How Will You Manage Regulatory Reporting on SAP® S/4HANA?
Utilities considering the move to S/4HANA are starting to ask good questions about regulatory reporting: What is delivered standard? What will happen to our old regulatory accounts? Will reporting be less of a hassle on S/4? How much faster and transparent will it be?
In our experience, treat you’d probably like to keep your utility chart of accounts but make them available more timely than before, perhaps even in real-time. You’d also value visibility into transactions for each regulatory account, not just balances. And you’d want the option to allocate financial line items to multiple regulatory accounts, and to adjust those line items quickly while maintaining the highest data integrity.
You already understand that S/4 is lightning fast and eliminates batch processing. But will transaction inputs be granular enough to comply with regulatory requirements? Since you don’t use FERC, NARUC, or AWWA accounts on front-end transactions, you’ll still need some way to get them into the GL on the back-end. How will you do that on S/4?
Introducing HPC DECIPHER
For utilities considering SAP® S/4HANA, HPC DECIPHER is the real-time regulatory financials application that provides the most comprehensive translation, allocation, adjustment, reporting, and forensics natively on S/4. We developed DECIPHER based on our 20+ years of experience supporting utilities and innovating software solutions to enhance SAP Financials — including the original “FERC module” in the mid-1990s.
DECIPHER delivers greater accounting transparency, stronger rate case positions, and improved back-office efficiency by combining the most relevant features from our previously proven solutions for utilities on SAP—HPC UFA, HPC RTFS, HPC JETS, and HPC CFF—into an S/4HANA-native package. And the icing on the cake for some of you? HPC DECIPHER lets you eliminate the legacy FERC module from your S/4HANA design.
- Translates GAAP to Regulatory accounts in real-time, directly in S/4HANA
- Portions line items to multiple regulatory accounts
- Allocates common costs by utility code
- Generates full Financial Statements with drill down to all regulatory line items
- Eliminates need for lump-sum journal entries that lose valuable transaction details
- Enables easy, controlled reversal and reposting of regulatory data
- Improves responsiveness to regulatory inquiries, and strengthens rate case positions
- Establishes one version of the truth between GAAP and Regulatory views
- Requires SAP S/4HANA On-Premise Edition 1511 or 1610; or S/4HANA running in a private or hybrid Cloud
- Runs natively on the SAP Universal Journal
- Supports “greenfield,” “brownfield,” and SLT migration to S/4HANA
- No SLT replication, custom fields, coding block changes, or additional hardware required
- Eliminates need for the legacy FI-RRU (“FERC”) module
- May be implemented as part of a new S/4HANA installation, or integrated with already-live S/4 systems (with functional areas already active) by enabling retroactive posting of regulatory data
- Failsafe trace of every single dollar in the regulatory range
- Translation of fixed asset sub-ledger to regulatory accounts (e.g., 300 series for FERC)
- Reassembly of all business object cost flows traced from start to finish
- Supports a faster month-end closing cycle and improves the efficiency of Accounting, Finance, Rates, IT, and Operations
- Allows Administration and Field Operations to enter financial transactions in terms they understand, very efficiently and without any knowledge of regulatory accounting
- Generates automatically and in real-time the incredibly rich cost detail that Rates needs to strengthen rate cases, which is more granular than the original inputs from time entry, requisitions, purchase orders, and expense reports entered by employees in the field
- Helps Accounting make the highest-integrity line-item adjustments of any scale directly in S/4HANA, both before and after allocations, while preserving all original transaction detail
- Identifies all cost flows traced from start to finish—and in reverse—with drill-down to details
- Creates an opportunity to eliminate costly third-party fixed asset solutions by translating the fixed asset sub-ledger to regulatory accounts directly in S/4HANA
- Reinforces the business case for S/4HANA adoption, and boosts the ROI from S/4 systems by using key functions of the Universal Journal and Central Finance
Speed and Granularity without Compromise
While other approaches to “real-time” FERC on SAP S/4HANA tout the immediacy of regulatory data, those designs are only as good as the level of detail they provide. Summarized data does not often meet Rates’ needs to respond to regulatory interrogatories or support rate cases. If a real-time FERC solution is limited to line item amounts by natural (GAAP) account and Functional Area, it will not likely be detailed enough for utility reporting requirements.
In contrast, HPC DECIPHER not only populates FERC accounts in real-time as each transaction is entered, but also generates the highly detailed cost data that Accounting and Rates need—all automatically, without Admin and Field Operations having to know anything about FERC.
In this manner, HPC DECIPHER delivers on the promise of real-time FERC without compromising the granularity that utilities must have to properly functionalize their cost of operations.
To learn more about implementing HPC DECIPHER on your S/4HANA server, please contact us.