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Implementing SAP Simple Finance

Much has been published about SAP Simple Finance since its official announcement by Bill McDermott at SAPPHIRE NOW 2014[1]. Now a couple months later, customers are moving from “What are you talking about?” to “How do I implement it?”

A Refresher on SAP HANA

By now you should have heard about HANA, SAP’s appliance that combines hardware packed with tons of processors and memory, a purpose-built operating system and the latest database architecture design. The result is a solution that can read through millions of database records in milliseconds. This amazing performance could be highly useful in all applications that handle very large quantities of detailed transactions, such as most of Finance (FI) and Controlling (CO).

This brainchild of Hasso Platner, founding member of SAP and chairman of the Supervisory Board since 2003, will have profound consequences on all of SAP’s ECC coding, starting with the FI/CO modules. There, volumes of transactions are so large that developers have spent the last few decades optimizing with aggregates based on time, header/line item, hierarchies, indexes and archives.

Last year, Hasso initiated the redesign of FI/CO to leverage the power of HANA.[2]

Why Does Finance Need SAP HANA?

The Old ERP World

In a traditional ERP environment like SAP ECC, accountants handle incoming documents on a daily basis and record them into the system. If the document is related to Primary Costs for instance, both the line item (COEP) and the totals (COSP) tables will be updated. Frequently, managers will run reports reading the aggregates or index tables to analyze these primary costs and then drilldown to the line items for details. In this case, users need access to both tables. This architecture accesses less data at a time and therefore is better suited for an environment where the database is a bottleneck.[JD1]


Reports and database access in a traditional ERP environment

The Ideal World

Given the potential performance of HANA, we can easily identify redundancies. Imagine now a perfect environment in which the performance of the database is not limited, and totals can be calculated on the fly. In this case, the aggregate table wouldn’t be needed.


Reports and database access in an ideal ERP environment

Looks much cleaner, right? This can easily be achieved by extending the line-item tables with all the fields from the header table. This removes the need for all the redundant aggregate tables and index tables. With HANA’s column store architecture, the line items can be retrieved quickly and aggregated on the fly. Imagine how your database could be slimmed down by removing all totals and indices, and the potential performance gains in both the data entry and analysis tasks!

Unfortunately, this ideal world has some limitations. First, all the reports and programs would have to be rewritten to select from line-item tables instead of aggregates, which, in SAP’s case, could easily take years. Second, some information cannot be stored as a line item but requires a summary level.

For instance, imagine a customer requiring a purchase order for 1,000 widgets to be shipped in boxes of 100 per month. Every month, the manager needs to know: how many were sent (simple sum on shipment line items) and how many are left. If only the line item table exists, the following questions arise: where shall the required quantity be stored? Where can it be decremented?

These may sound like exceptions, but they are, in fact, very common for all planning scenarios or setting targets, usually done in some form of aggregates like a cost center group, cost element group, product line or customer family, as well as all the WIP (Work In Process) transactions. For these, a single line-item table wouldn’t be sufficient.

Simple Finance: The Hybrid Approach

In order to solve this double issue (redoing the programs and values on summary data), the SAP development team came up with an hybrid architecture, in which the line item values and the summary specific values  are separated into different tables, and then combined into a consolidated view.


Reports and database access in S-FIN

It is very important to understand that these new views (technically called CDS Views) will be automatically generated by Simple Finance during installation and guarantee the continuity of all existing programs, standard (variance, assessments, settlement, etc.) or custom, while reducing the database footprint and boosting the overall performance. As Hasso Platner said himself in his blog: “It is the by far the biggest improvement in the history of SAP’s enterprise systems”.[3]

Multiple Implementation Scenarios

The new Simple Finance platform will enable companies to implement new scenarios, depending on their priorities:

  • Significant reduction in reconciliation efforts;
  • Real-time processes that eliminate bottlenecks during financial close;
  • Next-generation user experience.

Reduction in Reconciliation Efforts

As we saw earlier, removing the totals tables speeds up all financial process, and the critical period-end close is no exception. But the redesign of the core didn’t stop there. Indeed, accountants spend a lot of time during the short period-end window reconciling FI and CO.

A typical case is the rework needed when corrections are done in the ledger and subsequent cost allocations have to be reverted and reprocessed. In order to avoid this situation, the FI and CO documents have been merged 1:1 at the line-item level into a so-called “Logical Document.” With this new architecture in place, the internal and external reporting is harmonized, and the reporting and analysis can be performed with more flexibility given the smooth link between FI and CO.


