Using a standalone application to manage the finances of the average mid-size company is difficult at best and simply impractical in many cases. The level of difficulty is magnitudes higher for a rapidly expanding organization with multiple subsidiaries that has to deal with the challenges of shared data and intercompany transactions.
SAP Business One is an ERP solution that is engineered to handle these challenges by managing intercompany transactions and automatically replicating corresponding transactions across multiple parent company and subsidiary databases.
The SAP Business One integration solution has several key functionalities:
- Master data replication to facilitate content sharing
The solution supports seamless integration of master data across a host of business partners, including payment master, freight master, currency master, business partner, master data, item master data etc.
- Support for diverse processes across multiple business entities
The solution automatically creates a standardized, reciprocal intercompany transaction of another business unit in a highly transparent manner.
- Improved collaboration across business entities
This collaboration include functions that give a business control over activities that originate from other units, including consolidated credit limit check, business transaction notifications and intercompany workflows.
- Improved operational visibility including financial consolidation across business entities
The powerful financial consolidation feature allows journal entries from different branches to be consolidated into a single record to facilitate easy reporting and decision making. This consolidation falls into several formats.
Operational Visibility and Financial Consolidations
Operational visibility and risk management are critical considerations for any business that owns multiple operational units. Financial consolidations help improve operational visibility by aggregating financial information from different business subsidiaries into a cohesive set of financial statements.
Business processes and interactions can go wrong and cause serious disruptions and losses when various systems are disconnected from each other. For instance, data that is consolidated and centrally located can help a stock manager in a large online retail operation to track and fulfill customer orders, while the accounts manager has updated information about all the SKUs available.
SAP Business One is capable of performing multilevel financial consolidations that include:
- Consolidation of companies that operate under different local currencies and different chart of account structures.
- IFRS to GAAP adjustments.
- Consolidation of individual company accounts based on average exchange rates, closing exchange rates or historical exchange rates.
- Consolidations to reflect minority interests of companies within the group.
- Setting up a multi-level consolidation hierarchy to facilitate group-level reporting.
Additionally, SAP Business One is able to run the consolidation process using pre-defined schedules.
Running SAP Business One
SAP Business One is a highly flexible solution that can be easily configured to run on both small and mid-size operations. Businesses can set up the entire solution from a central web-based module, thus eliminating the need for individual configuration for every participating company.
A small company may have fewer units they need to consolidate or reconcile, or perhaps no currency conversions at all. In such a scenario, that business can integrate SAP Business One live to deliver a valuable real-time performance with no risk of overloading the server with too many queries.
If, on the other hand, the company has a bigger operation with many units that require multiple adjustments and reconciliations, that business can design a system that queries data from an online analytical processing (OLAP) platform or a data warehouse that can connect to SAP Business One to facilitate higher performance.
All that would remain is the need for an OLAP platform that connects dynamically to SAP Business One to create a multi-dimensional database for reporting and analyzing. A good OLAP should map automatically to SAP Business One’s General Ledger while allowing any changes and updates to occur dynamically.