SAP S/4HANA has incorporated robust automated and monitored internal controls into the area of finance that covers cash management.
These controls elevate Sarbanes-Oxley (SOX) and other compliance regulations, and provide assurance on internal controls over financial reporting (ICOFR). The internal audit team (including those who specialize in SOX) can review and test the operating effectiveness of these controls with significant efficiency by obtaining audit evidence and documentation. External auditors can review these testing results and working papers to evaluate the operating effectiveness of the ICOFR.
In this blog post, I’d like to examine these controls to help you understand their robust design and teach you how they provide assurance to management.
Bank Account Reviews
The decentralized model of most businesses allows subsidiary companies to establish new bank accounts. This presents substantial risk if accounts are opened with banks that lack a strong standing and reputation for anti-money laundering measures. There must be a well-articulated policy on bank account management that guides subsidiary companies to perform due diligence before opening bank accounts. The bank account review sheds light on this risk exposure.
This monitored control provides significant global visibility and detail relating to bank accounts. The review is typically done closer to the end of the year, although it can be performed at periodic intervals determined by the treasury.
The process is triggered by an initiator and routed through the system to a designated reviewer through the SAP Fiori launchpad. The reviewer verifies the existence of any authorized bank accounts opened worldwide. They can monitor opened, changed, and closed bank accounts, as well as document audit notes for use by the initiator. While this happens, the initiator has the visibility to track its status and review notes.
If it is determined that a bank account should be closed, it should remain closed and only be reactivated upon authorized approval. The general ledger account that represents closed bank accounts should then be blocked for postings. You can configure and introduce a “GL posting date” block that will automatically reject any future postings.
Centralized Bank Relationship Management
The bank relationship management SAP Fiori app provides global visibility of all bank accounts and master data to both treasurers and bank accountants. In leveraging this feature, you can implement automated internal controls for opening, changing, and closing bank accounts through workflow processes and authorized approvals.
Payment Signatures
This feature allows single or multiple signatures to be required for payment approval. It provides both sequential and non-sequential patterns. You can design the control with segregation of duties for high-value transactions, which helps to reduce fraud risk. This functionality is integrated with the bank communication management approval process.
The approval process can be customized to enhance internal controls such as including an HR person as a signatory for a payroll bank account. You can also set their permission to end if they leave their position and a new signatory comes on—the approval process selects eligible signatories based on validity periods.
Document Management App
This feature allows businesses to upload critical documents such as board approval, signatories’ information, and related correspondence to support opening, changing, and closing bank accounts. The auditor will have access to all these documents. In the case that an account is closed, an email can be generated to record changes in the system.
Bank Accounts Revision Process
Master data for bank accounts are changed through a process known as bank revision. All changes to the master data, such as creation of bank accounts, modifications, and closing, are to be reviewed and approved before activation and implementation of revisions. The activation is done through dual control approval or approved through a predefined SAP business workflow.
This feature incorporates segregation of duties required for robust internal control. Until the revision is activated, the bank account cannot be used to make payments. Fields in the master data that are considered sensitive fields can be configured to trigger dual control process.
Electronic Bank Statement (EBS)
This feature enables the automatic download of any relevant electronic bank statement (EBS) files via SAP Multi Bank Connectivity. This allows you to directly record and post bank transactions into cash accounting within the General Ledger. The SWIFT, SEPA, and BAI2 formats are acceptable in this case.
EBS are downloaded daily or intraday and monitored by country, with reprocessing occurring for any corrections and missing items. Then, via command, a copilot displays these items for you to review each of the items and find what still needs to be done.
Non-Key Control for Check Management
This function helps to manage both pre-numbered, printed checks as well as your own internal number range.
Touchless Payment Solution
The payment medium file that is exported after performing invoice verification, tolerance limit, or a 2- or 3-way match can be transmitted to your bank automatically through SAP Multi Bank Connectivity. The advanced cash operations feature enables you to integrate a payment approval workflow into your solution. The payment batch file will need to be approved by signatories before it reaches the house bank.
Variance Analysis Control
The Cash Flow Analyzer apps help to identify and analyze drivers for variance between the forecast and actual. These reports can be built into a dashboard and shared with management for review and approval.
Conclusion
Automated and monitored internal controls in SAP S/4HANA provide a powerful foundation for both regulatory compliance and operational integrity. From initiating secure bank account workflows to enforcing payment approvals and analyzing cash flow variances, these features strengthen financial transparency and reduce risk across the enterprise.
By embedding these controls into everyday processes through SAP Fiori and workflow automation, organizations can ensure consistent oversight, meet audit requirements with ease, and empower treasury and finance teams to work more efficiently. As regulations evolve, these tools offer the agility and assurance needed to stay ahead while keeping your cash operations secure and compliant.
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