From separate FI and CO documents
to the Unified Logical Document (Source: SAP)

For instance, every company running account-based CO-PA needs to collect FI documents at the end of the period and use them to perform managerial accounting activities like top-down distribution. Companies spend huge amounts of time reconciling between CO-PA and FI-GL[4]. Thanks to the Logical Document introduced with Simple Finance, the account-based CO-PA integration mechanisms can be used in real time; there is no need for reconciliation anymore and several steps can be skipped at each month’s end. (However, be aware that Simple Finance does not yet support costing-based CO-PA.)

“Essentially you have the old reconciliation records with real CO-PA dimensions,” said Janet Salmon, Solution Manager for Simple Finance.

Real-time Processes that Eliminate Bottlenecks during Financial Close

What makes the financial close so complex is the sheer number of processes to run, as well as their interdependencies. From a high level, the financial ledger needs to be closed, then all orders need to be settled and their WIP calculated, and finally, the cost allocations need to be performed in order to calculate customer/product/corporate profitability before data can be exported to the data warehouse for reporting and analysis. That has to happen for all entities before moving to the corporate level. Only after this long process (that leads to the publication of reports), can any error or discrepancy be found. Potentially, several of the batch programs might need to be reverted and rerun until everything matches up correctly.


Traditional financial close vs. financial close on SAP HANA (Source: SAP)

With SAP Simple Finance, thanks to the removal of aggregate tables and the introduction of the logical document, the period-end close can be performed on a recurring basis and reports can be published in real time. This enables analysts to identify and correct mistakes earlier and decision-makers to correct course during the period rather than 30 days later.[5]

Next-Generation User Experience

We talked a lot about the changes that Simple Finance introduces behind the scenes and what performance, flexibility and real-time processes can achieve. But end-users will also be interested in discovering the new user experience that SAP Fiori[6][7][8] delivers once connected to SAP Simple Finance.

The key difference is that not only were aggregate tables replaced with CDS Views that support a reduced footprint, higher performance, as well as backward-compatibility of all standard and custom ABAP programs, but also that these views were integrated into SAP HANA Live.[9] This HANA layer acts as a content publication service offering an easier platform for the creation of reports. Here are some examples:

New screens can be published with Dashboards[10] or Design Studio.[11]


SAP Fiori Dashboard in SAP Smart Business[12]

With new tools like Lumira, Explorer or Analysis for Office, users can easily discover and analyze large volumes of data, in real time, down to the line item.


                                                           WIP Analysis with SAP Analysis for Office[13][14]

Multiple Migration Scenarios and Paths

Now that you understand the value that SAP Simple Finance can provide to your organization, the biggest hurdle that lies ahead is: how do you migrate from your current environment to SAP Simple Finance? There, two options are available:

  • Using Simple Finance as Central Ledger;
  • Moving from Business Suite to Financials Add-On.

Simple Finance as Central Ledger

Many large organizations maintain more than a single ERP. This architecture is usually the result of performance trade-offs (one smaller ERP system, according to region), history (mergers, fusions or acquisitions) or legal requirements. In order to achieve a corporate view of the organization, operations are handled locally and data is collected centrally for reporting. However, this process is very slow, doesn’t allow real-time decisions at a high level, and presents a disconnection between the aggregated results in the central repository and the line item stored in decentralized locations.


SAP Simple Finance as Central Journal (Source: SAP)

The solution can be found in the installation of SAP Simple Finance to collect all financial information from the source ERPs in real time. From there, business transactions can be used to plan, consolidate or report. This non-disruptive solution can be deployed in cloud or on premise. Several organizations choose this strategy as a first step towards the adoption of Business Suite on HANA.

From Business Suite to Financials Add-On

If your organization is maintaining a single ERP environment, or only a few ERP instances, a better solution could be the migration from a traditional SAP ERP Business Suite to Simple Finance. To do this, you would have to perform a migration of your underlying database to SAP HANA[15][16][17] before installing the Financials Add-On. Check the documentation for more details on the requirements. [18][19][20]


Migrating from traditional Business Suite to Simple Finance

Learn More

Depending on your role within your organization, you may need to search for more information on SAP Simple Finance from different angles. I have collected many links to diverse sources of information.

