Central Finance or CFIN in SAP S/4 Hana is one of the deployment options of SAP S/4HANA in which the present ERP systems with SAP or non-SAP category gets connected to the SAP S/4HANA system. The document replication in this case happens in real time and it supports several replication models.
CFIN provides businesses with various opportunities to utilize S/4 Hana innovations without migrating them to S/4 Hana and without any disruptions to their existing processes. This is enabled by connecting their source systems – both SAP and non-SAP. CFIN uses SAP Landscape Transformation Server (SLT) for real time replication of data from Source System to S/4 Hana.
Why CFIN Now?
In most large-sized organizations, the IT landscape is made up of several ERPs that includes both SAP and non-SAP systems that are complex and distributed. It is likely that there may be different systems for different business functions, geographies, or lines of business. This is why it is essential to minimize business disruption during transformation in any finance organization accompanied by the Shared Service Model.
To manage such complex and diversified architecture, SAP offers its solution named as SAP S/4HANA Central Finance. There are several advantages of using SAP CFIN. A few of these are as mentioned below:
- Real time data replication
- Simplified reporting
- Single source for consolidation
- Non-disruptive migration to S/4HANA
- Implementation of central processes such as central payments, in house cash for working capital, central receivables, etc.
However, there are certain situations when it is recommended not to use CFIN in an organization. Some of these are as mentioned below:
- When the organization have only one ERP system.
- If that ERP system is non-SAP that can be converted to SAP S/4HANA as greenfield implementation.
- If that ERP system is SAP ECC that can be migrated to SAP S/4HANA.
- When no more ERPs can join the game in future.
- The business model is not inclined towards M&A.
Limitations of SAP CFIN
SAP CFIN has its own limitations that restricts its usage for the users. Some of these include:
- The system does not support asset accounting document replication.
- It does not support postings to CO-FI reconciliation ledger (GL Reconciliation Postings).
- Zero support to year-end closing postings where the reference transaction (AWTYP) is GLYEC.
- Clearings are not transferred as part of the initial load. However, it allows the user to activate the transfer of clearings via ongoing replication.
- The user cannot transfer the clearing resets as part of the initial load. However, he/she can activate the transfer of clearing resets via ongoing replication.
- It does not support recurring entries and sample documents.
- It offers zero support to the noted items (apart from down payment requests and payment requests).
- It does not offer support to the parked documents and balance carry forward items.
Features of SAP CFIN
SAP Central Finance comes with its own unique features such as:
- The central finance component can be used to match with the master data and replicate posting.
- Outlining the master data from different source systems, i.e., SAP or non-SAP to match the master data in the central finance system either manually or using the SAP Master Data Governance (MDG).
- The data transfer between the source systems and central finance is allowed by maintaining an accurate mapping between the central finance and source system. This helps in defining the relationship between data in the source system and central finance.
- This system allows to transfer the productivity fragment data related to the accounting document to the central finance system.
- With the help of a document relationship browser, the user can see the document flow of a financial document.
- The user can also access all the link documents in the source system.
- The Central Finance system collects data from various sources and later uses it to provide a consistent reporting in a single system.
- The Integrated business planning for SAP S/4HANA, on-premises edition is integrated with S/4HANA Central Finance to deliver a central and reliable insight of the planning process. It includes cost planning, profitability planning, profit, and loss planning.
Structure of SAP S/4HANA Central Finance
This business suite has its own structure that it follows to get the business operations executed successfully. Its structure flows as mentioned below:
- SAP S/4HANA Finance and central finance are utilized with SAP Landscape Transformation Replication Server i.e., SLT and SAP Master Data Governance.
- The data written to the database in the source systems gets collected by the SLT server and then this data is provided into the corresponding Central finance accounting interface.
- A financial and management accounting document is sent to SAP S/4HANA by the internal accounting interface as a universal journal entry.
- Once the data is mapped, an error handling document is used by the system to record the details of any errors faced in the system. These errors can be corrected, and the item can be reposted again.
Conclusion
There are certain challenges in adopting the central finance approach such as technical complexity, mandatory competencies, additional cost, etc. But it has certainly provided an exciting way to ERP system association and migration towards SAP S/4HANA at a lower risk. Deciding the budget beforehand to carry out a regression testing and carrying out the integration and architectural planning can serve as a great idea to find a combined solution.
