Lesson 5 of 5
Close risks and sign-off
12 min
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The finance section of a sign-off pack is where auditors, the CFO and the process owner look first. Dan will sign that Contoso can close its books on SAP S/4HANA. This lesson lists the close-related risks that most often slip through, and shows what evidence Dan should see for each before he signs.
Currency
Company code 1710 keeps its books in USD, but Contoso invoices a Canadian fleet customer in CAD and may buy in other currencies. Currency risks include missing exchange rates for the key date, the wrong exchange rate type (for example average rate used where the month-end rate is required), valuation methods that do not match the accounting policy, and parallel currencies, such as a group currency, that are configured but never checked. Test valuation with at least one gain and one loss case, and confirm the next-day reversal where the method uses one.
- Load key-date ratesMonth-end rate type for CAD to USD, confirmed with Dan
- Post CAD receivablesInvoices to the Canadian fleet customer at the posting-date rate
- Run valuationOne case with a gain and one with a loss at the key date
- Check postingsUnrealized gain and loss on the right accounts; group currency too
- Confirm reversalValuation reverses on the first day of the next period, where the method uses it
Rounding
Rounding differences appear when amounts are split: tax across items, costs across receivers in an allocation, a total across segments with document splitting, or a conversion between currencies. They are usually small, but they must land on the configured rounding accounts and not leave a document or a segment out of balance. Include tests with awkward numbers, such as an allocation of 1,000.00 across three cost centers, and check where the odd cent goes.
Posting period controls
Posting periods are opened and closed per posting period variant, by account type and account range, with special periods for year-end adjustments (commonly 13 to 16 in a 12-period fiscal year variant). Risks: a period closed so early that subledger postings fail, a period left open so late postings change reported figures, special periods open to too many users, and a new fiscal year not opened at all. Test both directions: postings succeed when the period is open and are refused when it is closed.
Authorizations and jobs
Close tasks are powerful. Opening periods, running valuation, posting manual journal entries and running settlements should be limited to the right people, with segregation between posting and period control. Many close tasks also run as scheduled jobs with saved parameters; a job variant pointing at the wrong company code or key date will run happily and produce wrong results. Test the jobs and variants that production will use, with the users who will own them.
Migration and the first close
The first close after go-live mixes migrated balances with new postings. Opening balances, open items, asset values and inventory loaded at cutover must be in the right periods and accounts, or the first trial balance will not tie to the legacy system's last one. Make the mock close in the final dress rehearsal start from migrated data, and reconcile the opening position to the legacy closing position before you look at the new period's movements. Luis's cutover plan should name who signs that opening reconciliation.
- Legacy closing positionLast trial balance and open items from SAP ECC
- Cutover loadBalances, open items, assets and inventory loaded by Luis's team
- Opening reconciliationMigrated balances tie to legacy, signed by the named owner
- New period postingsTransactions of the first period on SAP S/4HANA
- First closeClose tasks and statements checked against expected values
The finance section of the sign-off pack
| Evidence | What good looks like |
|---|---|
| Mock close results | At least two mock closes in sequence; every task run by its owner with job logs; open defects listed |
| Reconciliations | Receivables, payables, GR/IR, inventory, assets, bank and intercompany reconciled, differences explained to the cent |
| Report verification | Trial balance, balance sheet and P&L matched to independent expected values; no unassigned accounts |
| Currency and rounding | Valuation gain and loss tested; rate types confirmed; rounding lands on configured accounts |
| Period control and authorizations | Open and closed period behavior tested; close authorizations limited and separated |
| Year end | Balance carryforward and special periods tested, or a dated plan to test before the first year end |
Finance evidence Contoso's process owner reviews before signing.
What would you do?
Two days before Contoso's go-live, the final mock close shows the trial balance for company code 1710 balanced, but one segment is out of balance by 0.03 USD after an allocation. Grace wants to treat it as immaterial. What should Priya recommend?
- Currency: key date rates, rate types, valuation methods and parallel currencies, with gain and loss tests.
- Rounding: test splits with awkward numbers and confirm residuals land on rounding accounts.
- Period control: test open and closed behavior, special periods and new fiscal year opening.
- Sign-off needs mock close results, reconciliations, independently verified reports and tested controls.
Check your understanding · not graded
Lesson check
1. Which test proves posting period control works?
2. An allocation of 1,000.00 across three cost centers is a good test of what?
3. Which special periods are commonly used for year-end adjustments in a 12-period fiscal year variant?
4. Why test close jobs with the variants production will use?