SAP Disclosure Management and the benefits of automated financial reporting

7 December 2017

Justyna Tarkowska

Justyna Tarkowska


In the age of automation, assembling and reviewing financial reports should be a thing of the past. Justyna Tarkowska, our resident Enterprise Performance Management (EPM) expert, explores the potential of SAP Disclosure Management (DM) to make the reporting process more efficient.

Let’s start with what companies do today. Currently, some companies manually assemble and review financial reports, which requires both time
and money. So, is there a solution? The implementation of SAP Disclosure Management (DM) could be the answer; supporting businesses by automating the data gathering process from multiple sources.
So, what real impact does the implementation of DM have? According to Gartner and SAP, auto-generated financial statements result in approximately a 30% reduction in operating costs and lead to 31% faster financial close. To put this into context, we explore the challenges faced by one of our clients prior to DM implementation and uncover the post-installation benefits. 

The challenges 

While the finance team at the multinational holding company had clearly defined regulatory deadlines, they struggled to align their limited resources to achieve them in time - without disrupting other daily responsibilities. This was problematic, especially during the year-end, when all accounting data had to be finalised in a short period of time.

The client used Excel to bring together the key figures from their financial and consolidation system and entered the narrative with the corresponding figures manually. Because the process involved cutting and pasting the text from last year’s annual statement, and used email systems to track approvals of file versions, it resulted in inconsistent edits, errors and endless manual adjustments. Wanting to simplify the reporting process, they decided to implement the SAP DM tool. 

The solution

The DM solution was integrated with SAP Financial Consolidation (FC). Reporting data was pulled into the DM system via report bundle extracts from FC, as well as EPM add-in reports to achieve full automation of the data flow. A significant part of the project involved mapping data to information sources from a broad range of enterprise and external information sources.

Additionally, we had to automate and streamline a variety of pervasive manual processes and controls. This enabled reporting professionals to focus on information analysis and communicating corporate performance. SAP DM provided a comprehensive and detailed audit trail to the client, something which current reporting tools lack. The implementation of the project comprised of the preparation of primary statements and notes that shorten the financial close process. The client also benefited from DM’s formatting capabilities, which brought their financial statements to a final published version. 

The benefits

Saving time. The implementation of DM resulted in time-savings. The process of bringing together the financial information with a narrative allowed for a more streamlined approach to the production of the annual report. The DM system leverages Microsoft Office as a tool with an add-in which helps to maintain a single version of the truth. Any last-minute changes are managed dynamically because every number is linked to the underlying data source.

Improved efficiency. Now, users can link source data to report data by combining data from multiple systems. Users can also place them in a data repository within DM and set rules for creating reports. The link to the source system was completed in the initial set-up, using a link to FC consolidation system. During final run, members simply click the button to refresh the data. The process of gathering data and generating reports is significantly faster, so employees can focus on other important duties.

Reporting prepares businesses for audits. Automated financial reporting solutions ensure that reports are following business processes and are managed by assigned stakeholders. Team members can review only their sections, which further ensures that others cannot make conflicting edits. This functionality creates a tight audit trail which allows users to compare versions of a document to see who made the changes and approvals. Workflow capability facilitates the group collaboration by notifying all members about the document changes – what they were and when they occurred.

Automated reporting saves money. We’ve touched on cost savings; but how does a solution like SAP DM help? Well, it not only reduces the workload for employees who often report overtime hours when reports are due but also publishing costs. The format of the reports can be set up directly within the SAP DM tool according to the publisher’s requirements. Once set, it serves as a template for next years' reports and beyond. 

Automated reporting reduces risks. One of the drawbacks of outsourcing publishing to third parties was the risk of last-minute adjustments resulting in inconsistent information between the final versions of financial statements. With an automated financial reporting tool, all data is linked back to original data sources providing a consistent and transparent system. 

Future developments

The SAP DM reporting solution can be leveraged yet further. A business can save time and money, while boosting the productivity of its operations by setting up a SAP DM starter kit for IFRS and GAAP requirements. SAP DM supports international accounting standards through its built-in functionality for XBRL tagging for Excel and Word. XBRL tagging is also enabled and can speed up submissions to tax authorities. This functionality applies to business entities located not only in Europe, but also in the US and Asia, namely China and India. 

Interested in the possibilities of SAP DM? Why not discuss this with a member of our team? Drop us a line here.

About the author

Justyna Tarkowska


Bluefin and SAP S/4HANA - welcome to the one horse race

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