CFIN or Central Finance is a central accounting system or an add-on that receives financial accounting transactions from both SAP and non-SAP ERP systems. It enables customers with more than one older SAP ERP system to replicate financial documents into a central finance system running on SAP S/4HANA.
It is important to remember that SAP CFIN does not function as a standalone system. Rather, it depends on data replication from other SAP ERP systems that are usually replicated using SAP Landscape Transformation Replication Server (SAP SLT). Master data is usually done using IDocs.
Options for Asset Accounting in Central Finance
There are two basic options for asset accounting in Central Finance:
- Asset Accounting in Source ERP System
This option includes the following steps and facts as mentioned below:
- Asset accounts in the source system are described as reconciliation accounts for fixed assets.
- Asset postings such as asset acquisitions are done in source system with asset number on reconciliation account.
- The financial document is replicated via SLT to Central Finance.
- The asset information is deleted from asset-related fields such as ANLN1 and ANLN2, of the FI documents in the Central Finance Accounting Interface.
- Asset information can be transferred to customer-defined fields in a BAdI implementation for reporting purpose. This is optional for the user. BAdI (Business Add-In) is a new SAP Object Oriented enhancement technique used to add the business functionality to the existing SAP standard functionality.
- Asset accounts in the Central Finance System are set up as non-reconciliation balance sheet accounts or mapped to a non-reconciliation balance sheet account.
This option comes with its own set of challenges and implications. Some of these challenges include:
- It is required that all asset related postings i.e., asset acquisitions, depreciation, transfer, retirement, reporting and period end closing must be done in source system.
- Any information related to single fixed assets is only available in source system.
- Some customer reports would only be the exception in case the user has transferred the asset number into a customer field and replicated to the Central Finance system.
- Asset Accounting in the Central Finance system
Setting up the asset accounting in a Central Finance system would be more beneficial for any organization. This is owing to its following advantages:
- New Asset Accounting has benefits like improved parallel valuations, new depreciation calculation logic, accelerated depreciation runs, and integrated in Universal Journal, to name a few.
- It is possible for asset accountants to work in SAP S/4HANA with new UX / Fioris.
- There would be a reduction of legacy systems for Asset Accounting.
- There would also be a reduction in number of postings in decentral systems.
- Harmonization of processes in Asset Accounting becomes possible by centralizing them.
- There can be a complete financial reporting in Central Finance.
This, in turn, leads to certain challenges for the user. Some of these include:
- Fixed asset related postings can only be done in Central Finance.
- Procurement for assets and capitalization of investments would have to be done in the Central Finance system only.
- There would also be an impact on the logistics processes.
- There would be a need to move related logistic processes to Central Finance.
Steps To Implement Asset Accounting In CFIN
There are times when the user is unaware of the correct methodology that can help bring asset related postings like asset acquisitions or investment orders from source system to Central Finance. A possible solution in such a scenario is to use an investment order in source system to carry the asset related postings, from purchase orders, invoices, material consumption, and activity confirmation, and transfer them to Central Finance. In CFIN, the investment order is settled with standard transactions to asset under construction and/or fixed assets. A user can deploy the following steps to attain this goal:
- Create an internal order in source without investment profile.
- Make a copy of the internal order as investment order in Central Finance.
- Asset under construction is automatically created for the investment order in Central Finance.
- Do FI/CO postings and CO postings in source system on internal order.
- Replicate FI/CO and CO documents from source system to Central Finance.
- If required, maintain settlement parameters in Central Finance.
- Settle investment order to asset under construction in Central Finance.
- Settle asset under construction to final asset in Central Finance.
- All other asset related postings and reporting are done in Central Finance only.
Things To Keep In Mind When Implementing Asset Accounting In CFIN
It is important for the user to check all related dependent processes and reporting before beginning to do any posting such as central payments or settlements in a Central Finance system for a company code that also receives financial documents from another source system. Remember that the single source of truth will be only in Central Finance.
It is also possible that the user might have to move legal and tax reporting from the source system to Central Finance. He/she might also have to think about the consequences in Controlling. Since the user does depreciation postings in the Central Finance system, he/she will only have a complete view on their costs of the cost centers in the Central Finance system. This can turn out to be a challenge if the user requires all cost center costs in source system such as for actual costing in the source system.
Another issue could be an integration to Plant Maintenance (PM). PM and equipment master data might only be available in source system and asset master data are available in the Central Finance system only.
It is important to be aware that Classic Asset Accounting has been replaced by New Asset Accounting in SAP S/4HANA in case the user is planning to implement Asset Accounting in the Central Finance system.
The user must make sure that he/she keeps oneself familiar with the changes in Asset Accounting in SAP S/4HANA. There are multiple challenges that might come up during the implementation of asset accounting in CFIN but what matters is the way in which the user deals with them. Make sure that you keep yourself well-prepared in advance to ensure a smooth legacy data transfer and transition.