SERVICE ACCRUAL MANAGEMENT

This project revolved around the implementation of an accessible and efficient solution tailored for a finance team at an oil & gas company to estimate and post service accrual amounts effectively. Previously, the finance team faced challenges with extensive manual calculations on a monthly basis. Their primary task involved determining accrued services yet to be submitted or expected, requiring a high degree of accuracy to satisfy stakeholders.

However, this process was laden with manual efforts, relying heavily on assumptions and limited data sources. The subsequent sections will delve into the transformative journey undertaken by the team, elucidating the pivotal role played by the solution in mitigating manual labor and enhancing accuracy in financial estimations.

The current period end close occurs between two to eight days after the end of the month. The month-end process is currently done manually and requires a significant amount of time. It heavily relies on information and estimates provided by vendors toward the end of the month. Additionally, there is inconsistency in processes among key business groups.

One of the world's largest producers of synthetic crude oil from oil sands and the largest single source producer in Canada has joined the organization. This entity has a mandate to close its period end within two days, which was previously facilitated by a tool called CDMS (Contractor Database Management System). However, this tool is not compatible with S/4HANA and SAP Fieldglass.

• Deployed the Service Accruals Management application to support the required 2-day period end close. 
• Automated Service accrual estimation and assignment to cost objects according to predefined rules 
• Enabled the finance team to validate, adjust and post accruals into S/4HANA   
• Supported reposting of accruals for up to 3 past periods. 
• Facilitated reporting of estimated figures and posted figures 

Prior to the solution, reconciliation processes took an extensive amount of time, with an average duration of eight days post-month end. This reconciliation effort involved collaboration among multiple personnel across various departments. Despite concerted efforts, the accuracy of the results was compromised due to communication gaps and reliance on manual processes, necessitating the use of assumptions.

Following the deployment of the application, significant enhancements were observed. The reconciliation process, which previously consumed eight to 10 days, was streamlined to 15 to 20 minutes. This remarkable reduction in time expenditure signifies a transformative shift in operational efficiency. By minimizing manual intervention and enhancing communication channels, the application facilitated swift and precise reconciliation, thereby optimizing resource allocation and improving overall productivity.