Intelligent afc public

PUBLIC
December 2018
Intelligent Accounting and Financial Close (AFC)

2PUBLIC© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Customer
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The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This
presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to
pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned
therein. This document, or any related presentation and SAP's strategy and possible future developments, products and/or platforms directions
and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information on this
document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a
warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular
purpose, or noninfringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no
responsibility for errors or omissions in this document, and shall have no liability for damages of any kind including without limitation direct,
special, indirect, or consequential damages that may result from the use of this document. This limitation shall not apply in cases of intent or
gross negligence.
All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from
expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and
they should not be relied upon in making purchasing decisions.

Customer
Intelligent Accounting and Financial Close: overview
Embedded Automation, Analytics, Compliance, ML and end2end Processes...
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
…provided as a Service

Customer
SAP S/4HANA (Cloud) for Advanced Financial Close
SAP S/4HANA (Cloud) for Accrual Management
SAP S/4HANA (Cloud) for Group Reporting
SAP S/4HANA (Cloud) for Predictive Accounting and Closing
SAP S/4HANA (Cloud) for Goods and Invoice Receipt Reconciliation
2018 update on new solutions in the area of AFC (and beyond)

Customer
Intelligent Accounting and Financial Close: update 2018
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
Advanced
Financial
Closing
Group
Reporting
Accrual
Management
Prediction
Self-service
Tax Audit
Advanced
Compliance
Reporting
GR/IR
Reconciliation

Customer
Intelligent Accounting and Financial Close: Automation
Closing
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
Fast, reliable,
low touch Close
SAP S/4HANA
for Advanced
Fin. Closing

Customer
Intelligent Accounting and Financial Close: Automation
Closing, Group Reporting
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
Fast, reliable,
low touch Close
SAP S/4HANA
for Advanced
Fin. Closing
Eliminate or
continuously drive
group reporting tasks
SAP S/4HANA
for Group
Reporting

Customer
SAP S/4HANA Continuous Accounting and Group Reporting
Period end Potential time saved to
do value-added tasks
Data upload
Intercompany
Currency
Elimination
Final report
Continuous accounting
(Intercompany, currency, validation, running simulations)
Traditional
Group
Reporting
SAP S/4HANA
Continuous
Accounting and
Group Reporting
Cons. Calculations
Period -2 -1 +1 +3 +5 +10
Elimination
Final reportConsolidation
calculations
Period -2 -1 +1 +3 +5 +10

Customer
SAP S/4HANA Group Reporting: in the Cloud

Customer
Simplification of Structures in S/4HANA Finance
General Ledger
Ledger Company Account
Profit
Center
Amount
1
Amount
2
Amount
3
…
Profitability Analysis
Operating
Concern
Market
Segment
…
Controlling
Controlling
Area
Cost
Element
Amount
1
Amount
2
Coding
Block
…
Asset Accounting
Company
Fixed
Asset
…
Inventory
Company Material …
ENTITY ACCOUNT DISTRIB. CUSTOMER
„Universal Journal“
Reporting Profitability Controlling Regulatory
AGGREGATION on the fly
PRODUCT

Customer
Simplification for Group Reporting
SAP
Systems
Non-SAP
Systems
Data Warehouse &
ETL-Tools
Consolidation Tool
Local Accounting
Consolidation w/ real-time access
SAP S/4HANA
Typical landscape today Target landscape

Customer
What are the advantages of real-time access?
Data Quality
Postings can be checked
continuously against central
validation rules
Shared Master Data and Rules
for local and group closing
Transparency
Fully enabled Drill-through from
consolidation to the line-items of
the entity (instead of
transformation in multiple
systems)
„Single Source of Truth“
Consolidation with free-of-choice
fields of the source system
Speed
Necessary adjustments can be
done locally and results are
provided immediately for
consolidation
Certain consolidation steps can
be performed before the
consolidation (e.g. currency
translation)

Customer
Instant Data Insight
Integrated accounting (operational) and consolidation (group ) reporting

Customer
Data Structure
ACDOCA ACDOCP
ACDOCU
Core Fields
Additional fields to select / deselect for
processing in consolidation
(=subset of ACDOCA fields)
Contains all records created by consolidation application +
reported financial data for non S/4HANA-companies
different data versions to separate plan / actuals / forecast / ...
Contains Actuals reported financial
data for S/4HANA-companies
Contains Plan reported financial data
for S/4HANA-companies

Customer
Intelligent Accounting and Financial Close: Analytics
Overview pages, Simulation and Prediction
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
Prediction
Overview
Pages
Embedded,
actionable
Analytics
Simulation
Extended reach
of Accounting

