The SAP Central Finance deployment for S/4HANA has been in use since Simple Finance when it was known as Central Journal. Since its introduction, the functionality has evolved significantly, with new features added in each S/4HANA release; a good example is the Central Payments functionality delivered in S/4HANA release 1709.
Central Finance uses HANA’s real-time, speed, and agility capabilities to replicate financial documents into the central system, providing a real-time organization-wide financial view. In a nutshell, Central Finance enables the creation of a common reporting structure for an organization. This was a brief introduction and overview of Central Finance. Let’s take a closer look at the software solution’s capabilities.
What are the SAP Central Finance key functionalities?
Document splitting functionality is now supported as a standard in Central Finance (CFIN) with the release of SAP S4 HANA 2020, even if document splitting functionality is not active in the source system. Previously, it was only supported if the source system supported document splitting. Document splitting is no longer required in the ECC source system.
Customer-defined validations for the configuration of consistency check report:
You can test whether configuration settings are compatible between the source and Central Finance (CFIN) systems with the SAP S4 HANA 2020 release. This important feature allows you to add custom validations that should be checked in the context of their project, which necessitates some customization activities.
Central budgeting for internal orders:
This feature is now available in Central Finance (CFIN) 2020. Central budgeting for internal orders enables a centralized approach to budget for internal orders in a Central Finance (CFIN) system, replicated within a cost object mapping scenario. A budget is a cost structure that has been approved for internal orders. This budget will be used during internal order postings, typically used in a process carried out in the source system.
Replicate the activity rate from Central Finance (CFIN) to the source:
The replication of activity rates from the source system to Central Finance (CFIN) was enabled in the SAP S/4 HANA 1909 release. With the 2020 release, activity rates from Central Finance (CFIN) can be replicated to the source system via SLT. It enables customers to centrally plan overhead costs and activity rates, while product costing is handled in source systems. So far, the activity rates flow back to the source system for source system planning.
Cross-system process control for the central payment scenario:
You can use the SAP S4 HANA 2020 release to implement controls over business processes distributed across multiple systems, with documents replicated between them. It employs a virtual token to determine whether a system is permitted to carry out specific process steps. Each new item generates an automatic token, which can only be active in one system simultaneously. Since the 2020 release, CSPC has been required for customers who use central payments. It is also suggested for current central payment users.
What are the tools in SAP Central Finance?
Data from financial postings are stored in database tables in any software vendor’s financial system. The SLT tool works at the database level. A database trigger is created whenever you insert or update a data record in a database table. SLT responds to this database trigger by retrieving the inserted or upgraded data records.
SAP HANA Sidecar – Central Finance vs S/4 HANA
Many businesses use this concept for SAP HANA sidecar scenarios. It was introduced as a deployment option for SAP HANA accelerators in 2011. Its primary function was accelerating critical reports, processing steps, and transactions using SAP HANA’s in-memory capabilities. In SAP ERP sidecar scenarios, an SAP HANA database runs parallel to the traditional database. SLT can also move data records to a programming interface, such as an ABAP function module, rather than directly replicating the data record into the target database.
First, SLT augments and completes the financial documents using the standard accounting interface. It is based on master data and customization settings in the central system. Then it checks to see if the financial document, master data, and account assignments are all consistent. It saves the document in the data format required by SAP Simple Finance’s database tables. Following that, the newly published financial document retains the reference to the sender system’s original documents. You can utilize it just like any other document in the central system, even if it came from a non-SAP source system.
Central Journal Interface
When financial documents are posted and stored in the source system’s database, the SLT can retrieve the data record and put it into the Central Journal interface. The interface updates the central instance of SAP Simple Finance with new financial documents.
What are the SAP Central Finance Benefits?
The following are the SAP Central Finance advantages that make it so popular today.
The same shared data set can be used for transaction processing, planning, and reporting in SAP Central Finance. It also makes use of centrally staged data for consolidation purposes.
Central Finance replicates financial transaction data in real-time with no interruptions. It also “on the fly” harmonizes underlying source data.
Methodology of Universal Journal
While deploying SAP Central Finance, you can use the Universal Journal features for Finance and Controlling. Furthermore, with the new financial architecture, SAP S/4 HANA can better optimize transactions, making them easier for users.
Merger & Acquisitions
When it comes to integrating acquisitions, growing businesses face enormous challenges. As a result, in multi-ERP system landscapes, this provides a repeatable playbook for onboarding or divestitures and consolidates reporting processes. Companies, regardless of the source ERP system, can replicate financial transactions non-disruptively into a Central Finance instance using SAP Simple Finance.
Creating consolidated entity and management reporting is a significant undertaking. It also includes pertinent business unit information and line-item specifics. Furthermore, a multi-ERP system landscape frequently complicates matters. SAP S4 HANA Finance offers current entity and consolidated group reporting capabilities. You can create reports for any dimension by using the Central Finance approach. These are built with real-time replicated data and flexible data harmonization.
Central Finance optimizes the service level provided to stakeholders, service quality accuracy, speed, and timeliness in a self-service scenario.
We also improve process efficiency by integrating, standardizing, and automating business processes when we set up an SAP Central Finance system.
S/4HANA (SAP) Central Finance improves transparency by providing a centralized source of truth for harmonized financial data for local entities and group reporting.
One of the most significant SAP Central Finance advantages is that it adapts quickly to changing business environments and implements your growth activities and business model changes. Therefore, it allows businesses to be more flexible in their growth and experimentation.
It also reduces the need for multiple systems, applications, and interfaces to improve and innovate locally and introduces centralization and scale economies to process execution.
SAP Central Finance simplifies and livens up the Run. The job is done by a single rationalized and consolidated solution for transaction recording, reporting, planning, and consolidation.
Working Capital Improvement
Central Finance also improves your working capital by simplifying cash, collections, and receivables management.
The advantages of SAP Central Finance aid in developing the SAP S/4HANA Finance application’s future. Its capabilities would serve as the foundation for future financial processes, strengthening them and increasing business value. From the learner’s perspective, given the benefits of SAP Central Finance, it is unquestionably advantageous to learn it thoroughly. You should know its methodology, work process, configuration, and practical implementation. If you want to improve your skills, go with TekSKilled – the best online SAP training platform https://tekskilled.com/ and learn from industry experts.