This is Blog #9 in our Record to Report Blog Series. You can find the complete series outlined HERE.
Author: Pete Graham, Experienced Solution Management Software Professional, SAP
It has now been several years since the introduction of the IFRS 15 / ASC 606 accounting standards for revenue recognition which initiated a new 5-step model for revenue recognition in most countries around the world. We have seen an extremely wide diversity of requirements across many industries and the complexity of those requirements seems to be constantly evolving as customers adopt new business models in the Digital Solutions Economy heavily influenced by the on-going pandemic. It still amazes me the complexity that customers are continually seeing on this topic due to the ever-changing business models.
To help customers with the Automated Revenue Management (ARM) journey, the Comply, Optimize, Transform (COT) methodology discussed in the prior blog (COT, refer to Sep 15 LA blog)) can also be applied successfully to Revenue Accounting. So let’s highlight SAP’s success with ARM and COT.
SAP SE began using Automated Revenue Management solutions from SAP back in 2014. Overtime they have experienced the Automated Revenue Management (ARM) journey like most customers, first complying with then current accounting regulations and then expanding the use to the new IFRS 15 / ASC 606 standards, later better enabling financial closings, over time better integrating acquired companies, and more recently leveraging S/4 HANA to enable Transformation of the finance operations. The graphic below highlights the revenue accounting scenarios plus the seamless BRIM integration supported by Automated Revenue Management (ARM) solutions by SAP run by SAP SE.
As we dig deeper into the Automated Revenue Management (ARM) topic, SAP has continued to deliver product updates and innovations. SAP is constantly updating the Automated Revenue Management (ARM) solutions to better meet these challenges that customers face, and the most recent innovations focus on offering customers Better Experiences and Better Insights.
The Better Experiences are powered by the SAP S/4HANA Intelligent Enterprise coupled with the Universal Journal and the Fiori UI. We can see that the Event-Based Revenue Recognition (EBRR roadmap) in the SAP Public Cloud provides real-time reporting, no reconciliation efforts for cost and revenue data, and full transparency to GL data with audit trails.
And the SAP S/4HANA Intelligent Enterprise architecture allows for Transformational improvements upon adoption as some customers have experienced when adopting the SAP S/4HANA Public Cloud starting from a legacy ERP environment.
Better Insights are also powered by SAP S/4HANA Intelligent Enterprise coupled with the Universal Journal and the Fiori UI enabling embedded analytics. These capabilities really provide instant insights into many of the commonly requested reporting elements for revenue accounting. The Fiori UI also has allowed Better Experiences for the finance and accounting end users by streaming the day-to-day tasks.
Readers can see demos of these latest Automated Revenue Management (ARM) solutions from SAP by viewing the most recent SAP Revenue Accounting and Reporting Global User Group meeting replay (RAR user group meeting number 22 ).
Also, the replay registration will also be available via the SAP RAR Global User Group Meeting home page in the near future.
And for a podcast on Automated Revenue Management solutions from SAP in the Digital Solutions Economy can be found here.
Call to action: To learn more about process efficiency in the Close, join us and customers at the virtual event for Financial Close and Reporting.
Check out the rest of our series: