SAP Solution Overview SAP Business Suite

SAP® ERP FINANCIALSENABLING FINANCIAL EXCELLENCE

ESSENTIAL ENTERPRISE BUSINESS STRATEGYPROVIDING A SOLID FOUNDATION FOR ENTERPRISE FINANCIAL MANAGEMENT

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The SAP® ERP Financials solution, which is part of SAP Business Suite soft-ware, delivers a complete, integrated financial management solution to ensure compliant, predictable business performance. An essential building block of your enterprise business strategy, SAP ERP Financials provides a solid foun-dation to expand your business, realize greater efficiencies across key finan-cial processes, and help ensure compliant and accurate accounting and financial reporting.

“Even before Sarbanes-Oxley was passed, SAP ERP Financials gave us the support we needed to ensure our financials were well controlled, documented, and reconciled.”

John Barron, Chief Financial Officer, Cole Haan

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SAP® Business Suite software enables enterprises to execute and optimize their business and IT strategies. Its modular software is designed to work with other SAP and non-SAP software to provide broad support for an organization’s essential business processes. Organi-zations and departments in all sectors

can deploy the software in a stepwise manner to address specific business challenges on their own timelines and without costly upgrades. SAP Business Suite provides better insight and visibili-ty across organizations, improves oper-ational efficiency and effectiveness, and increases the flexibility to address business change.

Through its core applications, SAP Business Suite supports all essential business processes, including custom-er relationship management, financial management, human capital manage-ment, asset management, product life-cycle management, supplier rela-tionship management, and supply chain management. SAP Business Suite ap-plications are built on service-oriented architecture (SOA) to help companies adapt to accelerating change. Powered by the SAP NetWeaver® technology platform, they give companies the oppor tunity to integrate their value chains, leveraging SAP and non-SAP solutions.

SAP ERP Financials: A Foundation for Expanding Your Business

During this time of economic uncertain-ty, a company’s decision makers need to know that the information they receive is both current and accurate. To achieve this, your business must estab-lish a single version of the truth for all its employees. The SAP ERP Financials solution can help. Besides letting you streamline financial processes, opti-mize working capital, mitigate financial risks, and comply with global financial reporting standards, the software offers robust financial and managerial accounting and reporting functionality to support confident decision making. Over 20,000 global companies rely on SAP to provide the foundation for their financial management requirements.

SAP® ERP AND SAP BUSINESS SUITEBROADENING YOUR VISION TO SIMPLIFY AND INNOVATE

During this time of economic uncertainty, a compa-ny’s decision makers need to know that the informa-tion they receive is both current and accurate. To achieve this, your business must establish a single version of the truth for all its employees. SAP ERP Financials can help, offering robust financial and managerial accounting and reporting functionality to support confident decision making.

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Not very long ago, the scope of a finance organization’s responsibility was limited to managing financial trans-actions and generating periodic finan-cial statements and management reports. Today business is more com-plex. We live in a global economy with financial professionals expected to meet a far wider range of challenges than ever before.

As a financial professional, you must produce accurate, timely financial re-ports that satisfy global accounting and regulatory compliance standards that vary by industry and by country. Your financial management software must support internal controls and compli-ance standards to help ensure trans-parency of your company’s accounting practices. On top of that, you need its support in streamlining critical financial processes, such as the financial close cycle, accounts receivable, accounts payable, and cash and financial risk management.

Business decision makers today have a greater need for relevant, accurate in-formation than ever before. Inaccurate or out-of-date reports can lead to bad decisions. Executives, managers, and frontline employees require integrated reporting tools that give them the pow-er to quickly identify the factors impact-ing the business and help them make decisions that improve performance. Together with the SAP BusinessObjects™ portfolio, SAP ERP Financials offers powerful functionality that meets your most demanding accounting and finan-cial reporting requirements.

In addition, finance professionals need to manage the cash conversion cycle and overall working capital more effi-ciently. Through automation and greater insight into the accounts receivable and accounts payable functions, business-es can improve cash flow, reduce days sales outstanding, optimize working capital, and mitigate financial risks.

In short, finance professionals must manage increasing complexity. SAP provides the comprehensive financial management software you need to help your finance organization harness this complexity while gaining key insight that leads to better business performance.

