SAP BPC has many functionalities and features that will meet the business requirements of a company. In this article we are going to discuss the features of SAP BPC for the financial consolidations. Hope it will offer the reader a good perspective on how the BPC is suitable for the process of financial associate.
Let us know the features of SAP BPC.
Currency Translation:
The currency translation is often referred to as the process of converting balances of one specific company or entity from local to global currency representation.
You might think, why is this function essential??
Suppose you have two companies that are subsidiaries of a single parent company. In this, the parent company is an American based company and is required to submit the statements of financial consolidations to the agencies of the US government. Two subsidiaries are located in China and France. Each of these subsidiaries have transactions in the local bodies. We cannot combine them since the rate of exchange between EUR and RMB is not one to one. Hence, in order to offer the consolidated statements of finance we have to convert the currency transactions to the USD equivalent.
Initially, the SAP BPC has good functionality in converting the balances from the local to a global currency (it is a USD that can be established as a presentation currency). There are many steps involved in performing conversion currency at present.
Account Re-class: The accounting reclass is defined as the good delivered function which can be used to offer users the ability in moving a specific balance from an intersection to another form of intersection.
Let us know how it is useful.
Here, we have an example: For many companies after the year end process, there is an existent need in the reclass that presents year’s currency earnings into retained currency earnings. Any form of the money which is calculated at the year-end will represent the total year’s retained earnings as the part of retained earnings in that year.
This currency reclass process is typically happening in the forward classes. One of the best ways of achieving them is by utilizing standard configuration to perform the whole operation.
Consolidations Logic: It is considered as one of the critical pieces of BPA that contains standard functionality. There is often a facility in the BPA to consolidate entries that can be done automatically which is most dependable on the balances and relationships between two different entities.
Let us know why this function is very essential?
Take an example: Let us say we have a total 3 companies like: Parent company owning two subsidiaries (one in France and another in China). We need to produce a consolidated result in order to combine the financials to get a good holistic view of that particular company as one whole thing. But, let us assume the two subsidiaries do business with one another. The Chinese subsidiary is going to sell the products to the subsidiary that belongs to France. Now, both the two companies will have the financial entries that are generated throughout the transactions. Moreover, if we combine the three companies as one together, then that entry is going to include from one room of a house to the next room in the same house. All these types of transactions are required to be taken when all the reporting results have been consolidated.
The facility through the consolidation can be get through the programs like elimination entries to make sure the whole system includes all the types of transactions.
Journals: The SAP BPC acquired from the standard with having the good ability to post all the adjustment journals. The functionality of the journal includes various security options of segregation duties where there is only a single party saving the entire journal entry into the system of approving the journal program to keep track of every individual adjustment who saved the entry that can also be approved. The reports can be run against all the types of journals providing a concise of all types of the journals to make them adjust in detail.
Consolidation Monitor: The consolidation monitor is always there in offering a dashboard area in which the users can monitor the whole process. The functionality of this consolidation monitor will provide business users and administrators an outlook of the entire process cycle or consolidation. They can also identify all the issues by following up the out standard process.
Microsoft Office Add-Ins: Often the SAP BPC is integrated with the MS office applications like PowerPoint, Excel and Word. One of the main functionalities that can be found is Excel add in. It is a process of triggering that can create reports.
Ownership Structure: The SAP BPC can handle the ownership entity structures easily along with good functionality in which the business users are able to adjust how the companies roll up to the consolidation process. Every consolidation way is to be defined in various methodologies and BPC that can be easily defined in the structure.
Interfaces: The interfaces can be used as the setup in the source information from various systems. The systems may be related to the SAP systems or else to SAP systems. The interfaces are very much useful in the custom programming that can be sourced. Suppose you have two companies that are subsidiaries of a single parent company. In this, the parent company is an American based company and is required to submit the statements of financial consolidations to the agencies of the US government. Two subsidiaries are located in China and France. Each of these subsidiaries have transactions in the local bodies. We cannot combine them since the rate of exchange between EUR and RMB is not one to one. Hence, in order to offer the consolidated statements of finance we have to convert the currency transactions to the USD equivalent.
Conclusion:
Hope the above article gives you the detailed information about SAP BPC along with its functionality and features. Feel free to contact Gologica for more details about SAP BPC. Happy Learning!
