FERC Reporting Options on SAP

Utilities on SAP, learn everything about FERC reporting options on SAP S/4HANA and SAP ECC at next week's SAP for Utilities conference in San Diego. HPC America will share its 25 years of experience in utility accounting and the SAP ERP.

On Tuesday, Oct. 22 at 1:10pm, HPC's customer Salt River Project will present its case study about FERC optimization and preparation for migration to SAP S/4HANA. SRP implemented HPC Utility Financials Accelerator (UFA) in 2018 in order to eliminate reconciliation differences between GAAP and FERC, speed up the monthly trace, and improve other regulatory reporting processes and results. HPC UFA is a NetWeaver-based add-on software solution that eliminates the delivered FERC module's inherent limitations, and runs on both SAP ECC and SAP S/4HANA. Read the full SRP case study and learn more about HPC UFA.

HPC's latest software innovation is HPC DECIPHER, an add-on regulatory financials solution that is certified by SAP as integrated with SAP S/4HANA. HPC DECIPHER provides real-time reporting and takes full advantage of the line items in S/4HANA's Universal Journal (table ACDOCA). It translates transactions from natural to regulatory accounts as they are posted, eliminating period-end batch processes, and uses dedicated, parallel ledgers for full FERC details. HPC DECIPHER also includes comprehensive functionality for allocations, adjustments, and cost flow forensics directly in the ERP. Learn more about HPC DECIPHER for real-time regulatory (FERC) reporting on SAP S/4HANA.

To schedule a meeting with HPC at the 2019 SAP for Utilities conference, please contact us.

Case Study: Optimizing FERC Accounting for Utilities on SAP

In anticipation of its migration to SAP S/4HANA in 2023, Salt River Project engaged HPC America to evaluate its current SAP Financials processes and results, and to identify areas for improvement that would not only deliver immediate benefits, but also streamline the utility’s eventual transition to S/4HANA.

Hear SRP speak about its FERC optimization project at the 2019 SAP for Utilities conference

One particular area for improvement the team identified was around SRP’s FERC data: it was hard to understand and tie back to participation billing, and did not fully support audit and pricing processes. The data required for external audiences did not reconcile to the operational data used to create internal financial statements, and, as experienced by many utilities running the standard FERC module, the differences were difficult, if not impossible, to explain.

After the assessment, SRP engaged HPC to optimize its FERC model with HPC Utility Financials Accelerator (UFA) add-on software. HPC UFA eliminates the FERC module’s limitations, and runs on both SAP ECC and SAP S/4HANA. Five months later, SRP was ready to go live with its new FERC design. The project achieved all intended objectives and more: SRP’s balances by FERC account now match exactly—to the penny—its reports by order number, WBS element, cost element, and cost center, thereby making functionalized data far more intuitive for users to analyze.

Download the full SRP case study, hear SRP speak at the 2019 SAP for Utilities conference, and learn more about HPC America's accounting solutions for utilities on SAP.

Continuous Accounting for Utilities on SAP S/4HANA

For too long, utilities have been beholden to batch accounting processes that delay financial analysis, obscure timely visibility into job spend, and hinder proactive mitigation of variances. The “monthly close” is such a foundational element of the business that it’s hard to imagine not relying on it. 

It doesn’t have to be this way, however, and HPC America’s vision for the future is decidedly different. When utilities move to SAP S/4HANA, they have a tremendous opportunity to get more timely, actionable financial information without waiting for period-end, by taking concrete steps towards “continuous accounting.”

Get the Continuous Accounting white paper (PDF)

Why Continuous Accounting Matters
At HPC, we think of “continuous accounting” as embedded, real-time, or otherwise automated processes that replace traditional period-end batch processes. Continuous accounting processes generate valuable financial data on a more regular and frequent basis than the monthly close alone. A utility with a continuous accounting model would enable its analysts and managers to evaluate and take action on operational performance, spend variances, and other business metrics without having to wait for a period-end report.