YOUR BUSINESS AND THE GLOBAL ECONOMYHARNESSING FINANCIAL MANAGEMENT SOFTWARE THAT KEEPS PACE

Business decision makers today have a greater need for relevant, accurate information than ever before. They require integrated reporting tools that give them the power to quickly identify the factors impacting the business. Together with the SAP BusinessObjects portfolio, SAP ERP Financials offers powerful functionality that meets your most demanding accounting and financial reporting requirements.

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From the knowledge gained from thou-sands of successful customer imple-mentations, SAP has enhanced SAP ERP Financials with functionality sup-porting best-practices for the financial management requirements of compa-nies in more than 25 industries. This delivers to you best-in-class support for your industry-specific core accounting and financial reporting processes. But the software’s reach is much broader. It gives you the ability to collaborate across organizational boundaries on a single platform that brings unprece-dented efficiency to your financial pro-cesses through end-to-end process integrity.

In conjunction with SAP partner solu-tions, SAP ERP Financials can support enhanced processes such as cash management, financial risk management, invoice management, and the financial close and reporting cycle. Because they integrate with your core account-ing applications in the SAP ERP appli-cation, SAP partner solutions can help support reporting and compliance re-quirements. SAP ERP provides a com-plete analytical platform to consolidate business data, giving you comprehen-sive and timely insight into critical busi-ness processes. And because SAP ERP is a single, integrated solution, finance professionals have access to complete-ly reconciled data across your key financial business processes.

FOCUSED FINANCIAL MANAGEMENTGAINING INDUSTRY-SPECIFIC SUPPORT FOR CORE ACCOUNTING

“With SAP ERP, we have realized the complete automation of our accounting process. Now we can perform monthly closing within one to two hours, instead of the one to two days of manual work required before we implemented thesolution.”

Zhenhai Wang, CIO, Phenix Optics Co. Ltd.

Financial professionals, executives, and managers need tools that adapt to the way they work and to the needs of their business. They want intuitively designed solutions that require minimal training and respond flexibly to the change inev-itable in the business world today. And they require software that supports complex business processes in order to gain greater efficiency and effective-ness. Whether you are a regional busi-ness or a multinational corporation, the SAP ERP Financials solution gives you that and more. Because it is based on SOA, SAP ERP Financials allows you to deploy business solutions more quickly to flexibly manage your company’s vital financial processes.

Financial and Management Accounting

The SAP ERP Financials solution is designed to support the most complex financial requirements of global compa-nies. It helps ensure accurate financial accounting and reporting in accordance with global financial reporting standards such as generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). It helps streamline financial transaction processing. The SAP General Ledger application forms the foundation of ac-counting transaction processing and re-porting, while SAP ERP Financials pro-vides support for accounts receivable, accounts payable, fixed assets, inven-tory, and cash accounting. These sub-ledgers are completely integrated with SAP General Ledger, so your financial data is always reconciled and your re-ports are completely accurate. This helps

avoid having to restate financial results and reduces the cost and effort of the financial close and reporting cycle.

To support managerial reporting re-quirements, SAP General Ledger lets you allocate costs to the necessary business segments through document splitting. As a result, balanced and rec-oncilable financial statements can be generated by any dimension of the business – unit, profit center, or geo-graphical location. SAP ERP Financials helps reduce the complexity and cost

of parallel accounting and managing multiple sets of books – by region, in-dustry, or financial reporting standard. It all rolls up to a single lead ledger, with managerial and financial accounting reconciled within a single application.

Financial Supply Chain Management

Cash is the lifeblood of every company, and to ensure a healthy cash flow from its commercial operations, a company must apply rigorous control over

A SOLUTION THAT RESPONDS TO CHANGE SUPPORTING FINANCIAL BUSINESS PROCESSES

Financial professionals, executives, and managers need tools that adapt to the way they work and to the needs of their business. They want intuitively designed solutions that require minimal training and respond flexibly to the change inevitable in the business world today.

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customer trade credit evaluations and accounts receivable. The SAP Financial Supply Chain Management (SAP FSCM) set of applications can help your com-pany more effectively manage the credit-to-cash cycle, reduce days sales outstanding, and minimize bad debt expense. Through robust information sharing, collaboration, and workflow, SAP FSCM helps you optimize working capital processes through automated credit management, electronic bill presentment and payment, collections management, and billing dispute management.

