SAP chooses BlackLine to streamline accounting processes for leased assets

⇨ SAP’s accounts payable team automated processes that involved 35,000 contracts and 1.7 million transactions

⇨ SAP turned to long-time partner BlackLine for a solution, which connects to SAP S/4HANA Cloud Finance to optimise financial closing processes

⇨ SAP reported time and cost savings with BlackLine, while making processes more accurate and visible

In implementing Blackline’s SAP Account Substantiation and Automation solution, SAP has improved accuracy, speed and cost savings while reducing compliance risk. Not a small thing for a global company of 110,000 employees, 35,000 contracts and 140 legal entities across 180 countries.

In terms of compliance, the changes to IFRFS16, the international accounting standard related to leases, triggered a change to SAP’s accounting processes – impacting the company’s global accounts payable team.

IFRS16 requires organisations to put leases on their main financial statements, effectively treating leases as purchases. The changes required to help SAP comply did not align with the company’s internal IT process restrictions at the time, making the processes complex and manually handled involving millions of transactions.

Some of the processes would happen on an individual lease contract level, and SAP had at least 35,000 contracts. The accounts payable team is spread across three continents and 10 different teams, handling more than 140 legal entities.

The accounts would also see some 1.7 million transactions at the time and growing, while visibility was also becoming more challenging.

To address these new challenges, SAP turned to accounting software specialist and long-time partner BlackLine for a solution.

SAP Account Substantiation and Automation by BlackLine is a cloud-based SaaS solution that connects to SAP S/4HANA Cloud Finance to optimise financial closing processes.

The application automates and streamlines SAP’s accounts payable team’s most labour-intensive financial close processes, aimed to eliminate or reduce routine, manual tasks while increasing visibility and standardisation.

SAP’s deployment involved three modules – matching, journal entry and accounts reconciliation – all brought together in a connected process. SAP S/4HANA was the source of all transactions, account balances and exchange rates.

Transaction matching will automatically analyse and match end-to-end lease process data, identifying suggested matches or items flagged for follow-up. Rule-based logic is configured to automate the creation of journal entries and streamline approval workflows. Accounts reconciliation work meanwhile involves substantiating account balances, identifying discrepancies and adjustments, attaching supporting documentation, and automating approval workflows.

With BlackLine’s solution, SAP reported a sizeable reduction of processing time without losing compliance control. Processing high volumes of transactions only takes minutes, and the finance team can configure their personalised pass rules without involving any IT resources.

SAP Account Substantiation and Automation ensures a more accurate financial close process by eliminating spreadsheet errors. This gives accounting staff greater control over the process while lowering compliance risk.

The solution also standardised and automated manual reconciliation, with dashboards and reports providing an oversight of the activities in real-time.

“We knew we could rely on BlackLine to improve our global end-to-end accounting process for our leased assets portfolio,” said Dana Stancikova, SAP project lead of GFSS P2P CoE.