As organizations become larger and more complex, the period-end closing process inevitably grows more complicated. SAP's on-premises Financial Closing Cockpit application and the next-generation cloud iteration could help companies carry out these tasks.
Some of the potentially beneficial Financial Closing Cockpit (FCC) and S/4HANA Cloud for Advanced Financial Closing (AFC) features include the task template, which can help with the closing process, and analytics, which displays overdue tasks.
Here's a look at the period-end closing process and how FCC and AFC can potentially help companies.
The period-end closing process
Many companies first use spreadsheets to organize their closing process, adding a list of the tasks and who is doing them, as well as due dates and task status. Closing documents, worksheets and backup materials are often stored on shared network drives. Doing so requires careful attention to details like user permissions and document version control.
But as an organization grows and the process begins to include more people and documents, using spreadsheets can quickly become unwieldy.
SAP's FCC and AFC applications are potential choices for companies looking for a better way to manage the closing process. Both products contain similar functionality, but the cloud version includes a better user interface and also incorporates corporate closing and statutory reporting.
Many organizations opt to deploy complementary third-party products in addition to FCC or AFC so they can automate account reconciliation tasks and improve auditability.
Because the products are so similar, the following references to FCC generally apply to AFC as well.
Month-end closing project management
In many respects, FCC functions like project management software that is specifically tailored to financial closing. It's integrated with the rest of the SAP product portfolio, so users can launch many period-end tasks within the FCC software.
FCC's task template is similar to a project template and includes a list of specific tasks. Users can add the party responsible for each one, each task's duration and a timeline. They can also define a task's timing based on the closing date. For example, a user might assign an item a timing offset of negative 5, which means the team can start the task five days before the end of the period.
This feature is particularly useful because it gives managers in the accounting department greater control and visibility into the closing tasks to perform before the closing date, which could save the project team time. An administrator can also identify dependencies between tasks, linking predecessors and successors and designating specific items as critical path tasks.
FCC also includes default templates that can serve as a starting point for setting up this process.
When the period closing process begins, an administrator can generate a new task list based on their templates, then release it to their team.
Monitoring and analyzing the closing process
FCC's dashboard offers real-time data about each day of the closing process, with sorting and filtering options to display the information by region, entity or person responsible. Managers can use the analytics capabilities to check on-schedule and overdue tasks, then take a management-by-exception approach, communicating only with the employees whose tasks are overdue or who are facing another problem.
FCC's analytics also give managers insight into bottlenecks and other problems, potentially helping managers streamline or accelerate the closing process. FCC's complete audit trail, which includes completed tasks, when they were performed and by whom, could improve auditability.
Automation with ECC or S/4HANA
Users who operate on-premises SAP ECC systems can choose FCC or AFC to help manage the closing process, but S4/HANA users or SAP users who run multiple systems will probably prefer to run AFC.
FCC and AFC work with non-SAP systems and are candidates for virtually any project that requires a detailed list of tasks, timelines and dependencies. Users whose companies are operating different ERP systems can connect non-SAP systems as well.
However, using FCC or AFC with SAP systems brings some benefits, including the ability to fully or partially automate tasks that are defined and managed in FCC or AFC. With SAP systems, the software hooks that enable that automation are already part of the product. For example, if a task is defined in FCC as a job, FCC can automatically launch the job and feed it the appropriate parameters, such as the company code or period-ending date. In addition, user-managed tasks listed in FCC generally include a shortcut to the proper application for that task.