SAP® ERP FINANCIALS

ENABLING FINANCIAL EXCELLENCE

SAP Solution Overview

SAP Business Suite
ESSENTIAL ENTERPRISE BUSINESS STRATEGY
PROVIDING A SOLID FOUNDATION FOR ENTERPRISE
FINANCIAL MANAGEMENT

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“Even before Sarbanes-Oxley was passed, SAP ERP Financials gave us the
support we needed to ensure our financials were well controlled, documented,
and reconciled.”

John Barron, Chief Financial Officer, Cole Haan

The SAP® ERP Financials solution, which is part of SAP Business Suite soft-
ware, delivers a complete, integrated financial management solution to ensure
compliant, predictable business performance. An essential building block of
your enterprise business strategy, SAP ERP Financials provides a solid foun-
dation to expand your business, realize greater efficiencies across key finan-
cial processes, and help ensure compliant and accurate accounting and
financial reporting.

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SAP® ERP AND SAP BUSINESS SUITE
BROADENING YOUR VISION TO SIMPLIFY
AND INNOVATE

Through its core applications, SAP

Business Suite supports all essential
business processes, including custom-
er relationship management, financial
management, human capital manage-
ment, asset management, product
life-cycle management, supplier rela-
tionship management, and supply chain
management. SAP Business Suite ap-
plications are built on service-oriented
architecture (SOA) to help companies
adapt to accelerating change. Powered
by the SAP NetWeaver® technology
platform, they give companies the
oppor tunity to integrate their value
chains, leveraging SAP and non-SAP
solutions.

SAP ERP Financials: A Foundation

During this time of economic uncertainty, a compa- for Expanding Your Business
ny’s decision makers need to know that the informa- During this time of economic uncertain-
tion they receive is both current and accurate. To ty, a company’s decision makers need
to know that the information they
achieve this, your business must establish a single receive is both current and accurate. To
version of the truth for all its employees. SAP ERP achieve this, your business must estab-
lish a single version of the truth for all
Financials can help, offering robust financial and its employees. The SAP ERP Financials
managerial accounting and reporting functionality to solution can help. Besides letting you
streamline financial processes, opti-
support confident decision making. mize working capital, mitigate financial
risks, and comply with global financial
reporting standards, the software
SAP® Business Suite software enables can deploy the software in a stepwise offers robust financial and managerial
enterprises to execute and optimize their manner to address specific business accounting and reporting functionality
business and IT strategies. Its modular challenges on their own timelines and to support confident decision making.
software is designed to work with other without costly upgrades. SAP Business Over 20,000 global companies rely on
SAP and non-SAP software to provide Suite provides better insight and visibili- SAP to provide the foundation for their
broad support for an organization’s ty across organizations, improves oper- financial management requirements.
essential business processes. Organi- ational efficiency and effectiveness,
zations and departments in all sectors and increases the flexibility to address
business change.

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YOUR BUSINESS AND THE GLOBAL ECONOMY
HARNESSING FINANCIAL MANAGEMENT SOFTWARE
THAT KEEPS PACE

Business decision makers today have a greater need for

relevant, accurate information than ever before. They
require integrated reporting tools that give them the power
to quickly identify the factors impacting the business.
Together with the SAP BusinessObjects portfolio, SAP
ERP Financials offers powerful functionality that meets
your most demanding accounting and financial reporting
requirements.

Not very long ago, the scope of a
finance organization’s responsibility
was limited to managing financial trans-
actions and generating periodic finan-
cial statements and management
reports. Today business is more com-
plex. We live in a global economy with
financial professionals expected to
meet a far wider range of challenges
than ever before.
As a financial professional, you must
produce accurate, timely financial re-
ports that satisfy global accounting and
regulatory compliance standards that
vary by industry and by country. Your
financial management software must
support internal controls and compli-
ance standards to help ensure trans-
parency of your company’s accounting
practices. On top of that, you need its
support in streamlining critical financial
processes, such as the financial close
cycle, accounts receivable, accounts
payable, and cash and financial risk
management.
Business decision makers today have
a greater need for relevant, accurate in-
formation than ever before. Inaccurate
or out-of-date reports can lead to bad
decisions. Executives, managers, and
frontline employees require integrated
reporting tools that give them the pow- In short, finance professionals must
er to quickly identify the factors impact- manage increasing complexity. SAP
ing the business and help them make provides the comprehensive financial
decisions that improve performance. management software you need to
Together with the SAP BusinessObjects™ help your finance organization harness
portfolio, SAP ERP Financials offers this complexity while gaining key
powerful functionality that meets your insight that leads to better business
most demanding accounting and finan- performance.
cial reporting requirements.
In addition, finance professionals need
to manage the cash conversion cycle
and overall working capital more effi-
ciently. Through automation and greater
insight into the accounts receivable and
accounts payable functions, business-
es can improve cash flow, reduce days
sales outstanding, optimize working
capital, and mitigate financial risks.

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FOCUSED FINANCIAL MANAGEMENT
GAINING INDUSTRY-SPECIFIC SUPPORT
FOR CORE ACCOUNTING

From the knowledge gained from thou-

sands of successful customer imple-
mentations, SAP has enhanced SAP
ERP Financials with functionality sup-
porting best-practices for the financial
management requirements of compa-
nies in more than 25 industries. This
delivers to you best-in-class support for
your industry-specific core accounting
and financial reporting processes. But
the software’s reach is much broader.
It gives you the ability to collaborate
across organizational boundaries on
a single platform that brings unprece-
dented efficiency to your financial pro-
cesses through end-to-end process
integrity.

In conjunction with SAP partner solu-

tions, SAP ERP Financials can support
enhanced processes such as cash
management, financial risk management,
invoice management, and the financial
close and reporting cycle. Because
they integrate with your core account-
ing applications in the SAP ERP appli-
cation, SAP partner solutions can help
support reporting and compliance re-
quirements. SAP ERP provides a com-
plete analytical platform to consolidate
business data, giving you comprehen-
sive and timely insight into critical busi-
ness processes. And because SAP ERP
is a single, integrated solution, finance
professionals have access to complete-
ly reconciled data across your key
financial business processes.
“With SAP ERP, we have realized the complete
automation of our accounting process. Now we
can perform monthly closing within one to two
hours, instead of the one to two days of manual
work required before we implemented the
solution.”
Zhenhai Wang, CIO, Phenix Optics Co. Ltd.
A SOLUTION THAT RESPONDS TO CHANGE
SUPPORTING FINANCIAL BUSINESS PROCESSES

Financial professionals, executives, and

managers need tools that adapt to the
way they work and to the needs of their
business. They want intuitively designed
solutions that require minimal training
and respond flexibly to the change inev-
itable in the business world today. And
they require software that supports
complex business processes in order
to gain greater efficiency and effective-
ness. Whether you are a regional busi-
ness or a multinational corporation, the
SAP ERP Financials solution gives you
that and more. Because it is based on
SOA, SAP ERP Financials allows you to
deploy business solutions more quickly
to flexibly manage your company’s vital
financial processes.

Financial and Management

Accounting
The SAP ERP Financials solution is
designed to support the most complex
financial requirements of global compa-
nies. It helps ensure accurate financial
accounting and reporting in accordance
with global financial reporting standards
such as generally accepted accounting
principles (GAAP) and International
Financial Reporting Standards (IFRS).
It helps streamline financial transaction
processing. The SAP General Ledger
application forms the foundation of ac-
counting transaction processing and re-
porting, while SAP ERP Financials pro-
vides support for accounts receivable,
accounts payable, fixed assets, inven-
tory, and cash accounting. These sub-
ledgers are completely integrated with
SAP General Ledger, so your financial
data is always reconciled and your re-
ports are completely accurate. This helps
Financial professionals, executives, and managers need
tools that adapt to the way they work and to the needs of
their business. They want intuitively designed solutions
that require minimal training and respond flexibly to the
change inevitable in the business world today.
avoid having to restate financial results of parallel accounting and managing
and reduces the cost and effort of the multiple sets of books – by region, in-
financial close and reporting cycle. dustry, or financial reporting standard.
It all rolls up to a single lead ledger, with
To support managerial reporting re- managerial and financial accounting
quirements, SAP General Ledger lets reconciled within a single application.
you allocate costs to the necessary
business segments through document Financial Supply Chain
splitting. As a result, balanced and rec- Management
oncilable financial statements can be
generated by any dimension of the Cash is the lifeblood of every company,
business – unit, profit center, or geo- and to ensure a healthy cash flow from
graphical location. SAP ERP Financials its commercial operations, a company
helps reduce the complexity and cost must apply rigorous control over