For example, collecting functionalized cost data in real time would allow analysts to identify and correct mischarged postings before month-end, thereby making the actual closing process less error-prone. Likewise, loading overheads more often than monthly would provide project managers with fully loaded cost views of their projects mid-month, which would in turn enable them to adjust resources proactively in the current period instead of reacting after the period has been closed.

Six Ways to Continuous Accounting on SAP S/4HANA

(1) Functionalize costs at the point of data entry instead of in a batch process at month-end.
Replace the derivation-based FERC solution that’s delivered with S/4HANA with a real time, line item design. There are a number of ways to do this, depending on how much flexibility and control your utility needs. One is to use HPC’s latest add-on software for utility financials on S/4HANA, HPC DECIPHER, which is certified by SAP as integrated with SAP S/4HANA, and eliminates the FERC module that we created 25 years ago.

(2) Minimize cost flow streams...
by reducing (or eliminating) allocations and settlements that only serve to functionalize costs. Streamlining cost flows is an underappreciated but valuable effort, and every utility moving to S/4HANA should consider it carefully. We have great experience and can help.

(3) Activate Functional Areas...
to leverage the Universal Journal’s power to record and report generation, transmission, and distribution costs right from the general ledger (not just from Controlling or the FERC module). We first did this for We Energies in 2012, then again for Cleco on S/4HANA in 2018, and we’ve just started a new Functional Area project for another utility

(4) Collect job costs daily, if not more frequently.
As mobile devices become ubiquitous throughout the enterprise, labor entry should occur in real time when technicians complete their Plant Maintenance tasks, even before they leave a job site.

(5) Run overheads after every pay period, or even more frequently.
In conjunction with more timely direct labor entry, apply your indirect labor and overheads more often, perhaps even weekly. This will fully load costs for job managers, project managers, and program managers to gain insights into total spend much earlier than waiting for the month-end close.  

(6) Modernize the availability and presentation of financial data.
Use Fiori apps to access a P&L statement at any time of the month, from any device, and use nested, real-time drill-down reports to show how job order costs roll up to the income statement. Get multi-dimensional data on the fly in S/4HANA without the need for ETL processes customary with separate OLAP servers like BW or BOBJ.

How to Get Started
To learn more about how your utility can best get closer to continuous accounting—say, starting with a functionalized income statement mid-month—contact HPC for a discussion, or meet us at the 2019 SAP for Utilities conference in San Diego on October 21-23.

Free Webinar: FERC Reporting Options for Utilities on SAP S/4HANA

Utility companies running SAP have a number of different FERC reporting options on SAP
S/4HANA. On September, 6, 2017 at 11:00am Pacific, HPC America’s free Webinar for utility company Finance, Accounting, Rates, and IT professionals will answer the following questions:

What FERC reporting functionality is possible on S/4HANA…

• as delivered?
• with configuration changes alone?
• with a partner’s software solution such as HPC DECIPHER?

Utility companies attending the Webinar will gain a clear understanding of the capabilities and limitations of these three approaches to regulatory accounting on S/4HANA, and have an opportunity to learn from HPC America’s 20+ years of experience supporting utilities on SAP. Register for the event now.

New White Paper About FERC Reporting Options on SAP S/4HANA

HPC America’s FERC Reporting Option Matrix for SAP S/4HANA outlines three alternative regulatory accounting designs for utilities on SAP. It covers one derivation-based FERC reporting model, and two different transaction-based FERC models. Request your copy now.

This detailed white paper is based on HPC America’s 20+ years of experience developing regulatory accounting solutions for utilities on SAP. It summarizes how three different approaches to FERC accounting function on S/4HANA, including their respective technical requirements, reporting capabilities, and data granularity to support rate case preparation and regulatory inquiries. It also addresses FERC-GAAP reconciliation, financial statement drill-down, FERC adjustments, FERC budgeting, and other topics relevant to utility accounting stakeholders running SAP S/4HANA.

Utility finance, account, rates, and IT professionals may request their copy of the white paper online.

