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Realign financial period-end closing process – PIKON International Blog

How to realign your financial period-end closing process

How do you get 4 companies to work as 1? How can you make drastic changes and at the same time provide more stability? Challenging questions, to which I want to give you some answers, based on a recent customer case, in which I was the leading Finance Consultant.

When an organizational merger becomes inevitable

Our customer is a world leading company in gas- water- and electricity-metering. A couple of years ago, they were in the process of merging 4 legal entities into 1. These entities were active in different industries and all had their own legacy system and their own accounting department. The business case, or better the necessity to merge, was obvious: it would be cheaper and more efficient to manage and report on 1 legal entity then it would be to do this for 4 entities. The political will to do this was a first hurdle that eventually led to the decision to replace the 4 legacy systems with 1 SAP back-end.

How the merger changed the business processes

The project was run as a roll-out of the SAP template, used by other countries in the group. In particular, the UK office had a specific intricacy: they had several sites with people doing similar activities. Especially in the accounting department, some of these activities needed to be harmonized since there was now 1 system. Also for some tasks, typically period-end-related, responsibilities needed to be centralized: only one function should be responsible to open or close periods, or to run the depreciation for the company. Until that point, harmonization and centralization of tasks had never been an issue in the SAP template of the group but now had become an important requirement for the implementation.

How we approached the need for centralization and harmonization

At first, we organized several sessions to list all the tasks in the different accounting departments. As a second step, the collected tasks were grouped and rated as being local or as a shared task. The people involved in these discussions came from the different sites (key users) and as such all took part in helping build the new basis and shape the new processes for cooperation.

With this list of tasks, classified as local or shared activities, the hard work on how to turn this into a set of working rules and working processes, could start. Therefore, the third step aimed to turn this into a new organizational structure for the accounting departments and putting in place new procedures and new working rules.


How we addressed the Change Management challenges

Implementing and communicating this new set of procedures and working rules seemed even the bigger challenge. Our communication plan included (Management) presentations, documentation and training. Stimulating and motivating the involved people and tracking the progress of this cooperation, however, proved hard because this project took place at different sites between people that did not meet or speak to each other very often.

At a certain point in the project we noticed we needed a catalyst; something that would give structure to the working arrangements and at the same time support them. We found this catalyst in the tool SAP Schedule Manager. It helped us manage and monitor the tasks to be performed during the period-end closing cycle. These were rather complicated tasks and sub-tasks in which the dependency between the different sites became very clear. The tasks had to be performed in a certain sequence and were interrelated. Since they were only executed once per period, the available hands-on knowledge was rather limited. Because of that, users appreciated that not only checklists and documentation on how to perform a task were made available online, but more importantly they could also track if others in the chain had done their steps so they could continue their activities.

A faster and more streamlined period-end closing with SAP

The tool we used was SAP’s Schedule Manager. This is a rudimentary and free version of more advanced tools nowadays, such as SAP’s Financial Closing Cockpit. Meanwhile, SAP has released the SAP Financial Closing Cockpit 2.0, which is actually an extended version of the Schedule Manager. SAP has designed its Financial Closing Cockpit as an SAP ERP add-on for businesses of all sizes. It supports a streamlined, more accurate financial period-end close and helps organizations meet regulatory compliance. With the SAP Financial Closing Cockpit, you can plan and implement your period-end closing cycle across different systems and analyze the results centrally. If you are seeking after a faster and more streamlined period-end closing process, I recommend implementing the SAP Financial Closing Cockpit.

Do you want to benefit from our experiences and tool knowledge? Then click the button to watch the recording of our webinar with demo How to streamline and accelerate your financial close, which took place on 25 May 2016. Together with the financial experts from our business partner FAS AG, we explain the concepts on how to make your closing process more efficient and show you a hands-on system-demo with the SAP Financial Closing Cockpit 2.0.

Webinar + Demo

Webinar + Demo

How to streamline and accelerate your financial close

Watch the recording

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About the author
John Frijns
John Frijns
I am the founder and General Manager of the PIKON Benelux office and operate as a Senior SAP FICO Consultant and Project Manager with a strong focus on interfacing business requirements, IT technology and the involved people. Throughout the years, I have implemented many international projects in Europe and across the world.

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