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customer trade credit evaluations and
accounts receivable. The SAP Financial
Supply Chain Management (SAP FSCM)
set of applications can help your com-
pany more effectively manage the
credit-to-cash cycle, reduce days sales
outstanding, and minimize bad debt
expense. Through robust information
sharing, collaboration, and workflow,
SAP FSCM helps you optimize working
capital processes through automated
credit management, electronic bill
presentment and payment, collections
management, and billing dispute
management.
Treasury Solutions
Treasury professionals face challenges
to optimize liquidity and protect company
revenue streams and asset values by
managing cash and financial risk more
effectively. With treasury applications
from SAP, you can manage the complete
spectrum of cash, liquidity, and financial
risk though greater transparency, con-
trol, and more effective decision mak-
ing. Advanced analytics help finance
professionals accurately assess interest
rate, foreign exchange, and commodity
price risk and employ hedging strate-
gies to mitigate them. In addition, SAP
treasury applications are completely in-
tegrated with SAP General Ledger to
help ensure transactions and positions
are accurately recorded and properly
reported in accordance with global fi-
nancial reporting standards.
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Financial professionals, executives, and managers need
tools that adapt to the way they work and to the needs of
their business. They want intuitively designed solutions
that require minimal training and respond flexibly to the
change inevitable in the business world today.
Improve Performance risk, and compliance solutions extend
Management your financial management require-
ments into critical areas of reporting,
Combine the power of SAP® compliance, and operational risk
BusinessObjects™ solutions with the management with best-in-class
SAP ERP Financials solution to financials applications that include:
support all your performance man- • Consolidation and reporting
agement requirements. Provide your • Planning, budgeting, and
executives, managers, and informa- forecasting
tion workers access to timely, per- • Performance management and
sonalized information and key perfor- scorecards
mance indicators in their own work • Governance, risk, and compliance
context. Give them the tools they
need to gain insight for effective Put the power of integrated perfor-
decision making. Take advantage mance management and enterprise-
of SAP ERP Financials, a solution wide analytic functionality on the
that can give broad analytical support desktops of your information workers
drawn from a rich selection of to improve decision making on all
SAP software as well as non-SAP levels. Serve the needs of your fi-
software. nance professionals – your accoun-
tants, financial analysts, credit
Extend Financial Management managers, and accounts receivable
managers – with embedded analytical
SAP BusinessObjects enterprise per- applications that deliver role-specific
formance management solutions and key performance indicators and
SAP BusinessObjects governance, performance information.
YOUR KEY BUSINESS ACTIVITIES
SUPPORT FOR THE PERFORMANCE
MANAGEMENT CYCLE
The SAP® ERP Financials Solution Supports Key Business Activities
Business Area
Performance management
Financial and management accounting
Financial supply chain management
Treasury management
Corporate governance
Activity Supported
Use the SAP® ERP Financials solution in combination with SAP BusinessObjects™
solutions to:
• Define overall company goals and departmental objectives and monitor performance
against them during execution
• Generate consolidated financial and managerial reports for globally distributed
businesses by aggregating financial data from SAP and third-party software
• Perform ad hoc queries and measure operational performance using real-time
transactional data and metrics
• Analyze cash and liquidity requirements, forecast cash, and manage financial risks more
effectively
• Jump-start operational planning tasks such as cost center planning, sales planning,
traditional budgeting, and collaborative express planning
• Determine inventory value according to country-specific accounting standards
• Record goods movements in up to three currencies and carry inventory values in
two additional currencies
• Generate a balanced set of books by business unit, profit center, or any other
organizational reporting dimension
• Analyze profitability by various dimensions such as product, market, customer,
service, or channel
• Streamline the financial close and reporting cycle
• Collaborate effectively to resolve billing disputes and account collections
• Streamline and automate customer credit decisions
• Automate the receivables and payment processing using Web and electronic payment
standards
• Forecast cash and manage company liquidity
• Reduce the complexity of interunit cash transfers and international banking transactions
• Model the current and future market environment, perform thorough risk analysis before
making investment decisions, and measure hedging effectiveness
• Achieve straight-though processing through electronic payment processes and
cost-effective electronic bank integrations
Use SAP BusinessObjects governance, risk, and compliance solutions to:
• Identify internal control gaps to reduce risk of noncompliance
• Integrate automated control testing results into control reporting to reduce duplicate work
• Provide auditors and management with increased visibility and direct access to control
tests, results, and remediation plans
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A COMPLETE FINANCIAL MANAGEMENT
SOLUTION
REDUCING TRANSACTION PROCESSING AND
ADMINISTRATIVE WORKLOADS
SAP ERP Financials provides a com-
plete, integrated financial management
solution to effectively fulfill the most
complex accounting, financial supply
chain, treasury, and corporate gover-
nance requirements. It supports inte-
grated financial and performance man-
agement, smart decision making, and
collaboration among financial profes-
sionals, executives, and managers. As
a facilitator of financial transformation,
SAP ERP Financials reduces transac-
tion processing and administrative
workloads, allowing financial profes-
sionals to concentrate on value-adding
activities.
Here are some ways you can maximize
your ROI using SAP ERP Financials.
Increase your insight for better
decision making and predictability by:
• Improving managerial accounting
support and your ability to generate
reports on any business dimension
• Leveraging performance manage-
ment tools to deepen your under-
standing of activities across the
entire value chain
• Improving the quality of business
planning, decision making, and per-
formance analysis
• Gaining access to relevant and timely
information
• Identifying performance issues early
and correcting them proactively
Improve the productivity, efficiency,
and responsiveness of your business
by:
• Automating financial and managerial
accounting processes and streamlin-
ing the financial close and reporting
cycle
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• Reducing operating costs of the fi-
nance function
• Extending the reach of financial busi-
ness processes to more people with-
in and beyond the enterprise – includ-
ing customers, suppliers, and partners
• Decreasing collections and billing dis-
pute processing costs through im-
proved collaboration and workflow –
an improvement that can account for
60% of total finance department
costs
Optimize your company’s cash flow by:
• Improving credit and collections
processes
• Making receivables management
more efficient
• Utilizing powerful analytics to model
future cash flows and financial risks,
more accurately forecast liquidity,
and reduce banking costs by pooling
global cash positions
• Leveraging enhanced electronic con-
nectivity to manage your organiza-
tion’s banking relationships and pay-
ment processes
• Using streamlined information ex-
change to benefit from up-to-the-
minute visibility of cash positions and
accelerated cash reporting
Improve financial compliance and
corporate governance by:
• Giving managers better visibility of
company performance to help them
improve profitability and manage risk
better
• Supporting global financial reporting
standards such as IFRS and GAAP
• Providing a mechanism for internal
process controls for financial report-
ing that includes support for docu-
mentation, testing, workflow, and
quality sign-off
The Right Application Architecture
The SAP NetWeaver technology plat-
form enables organizations of any size
to implement SOA as the basis for in-
novative business processes – result-
ing in better planning, improved perfor-
mance management, and faster
reactions to changing business require-
ments – by supporting the following
actions:
• Deploying analytical applications tai-
lored to the individual user’s role
• Integrating electronic payment and in-
voicing services into portals, enabling
secure self-service and collaboration
for customers, partners, and
suppliers
• Modifying general ledgers without im-
pacting financial consolidation or re-
porting processes
• Organizing consolidation processes
according to the needs of individual
business units
• Coordinating budgeting and planning
processes intuitively, eliminating the
need for end-user training and simpli-
fying individual spreadsheet
consolidation
• Enabling process owners and manag-
ers to document, test, and report on
the effectiveness of the organiza-
tion’s internal controls
• Managing relationships with banks to
track payment life cycle and reduce
the number of exceptions
• Helping credit managers control cred-
it risk by monitoring overall credit lim-
its without impacting customer
relationships
BENEFITS AT A GLANCE
IDENTIFYING OPPORTUNITIES TO SET STRATEGY