CO-Centric FERC for Utilities on SAP

In today's stringent regulatory environment for utilities, the SAP FERC module and its traditional "FI-centric" design are no longer adequate to meet internal and external reporting requirements. That's one of the reasons why HPC America advocates a “CO-centric” model of regulatory accounting for utilities on SAP.

The “CO” refers to the SAP Controlling module, which contains valuable cost data that our customers use to support their FERC balances in SAP (both ECC 6.0 and S/4HANA). This delivers numerous benefits that, ultimately, improve a utility’s responsiveness to regulatory inquiries and strengthen its rate case position. Learn more about CO-centric FERC reporting for utilities on SAP.

Top Seven Things Your SAP FERC Reporting Solution Should Do

After spending a couple days at the SAP Controlling conference, we're reminded that utility accounting professionals are often unaware that regulatory reporting on SAP does not have to be opaque, error-prone, slow, or otherwise painful. Utilities that are relatively new to SAP may not have exposure to alternative ways of generating and managing FERC data; all they know are their own systems, which may not be configured to their full potential.

One way to test this is to see if your own SAP FERC reporting solution delivers key benefits of modern regulatory accounting systems.

Does Your SAP FERC Reporting Solution Do This?

1. Deliver all the data that Accounting and Rates need without Field Operations having to know anything about FERC
2. Assign regulatory indicators to work orders automatically
3. Translate natural to regulatory accounts automatically
4. Eliminate reconciling differences between FI, CO, and FERC
5. Help Accounting allocate common costs very easily and flexibly
6. Run fast without errors
7. Let Accounting reverse and rerun FERC quickly, anytime they want

If your current SAP FERC system doesn’t deliver these benefits, talk to HPC about it.

FERC Reporting on SAP S/4HANA - Updated FAQ

In the course of developing solutions on SAP S/4HANA this year, we've updated our FAQ about Regulatory Reporting (FERC) on SAP S/4HANA.

Whether your utility runs the SAP FI-RRU (“FERC”) module or a homegrown derivation- or transaction-based regulatory accounting solution on SAP to functionalize your GAAP accounts, this FAQ will provide some guidance on S/4HANA’s impact on regulatory reporting for utility companies on SAP.

This paper is for public and investor-owned utilities considering S/4HANA, and is ideal for Finance, Accounting, Rates, and IT managers with SAP FICO/FERC responsibility. Request the FAQ online.

FERC Reporting for SAP® S/4 HANA

Now that more utilities are considering SAP^® S/4 HANA Finance (a.k.a. "Simple Finance"), it's not surprising that questions about regulatory reporting (FERC) on SAP S/4 HANA are coming up.

As a leader in optimizing FERC for the SAP^® ERP since the mid-1990s, HPC America has documented the first FAQ to address some of the most immediate questions utilities have about the impact of S/4 HANA on regulatory accounting and FERC reporting. Whether you're already running the FERC module, or have a homegrown derivation- or transaction-based FERC solution in place to functionalize your GAAP accounts, this short paper will provide some guidance on what to expect. Public and investor-owned utility companies running SAP may request the FAQ about FERC reporting on SAP S/4 HANA here.

Functional Areas, FERC, and the SAP New General Ledger

We have now completed the proof-of-concept that secondary cost postings will indeed update the General Ledger. This was not possible prior to the New GL, except for cross-company transactions.

Contact us to learn more.

Stay turned for more updates on our progress later this summer.

Case Study: SAP ECC 6.0 and Smaller Utilities

Trans Bay Cable (TBC) is a $500 million energy transmission infrastructure project chosen by the California Independent System Operator (CAISO) to provide reliable energy to the City of San Francisco. Selected over a number of alternate solutions, and running a lean operation with a very small staff, TBC LLC required an ERP system that would meet the same FERC reporting standards of traditional utilities.

The outcome? HPC America architected an SAP ECC 6.0 solution that delivered best-in-class functionality with the highest cost efficiency—illustrating a replicable model for other growing utilities that cannot rationalize conventional, big company SAP installations. Read the complete case study.