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Central Finance is there in the market for quite some time, now additionally it can be seen as an
approach to adopt SAP S/4HANA. It enabled FI documents to be replicated in a new Central
Finance system which running on S/4HANA. Central Finance is relevant in an organization
where there are multiple older SAP ERP instances or other Non-SAP Finance applications.
Central Finance exploits the capabilities of HANA i.e. real-time, speed and agility to replicate
financial documents into the central system, giving a real time organization-wide financial view. In
short, Central Finance allows you to create a common reporting structure for an organization.
1. You can use the central finance to harmonize master data and replicate posting
2. You can map master data from several source systems (SAP & Non-SAP) to harmonize
master data in central finance system either manually or using SAP MDG (a separate
license for MDG).
3. For enabling the transfer of data between your source systems and central finance, you
need to maintain mapping that defines the relationship between data in the source
systems (SAP and Non-SAP) and data in central finance. Mapping is used during the
initial load and day to day transactional data transferring to central finance system.
4. Profitability segment data of an accounting document can also be transferred to central
finance system. ACDOCA is updated with profitability document number and reporting on
PA can be achieved in central finance system.
5. Intercompany Reconciliation with Central Finance: AR and AP are replicated into Central
Finance, intercompany reconciliation (ICR) can access these receivables and payables directly
in the Central Finance system. ICR is compatible with central finance system.
6. Document Relationship Browser: Using the document relationship browser, you can see the
document flow of an FI document and can access the all link documents (CO, SD, MM) in
origin/source system
All documents related to a transaction are available in the document relationship browser,
provided the source system is an SAP system.
Document can be navigated in relationship browser; you can use the following transactions:
7. Harmonized Financial Reporting: Central Finance system collects data from different system
and provides harmonized reporting in a single system
The picture below shows how data is replicated from the source systems to the S/4 HANA
Central Finance system:
Expense planning
Profitability planning
Profit and loss planning
# Integration with SAP & Non-SAP Systems with S/4 HANA Central Finance System:
The Picture below shows how the systems integrate with each other.
Note1: Central Finance system can be used out-of-the box, for those customer who are still in
maintenance i.e. SAP ERP 6.0. or onwards.
Note2: Releases such as SAP R/3 4.6C to SAP ERP 5 are still possible; for this special services
or discussion with SAP would be required.
1. SAP S/4 HANA Finance and Central Finance can be used with SAP Landscape
Transformation Replication Server (SLT) and SAP Master Data Governance (SAP MDG).
2. The SLT server collects data written to database in the source systems and feeds this
data into the corresponding Central Finance Accounting interface.
3. After the data is mapped, the system uses error handling to log the details of any errors
encountered. You can choose to make corrections and repost the item or process the
item again after, for example, you correct the mapping rule of adjust incorrect values in
the document.
4. The internal accounting interface sends the financial accounting (FI)/Management
Accounting (CO) document to SAP S/4 HANA as a universal journal entry.
5. After the data is mapped, the system uses error handling to log the details of any errors
encountered. You can choose to make corrections and repost the item or process the
item again after for example, you correct the mapping rule or adjust incorrect values in
the document.
# Technical/Functional Information:
Recommendations
1. It is very much recommended to use MDG since manual handling of mapping of master
data is mammoth work
2. It is recommended that tax reporting should only be done from your source systems
rather than the Central Finance system.
3. Central finance is generally used where landscape is very complicated, such as,
organizations which have different ERP systems (SAP and Non-SAP) and organization
into mergers and acquisitions. Central Finance allows you to create a common reporting
structure.
# Summary
Central Finance represents a route to ERP system consolidation and migration to SAP S/4HANA
at low risk. It delivers various benefits, however there are various challenges also (mentioned
above under challenge section).
The Central Finance is not for all it is used where landscape is very complicated, such as,
organizations which have different ERP systems (SAP and Non-SAP) and organization into
mergers and acquisitions. Central Finance allows you to create a common reporting structure.