S/4HANA for Group Reporting: The prerequisite for using BCS/4HANA is license acquisition for 50 consolidation units in S/4HANA for Group Reporting. Customers who have purchased this license (as well as the license for SAP BW/4HANA) can use BCS/4HANA for an unlimited number of consolidation units (from a commercial point of view).
For information about the technical installation of BCS/4HANA, please see SAP Note 2684537.
Two techniques are available for a conversion from SAP BW to SAP BW/4 HANA: In-Place Conversion and Remote Conversion (see SAP Note 2383530). As to switching from SEM-BCS to BCS/4HANA, only In-Place Conversion is possible at the moment (see SAP Note 2651241).
BCS/4HANA 1.0 offers the features of SEM-BCS based on EHP8. But there are also other innovations.
S/4HANA Finance for Group Reporting is a new SAP consolidation solution which is available for On-Premise use (Release 1809) or as a Cloud application (Release 1811). This product with strategic character combines all functionalities resp. advantages of SAP SEM-BCS and SAP BPC for consolidation.
With the “Single Source of Truth” concept in the form of the HANA database, a uniform basis has been created: The Universal Journal located in HANA (individual Financial Statement data or individual document table of financial accounting; ACDOCA) permanently corresponds with the consolidation data (ACDOCU) on the same platform.
The result is a comprehensive and direct real-time link between the central consolidation system and the operational accounts of the individual business units. In terms of technology, this represents a certain revolution:
In the case of the traditional downstream consolidation outside the operational pre-system (ERP), the data for each reporting event must be transferred to a separate consolidation system – and, if necessary, also be harmonized and validated partially with much effort.
By contrast, the consolidation is now carried out directly and continuously in the ERP system by using Continuous Accounting with SAP S/4HANA Finance for Group Reporting. This eliminates the need for complex data transfers while automated checks/validations (supported by interactive comments and reporting functions) are possible directly in the ERP system as well. The conversion of individual closing values from local or transaction currency to group currency is also carried out continuously and automatically – these data can be displayed in real time, too. Simultaneously, manual adjustment entries can also be carried out anytime.
Via integrative access to the full spectrum of accounting and controlling data, not only Legal Consolidation can be implemented conveniently as part of the closing processes – but also Management, Matrix or Capital Consolidation. Regarding the reconciliation between the accounting departments (Finance and Management), the effort is minimized considerably or eliminated completely: All financial data are based on identical account balances now.
At the same time, data redundancies are avoided reliably while data quality, loading and closing speed increase efficiently. Precise logging is ensured as well.
Thanks to the structural direct link between the consolidation table and the line-item table, you can switch from the consolidation level down to the individual document level at will – resulting in optimum transparency. Also in real time, Drag & Drop provides access to details (e. g. to cost centers) which cannot be displayed by default with conventional consolidation concepts. Business users can control the system by using stored specifications in the master data (analogous to SAP BPC).
Whether On-Premise or Cloud version: Users of SAP S/4HANA Finance for Group Reporting enjoy numerous benefits provided by the integrated and very versatile reporting system (incl. balance sheet, income statement, cash flow, overall result, changes in equity). S/4HANA Embedded Analytics is available as standard (e. g. for easy drill–downs to individual document level).
An additional resp. separate option for data evaluation is the use of the established, Excel-based SAP Analysis for Office (from On-Premise Release 1809).
Interactive real-time dashboarding with the SAP Analytics Cloud (SAC) as an independent extension is also possible. Thanks to integration, e. g. planning (incl. simulations) can be designed with the SAC and then be consolidated in Group Reporting. If required, combinations of Embedded Analytics, Analysis for Office and SAC can be implemented as well. In the future, SAP Disclosure Management will also be linked to the Group Reporting system.
The SAP BOBI Suite and the SAP Analytics Cloud (SAC) are also available as reporting technologies for SAP SEM-BCS and BCS for BW/4 HANA.
We support you competently in implementing your Consolidation requirements and your Group Reporting (internal and external) in a timely manner – with automation, with maximum efficiency and at the required reporting intervals.
Within this framework, we offer you e. g. the following services:
- Customer-specific development of standardized technical processes
- Support in designing all required data models
- Process definition as to entering/delivering all consolidation and reporting data (incl. all related relevance data from primary systems)
- Assurance of reliable, up-to-date standards for data quality and harmonisation
- Integration of the relevant data of all required reporting events into your existing data warehouse or consolidation system – in compliance with your BI Governance
- Harmonization of your internal and external Group Reporting
- Modelling of defined consolidation processes in SAP SEM-BCS, SAP BCS for BW/4HANA and SAP S/4HANA Finance for Group Reporting (On-Premise or Cloud version)
- Implementation, startup and extension of SAP SEM-BCS, SAP BCS for BW/4HANA and SAP S/4HANA Finance for Group Reporting (On-Premise or Cloud version)
- Integration of SAP Disclosure Management with SAP S/4HANA Finance for Group Reporting
- Extension of your Consolidation and Reporting system by integrated solutions for planning requirements (optionally via SAP Analytics Cloud)
- Extension of your Consolidation and Reporting system with integrated solutions for analytical requirements (optional via SAP Analytics Cloud)
- Realization of a standardized, meaningful and self-explanatory notation for your Group Reporting (internal and external) based on the International Business Communication Standards (IBCS®)
- SAP SEM-BCS (On-Premise)
- SAP BCS for BW/4HANA (On-Premise)
- SAP S/4HANA Finance for Group Reporting (On-Premise or Cloud version)
- SAP Disclosure Management
- SAP Analytics Cloud (SAC)
- SAP BW on | SAP BW/4HANA
- SAP BOBI Suite incl. SAP Lumira and Analysis for Office
- SAP BPC
- SAP BW-IP
- Hi-Chart® Add-on Chart-me DS for SAP BO Lumira (SAP®–certified + IBCS®–certified)
- graphomate® Add-ons for SAP BO Design Studio (SAP®–certified + IBCS®–certified)
You have questions about our services? You are looking for the appropriate contact person? Or you would prefer an individual consultation? We are always at your service and are taking care of your request as quickly as possible. Just contact us!