Activity
Financial and management accounting
Financial supply chain management
Treasury management
Performance management
Benefit
• Accelerate financial closes
• Increase accuracy of financial reporting
• Maintain balanced books reflecting any business dimension
• Comply with international and local accounting standards
• Decrease costs for billing, collections, and payment activities
• Reduce receivables risk
• Increase customer, partner, and supplier satisfaction
• Manage financial risk
• Forecast liquidity
• Measure future cash flows
• Maximize investment returns
• Expand the business
• Monitor performance against key performance indicators and benchmarks

The SAP ERP Financials solution is designed to support the most complex financial
requirements of global companies. It helps ensure accurate financial accounting
and reporting in accordance with global financial reporting standards such as gener-
ally accepted accounting principles (GAAP) and International Financial Reporting
Standards (IFRS).

A Proven Financial Management
Solution for Organizations in
Every Geography and Industry
SAP ERP Financials enables you to
manage your business more effectively
by supporting improved decision mak-
ing in financial and managerial account-
ing, financial supply chain management,
and treasury. With over 26,000 installa-
tions worldwide, SAP ERP Financials is corporate governance. For additional
the proven choice for best-run busi- information on how SAP ERP Financials
nesses. Regardless of size or industry, can help your company become a
all companies gain from this robust, best-run business, please visit
integrated financial management solu- www.sap.com/financials.
tion. It includes a solid foundation for
growth, better visibility and control over
all financial management processes,
support for global business require-
ments, and a framework for sustainable

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50 045 559 (09/04)
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