Customer
TOP-DOWN Prediction
Time series algorithm on
historic data in order to predict
future values considering trend,
cycles and/or fluctuation
SAP Leonardo Innovations
Changing the world of Finance by adding intelligence to applications
Predict
Predictive
Invoice
Sales Order
Predictive
Goods Issue
BOTTOM-UP Prediction
Predictive Accounting on the
basis of predicted documents
being part of an individual
business process and its
document flow
sum sum
Line item Line item

Customer
Predictive
Invoice
Sales Order
Predictive
Goods Issue
Predictive
CoGS Split
Pred. Revenue
Recognition
Pred. Revenue
Recognition
Pred. Overhead
Calculation
Pred. Profitability
Analysis
Financial insight into processes not yet GAAP relevant –
towards Predictive Close

Customer
 All KPIs based on a single source
 Fully consistent set of key figures
 Audit proof explanation of reported results
 Extend the traditional reach of accounting
beyond GAAPs
Predictive Accounting vision

Customer
2 major Financials innovations enabling Predictive Accounting
Universal Journal Extension ledgers

Customer
Origin of predictive and combined KPIs
Group
Prediction

Customer
Predictive KPIs – composed from several building blocks
LAB
PREVIEW
Second quarter EBT prediction as of June 17th
Building
blocks
Amount in T€
Actuals Costs &
revenues from
running
operations
Recurring
entries (e.g.
depreciation)
Extraordinary
effects
Closing (e.g.,
currency
remeasurement)
EBT
prediction
0,00
50.000,00
40.000,00
30.000,00
20.000,00
10.000,00
tbd

Customer
Predictive KPIs – composed from several building blocks
LAB
PREVIEW

Customer
Challenge:
Important KPIs in Accounting have to be predicted during
the months/quarter/year. The more precise they are the
higher the credibility in the Accounting capabilities.
Solution:
Information yet in the System but not GAAP-relevant, like
Sales Order Entries, is automatically translated into
Accounting language on the basis of line-items.
In combination with Learnings from the past the overall KPI
(like EBIT) is predicted – constantly without any data
extraction or specific run.
Value:
As a result, Management increases the ability to foresee
trends, take the right decisions on the basis of continuous,
precise information flow and thus steer the company on an
even better basis.
Predictive Accounting: Management Foresight in Accounting Language

Customer

Customer
Pred. Revenue
Recognition
Pred. Overhead
Calculation
Predictive
Invoice
Sales Order
Predictive
Goods Issue
Predictive
CoGS Split
Pred. Revenue
Recognition
SAP S/4HANA Cloud 1802 – Incoming Orders reporting
Incoming Orders
Reporting

Customer
SAP S/4HANA Cloud 1802 – Incoming Orders reporting

Customer
Intelligent Accounting and Financial Close: Compliance
Periodic Tax Reporting, Self-service Tax Audit
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
Periodic legal
(tax) reporting
Self-service
Tax Audit
Advanced
Compliance
Reporting
Intelligent
recommendations
and predictions

Customer
SAP Tax Compliance at a glance
Manage Tasks/
Collaborate/
Status
Routing
Connect data sources1.
Receive / validate exceptions3.
Take corrective actions4.
Check Source
System
Notifications
integrated
dashboard
Exceptions –
Tax Compliance hits
Examples:
Master data related checks
Ttransaction data related checks
Special checks like Chain transactions
Manage / Optimize Checks2.
Check
Repository
SAP Non-SAP
TM/IA/BU/ITTM/IA/BU/IT

Customer
Example: SAP Tax Compliance
Intelligent and automated tax controls through Machine Learning and Prediction
▪ Automatically detect tax deviations
▪ Leverage historical information and
ML to automatically classify work
items and propose next steps
▪ Gain reliable insights into tax
compliance status and remediation
▪ Reduce the risks and costs of
inaccurate calculations and liability
from noncompliance

Customer
Intelligent Accounting and Financial Close: Machine Learning
Goods and Invoice Receipt Reconciliation and Self-service Tax Audit
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
Intelligent
recommendations
Self-service
Tax Audit
GR/IR
Reconciliation
Intelligent
recommendations
and predictions