Treasury Solutions

Treasury professionals face challenges to optimize liquidity and protect company revenue streams and asset values by managing cash and financial risk more effectively. With treasury applications from SAP, you can manage the complete spectrum of cash, liquidity, and financial risk though greater transparency, con-trol, and more effective decision mak-ing. Advanced analytics help finance professionals accurately assess interest rate, foreign exchange, and commodity price risk and employ hedging strate-gies to mitigate them. In addition, SAP treasury applications are completely in-tegrated with SAP General Ledger to help ensure transactions and positions are accurately recorded and properly reported in accordance with global fi-nancial reporting standards.

Improve Performance Management

Combine the power of SAP® BusinessObjects™ solutions with the SAP ERP Financials solution to support all your performance man-agement requirements. Provide your executives, managers, and informa-tion workers access to timely, per-sonalized information and key perfor-mance indicators in their own work context. Give them the tools they need to gain insight for effective decision making. Take advantage of SAP ERP Financials, a solution that can give broad analytical support drawn from a rich selection of SAP software as well as non-SAP software.

Extend Financial Management

SAP BusinessObjects enterprise per-formance management solutions and SAP BusinessObjects governance,

risk, and compliance solutions extend your financial management require-ments into critical areas of reporting, compliance, and operational risk management with best-in-class financials applications that include:• Consolidation and reporting• Planning, budgeting, and

forecasting• Performance management and

scorecards• Governance, risk, and compliance

Put the power of integrated perfor-mance management and enterprise-wide analytic functionality on the desk tops of your information workers to improve decision making on all levels. Serve the needs of your fi-nance professionals – your accoun-tants, financial analysts, credit managers, and accounts receivable managers – with embedded analytical applications that deliver role-specific key performance indicators and performance information.

Financial professionals, executives, and managers need tools that adapt to the way they work and to the needs of their business. They want intuitively designed solutions that require minimal training and respond flexibly to the change inevitable in the business world today.

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YOUR KEY BUSINESS ACTIVITIESSUPPORT FOR THE PERFORMANCE MANAGEMENT CYCLE

The SAP® ERP Financials Solution Supports Key Business Activities

Business Area Activity Supported

Performance management Use the SAP® ERP Financials solution in combination with SAP BusinessObjects™ solutions to: • Define overall company goals and departmental objectives and monitor performance

against them during execution• Generate consolidated financial and managerial reports for globally distributed

businesses by aggregating financial data from SAP and third-party software • Perform ad hoc queries and measure operational performance using real-time

transactional data and metrics • Analyze cash and liquidity requirements, forecast cash, and manage financial risks more

effectively• Jump-start operational planning tasks such as cost center planning, sales planning,

traditional budgeting, and collaborative express planningFinancial and management accounting • Determine inventory value according to country-specific accounting standards

• Record goods movements in up to three currencies and carry inventory values in two additional currencies

• Generate a balanced set of books by business unit, profit center, or any other organizational reporting dimension

• Analyze profitability by various dimensions such as product, market, customer, service, or channel

• Streamline the financial close and reporting cycleFinancial supply chain management • Collaborate effectively to resolve billing disputes and account collections

• Streamline and automate customer credit decisions • Automate the receivables and payment processing using Web and electronic payment

standardsTreasury management • Forecast cash and manage company liquidity

• Reduce the complexity of interunit cash transfers and international banking transactions• Model the current and future market environment, perform thorough risk analysis before

making investment decisions, and measure hedging effectiveness• Achieve straight-though processing through electronic payment processes and

cost-effective electronic bank integrationsCorporate governance Use SAP BusinessObjects governance, risk, and compliance solutions to:

• Identify internal control gaps to reduce risk of noncompliance• Integrate automated control testing results into control reporting to reduce duplicate work• Provide auditors and management with increased visibility and direct access to control

tests, results, and remediation plans

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SAP ERP Financials provides a com-plete, integrated financial management solution to effectively fulfill the most complex accounting, financial supply chain, treasury, and corporate gover-nance requirements. It supports inte-grated financial and performance man-agement, smart decision making, and collaboration among financial profes-sionals, executives, and managers. As a facilitator of financial transformation, SAP ERP Financials reduces transac-tion processing and administrative workloads, allowing financial profes-sionals to concentrate on value-adding activities.

