Month-end closing is a nightmare for finance teams. The financial closing process is tedious, involving struggles with multiple spreadsheets, financial transaction reviews, and a consolidated final statement of preparation.
While finance teams face the challenge of manual month-end closings, a new approach to these challenges is autonomous finance. Businesses are deploying automation and AI within SAP ERP platforms and are transforming financial closing into an intelligent, seamless, and continuous process.
What is autonomous finance, and how does it work in SAP?
Finance Automation promises to simplify this process into an intelligent and continuous operation. This transformation helps businesses that use SAP ERP systems to work faster, more accurately, and with better strategic insights. Gartner reports that 55% of finance leaders want a “touchless close” by 2025, with 86% prioritizing real-time visibility and 64% near-error-free reporting. The data shows that autonomous finance is not just a trend; it is becoming the norm in the industry.
Despite the availability of SAP Finance Automation, 82% of companies still manually coordinate closing tasks, according to SAPinsider. It takes an average of eight days to close books, and many organizations rely on spreadsheets and back-and-forth emails to keep track of the tasks.
Challenges in financial closing cycles
In many large and medium-sized organizations, the closing process usually involves a complicated combination of team collaboration across departments, manual work, programs, and different ERP systems.
Common challenges include:
- Manual and Repetitive Tasks: Traditional financial closing relies heavily on manual data entry, Excel checklists, and tracking through emails, which results in error-prone data and inefficiencies.
- Data Silos: Any process that relies on siloed data faces major complications, and in financial consolidation, using such siloed data from SAP and non-SAP systems complicates ascertaining a single source of truth.
- Limited Real-Time Visibility: Due to the nature of the traditional closing process, it presents limited visibility of the progress and the bottlenecks in the process. This lack of visibility would cause further delays in the closing process.
- Compliance and Audit Risks: As with any manual process, errors are likely to creep into the data, which will affect meeting compliance standards. Teams struggle to meet IFRS and GAAP requirements without consistent workflows and audit trails. Transparency issues can cause errors, missed deadlines, and compliance risks that could harm the entire business.
How does SAP accelerate financial closing cycles using automation?
Finance Automation goes beyond simple automation. It utilizes AI, ML, and advanced analytics to create self-governing financial systems that require little human intervention. Along with repetitive task automation, SAP Finance Automation orchestrates complex workflows, validates data in real time, and provides predictive insights, transforming the
financial close. Solutions like SAP S/4HANA, SAP Advanced Financial Closing (AFC), and the SAP Financial Closing Cockpit enable SAP Finance Automation to accelerate financial closing cycles.
Key Capabilities and Benefits:
- Intelligent Automation: SAP Finance Automation now leverages AI and ML to automate financial workflows. Full automation of intercompany reconciliations, accrual calculations, journal entry postings, and other repetitive tasks is possible. SAP’s generative AI copilot, Joule, lets finance teams use natural language commands for financial tasks. The system lets teams focus on strategic, value-added tasks.
- Continuous Closing and Real-Time Insights: Autonomous systems enable “continuous close.” It automates daily or hourly transaction reconciliation and validation. This automation provides real-time visibility about the financial condition, helping businesses to speed up informed decisions.
- Enhanced Accuracy and Compliance: Automation systems minimize human error by requiring little manual intervention. Furthermore, the structured and clear audit trail for each transaction makes it easier to stay compliant, thus ensuring the organization is always “audit-ready.”
- Centralized Control and Visibility Tools: The SAP Financial Closing Cockpit and SAP Advanced Financial Closing (AFC) bring together, track, and oversee the closing process for different parts of the business and systems. This feature provides visibility and ensures timely completion and coordination of tasks.
According to a recent IDC study, companies that used SAP’s automation solutions were able to:
- Completely automated 83% of tasks
- Gained 12% efficiency among finance teams
- Achieved faster reconciliations by 18%
- And an 8-month ROI of 474%.
These numbers indicate that SAP Finance Automation is a smart financial investment and a strategic advantage because it gives you real-time insights and makes your workflow more efficient.
From Theory to Practice: Success with Autonomous Closing
The move to an autonomous close is not just a theoretical concept. Businesses are already seeing big benefits. For instance, Pfizer, the biopharmaceutical giant, used the SAP S/4HANA Cloud solution for advanced financial closing to automate and manage the monthly close for more than 400 entities around the world, making a very complicated process easier and more centralized.
Similarly, BlackLine customers have cut closing times by up to 60% and automated 90% of all closing activities thanks to SAP Finance Automation.
The Future of Finance Is Autonomous.
Using SAP Finance Automation is more than just implementing new systems; it’s about unlocking new opportunities. People have considered finance teams to be those who keep track of numbers for years. They were always in the back office, buried in spreadsheets and reports. But that’s changing. Today, they’re taking on a new job as strategic storytellers who turn data into direction and insights into impact. Automation takes care of the hard work, so finance professionals can focus on what really matters: improving the business better in the future.
Still, 52% of finance leaders say that data quality and reliability are the biggest problems with adopting autonomous finance (HSO Global Finance Report). Closing this gap will be key to building future-ready finance teams. Because today, the question isn’t if you should move toward autonomous finance. It depends on how fast you can get there and how fast
you can get there to stay ahead. Evoke’s in-house experts for SAP Finance Automation can help your business with finance automation.