Customer
1) What?
▪ The GR/IR account reconciliation process is an exception
handling process for all purchase order items with
differences between goods receipts and invoice receipts.
▪ The root cause for the difference needs to be solved
usually through collaboration of Accounting, Buying
Center, Logistics and supplier or the difference is written
off.
Business Background
2) Why?
▪ Improve the accuracy of the financial statement
– Reduction of write-offs leads to a higher accuracy for cost and inventory valuation
as well as a better P&L result
– Increased accuracy of supplier liabilities
– Avoid potential fraud and errors of suppliers
▪ Compliance with corporate rules requires maintenance of the
GR/IR accounts (SOX compliance)
3) Customer Pain Points
▪ High manual effort
– for creating reports
– for gathering all relevant information
– for investigating the root cause and solving the issue
– for communicating between departments
▪ The high manual effort delays the period-end closing.
4) Benefits of our solution
▪ Embedded analytics in S/4HANA Cloud enabling powerful reporting
capabilities
▪ Real-time insights into all relevant information based on a simple
and flexible Fiori UI with integrated collaboration features
▪ Keeping track of process information enables process analysis and
optimization
▪ Higher efficiency through intelligent recommendations by a Machine
Learning service
▪ Faster period-end closing through less manual effort and real-time
data analysis

Customer
ML@GR/IR Account Reconciliation: Intelligent Recommendations
The goal of the ML service is to learn from decisions taken in the past, to apply the learned knowledge to the new
business situation and to make recommendations for the next meaningful steps for each purchase order item.
The recommendations from the algorithm are seamlessly integrated in the UI.
Investigation & Decision
Goods and Invoice Receipts
posted to a Purchase Order
GR equals
IR
Automatic
Clearing
Yes
No
Write-Off
GR/IR
Postings
Automatic
Clearing
Automatic
Clearing
Recommend the best next action based on
similar decisions made in the past
Recommendation
Service

Customer
Phase 1
Manual Processing
Phase 2
Processing with ML support
▪ The training data is used to train
the ML service.
▪ The recommendations of the ML
service support the end user for
taking faster and better
decisions.
▪ The ML service gets better with
the number of processed items.
Phase 3 (Vision)
Automated Processing
▪ As soon as the ML service is
considered to be trained well
enough with the available historic
data, the recommendations of
the ML service can be taken over
automatically. So more and more
manual steps can be replaced by
automated actions of the
machine.
From manual to automated processing
▪ The system logs the actions of the
end users. Thereby a set of training
data for the ML service is created.
The quality of the recommendations of the ML service depends on the size of the training set. With the
availability of more and more historic data of user actions, the ML service gets better over time and the
recommendations of the machine can be translated in automated actions.

Customer
Overview Page with relevant KPI‘s

Customer
Analytical List Page with drill-down and insight-to-action capabilities
We present the important factors for decision making in the
terminology of the typical end-user. So the end-user can
immediately grasp the situation and knows what to look for.

Customer
The user can also filter all purchase order items
based on the smart facts, before he delves into the
details of single purchase order items for further
processing.

Customer
The ML algorithm indicates, what might be a
meaningful next step and how important it is. We
provide recommendations for process status, priority
as well as root cause.

Customer

Customer
Intelligent Accounting and Financial Close: end-to-end process design:
pre processes, parallel processes, data capturing and external submission
Financial
Accounting
Group Close
Financial
Reporting
Entity ClosePre processes
Spreadsheet
template upload
ApprovalRequest
Exception
Handling
Pre-/Parallel-/Follow-on Processes
Documentation
myTickets-APP
data capturing
Electronic
Submission
Automatic data
transfer to
authorities

Customer
Intelligent Accounting and Financial Close: end-to-end process design:
pre processes, parallel processes, data capturing and external submission
Financial
Accounting
Group Close
Financial
Reporting
Entity ClosePre processes
Spreadsheet
template upload
ApprovalRequest
Exception
Handling
Pre-/Parallel-/Follow-on Processes
Documentation
myTickets-APP
data capturing
Electronic
Submission
Supported by
SAP Advanced
Compliance
Reporting
Supported by SAP Shared Service
Framework and SAP Process Control

Customer
Intelligent Accounting and Financial Close: overview
Embedded Automation, Analytics, Compliance, ML and end2end Processes...
Record-to-
Report
Financial
Accounting
Group Close
Financial
Reporting
Entity Close
…provided as a Service

The Best Run SAP
Contact your SAP Account Executive

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The information contained herein may be changed without prior notice. Some software products marketed by SAP SE and its distributors contain proprietary software components
of other software vendors. National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP or its affiliated
companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP or SAP affiliate company products and services are those that are
set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release
any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products,
and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The
information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various
risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,
and they should not be relied upon in making purchasing decisions.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company)
in Germany and other countries. All other product and service names mentioned are the trademarks of their respective companies.
See http://global.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices.
© 2018 SAP SE or an SAP affiliate company. All rights reserved.

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