Here are some ways you can maximize your ROI using SAP ERP Financials.

Increase your insight for better decision making and predictability by:• Improving managerial accounting

support and your ability to generate reports on any business dimension

• Leveraging performance manage-ment tools to deepen your under-standing of activities across the entire value chain

• Improving the quality of business planning, decision making, and per-formance analysis

• Gaining access to relevant and timely information

• Identifying performance issues early and correcting them proactively

Improve the productivity, efficiency, and responsiveness of your business by:• Automating financial and managerial

accounting processes and streamlin-ing the financial close and reporting cycle

• Reducing operating costs of the fi-nance function

• Extending the reach of financial busi-ness processes to more people with-in and beyond the enterprise – includ-ing customers, suppliers, and partners

• Decreasing collections and billing dis-pute processing costs through im-proved collaboration and workflow – an improvement that can account for 60% of total finance department costs

Optimize your company’s cash flow by:• Improving credit and collections

processes• Making receivables management

more efficient• Utilizing powerful analytics to model

future cash flows and financial risks, more accurately forecast liquidity, and reduce banking costs by pooling global cash positions

• Leveraging enhanced electronic con-nectivity to manage your organiza-tion’s banking relationships and pay-ment processes

• Using streamlined information ex-change to benefit from up-to-the-minute visibility of cash positions and accelerated cash reporting

Improve financial compliance and corporate governance by:• Giving managers better visibility of

company performance to help them improve profitability and manage risk better

• Supporting global financial reporting standards such as IFRS and GAAP

• Providing a mechanism for internal process controls for financial report-ing that includes support for docu-mentation, testing, workflow, and quality sign-off

The Right Application Architecture

The SAP NetWeaver technology plat-form enables organizations of any size to implement SOA as the basis for in-novative business processes – result-ing in better planning, improved perfor-mance management, and faster reactions to changing business require-ments – by supporting the following actions:• Deploying analytical applications tai-

lored to the individual user’s role• Integrating electronic payment and in-

voicing services into portals, enabling secure self-service and collaboration for customers, partners, and suppliers

• Modifying general ledgers without im-pacting financial consolidation or re-porting processes

• Organizing consolidation processes according to the needs of individual business units

• Coordinating budgeting and planning processes intuitively, eliminating the need for end-user training and simpli-fying individual spreadsheet consolidation

• Enabling process owners and manag-ers to document, test, and report on the effectiveness of the organiza-tion’s internal controls

• Managing relationships with banks to track payment life cycle and reduce the number of exceptions

• Helping credit managers control cred-it risk by monitoring overall credit lim-its without impacting customer relationships

A COMPLETE FINANCIAL MANAGEMENT SOLUTIONREDUCING TRANSACTION PROCESSING AND ADMINISTRATIVE WORKLOADS

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A Proven Financial Management Solution for Organizations in Every Geography and Industry

SAP ERP Financials enables you to manage your business more effectively by supporting improved decision mak-ing in financial and managerial account-ing, financial supply chain management, and treasury. With over 26,000 installa-

tions worldwide, SAP ERP Financials is the proven choice for best-run busi-nesses. Regardless of size or industry, all companies gain from this robust, integrated financial management solu-tion. It includes a solid foundation for growth, better visibility and control over all financial management processes, support for global business require-ments, and a framework for sustainable

corporate governance. For additional information on how SAP ERP Financials can help your company become a best-run business, please visit www.sap.com/financials.

BENEFITS AT A GLANCEIDENTIFYING OPPORTUNITIES TO SET STRATEGY

The SAP ERP Financials solution is designed to support the most complex financial requirements of global com panies. It helps ensure accurate financial accounting and reporting in accordance with global financial reporting standards such as gener-ally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS).

Activity Benefi t

Financial and management accounting • Accelerate financial closes• Increase accuracy of financial reporting• Maintain balanced books reflecting any business dimension• Comply with international and local accounting standards

Financial supply chain management • Decrease costs for billing, collections, and payment activities• Reduce receivables risk• Increase customer, partner, and supplier satisfaction

Treasury management • Manage financial risk • Forecast liquidity• Measure future cash flows• Maximize investment returns

Performance management • Expand the business • Monitor performance against key performance indicators and benchmarks

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