Should you still have any question, don’t hesitate to contact me directly at

[1] Finance Took Center Stage (again)

[2] SAPPHIRE NOW 2014: SAP Simple Finance Highlights

[3] Massive Simplification: Case of SAP Financials on HANA

[4] Reconciling SAP COPA to the General Ledger

[5] Real-Time Business Becomes a Reality: Reinventing Finance at SAP

[6] SAP Fiori

[7] SAP Fiori User Experience

[8] What is SAP Fiori UX?

[9] SAP HANA Live – Real-Time operational reporting

[10] SAP Business Objects Dashboard

[11] Labs IT contributes to “SAP Simple Finance” Demos

[12] SAP Smart Business for Cash Management

[13] SAP BusinessObjects Analysis – Microsoft Office Edition

[14] SAP BusinessObjects Analysis, edition for Microsoft Office

[15] The Benefits of the Business Suite on HANA

[16] Rapid database migration of SAP Business Suite to SAP HANA

[17] Migration of SAP Systems to SAP HANA

[18] Advantages in new general ledger

[19] Financials Add-On for SAP Business Suite powered by SAP HANA

[20] OKP Financials Add-On for Suite on SAP HANA 1.0

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  • Thanks for that overview! Not being a FI/CO expert, I have a question that is maybe a stupid one: is Simple Finance the same as Smart Finance (e.g. as described here)? Is it a part of it? or something completely different? Thanks for clarifying!

    • Bastien,


      That’s a very good question, I forgot to mention the renaming:


      As usual in SAP, this application went through several changes:

      – It started as S-Fin, which was first translated as Smart Finance, but that meant that the previous version was … Dumb Finance.

      – So, marketing suggested that the application be renamed Simple Finance. There’s even some presentation with Simplified Financials.

      – Now, here comes the best part: if the exact same coding is not applied in the cloud, but on premises, the official name is: “SAP Financials Add-On for SAP ERP Business Suite powered by SAP HANA” (yes, SFAOFSEBSPBSH)


      More information here:

      Financials Add-On and Simple Finance aka sFIN | SAP HANA

      Financials Add-On for SAP Business Suite powered by SAP HANA


      Don’t worry, even the FI/CO experts get confused ;o)

      • Confusing indeed. SAP likes to do this to us, I often wish that SAP would just mention that somewhere. The same thing happened for SAP River / River RDE. Thanks a lot for the clarification!

  • Hey Julien


    A great and comprehensive blog.


    I am looking forward working with this tool with clients and this blog will help explain how it is set up, how they can use it and the material you have added means this blog is a central place to refer back to time and time again.

    • Dear Joao,


      Your SAP MM is part of the Business Suite. Upgrading your FI to Simple Finance will de facto keep the integration for MM.


      This is very similar to what happens when you migrate from Classic GL to New GL.The integration is not changed and you may get some additional benefits / features. In the case of New GL, it was the valuation of materials in group currency vs global currency. In the case of Simple Finance, it may be faster or even real-time processing of WIP during month-end.


      I hope this helps.

  • Hi Julien-


    This is an awesome blog with lot of great information. The question that I would have is this: if Simple Finance is installed to serve as the Central Journal and receives updates from multiple source ERPs, can that Central Journal start with data or must it be empty?




    • Hi Sumit,


      Thanks for the interesting question. I believe you have 2 options:

      1. You can copy a productive system, execute the data conversion and start from there
      2. You can setup an empty system, connect the Central Journal and pull the data in.


      I would probably choose the second option because the Data Services would let you filter data if needed. For instance, how far back would you like to go?


      I hope this helps,


  • Hi Julien,


    Thanks very much for this blog. It is not easy to find good quality information about this new product.

    Questions. Do we have any information related to Security and how this will work for SAP Simple Finance?

    • Hi Juan,


      That’s a very interesting question, you’re the first one to ask me.


      I believe you need to consider 2 scenarios:

      1. If you upgrade your ERP system to Simple Finance, the security will stay the same.
      2. If you have a Central Journal system, you can setup the security with selected users. For instance, maybe only the headquarters need to have access to the consolidated accounting information.


      I hope this helps,


  • Hi Julien,

    Want to thank you for providing information. We are currently rolling this out as a cloud solution and this is good info to start with.




  • Perfect and so comprehensive blog on the new Solution from SAP.  May be it is difficult to find any other place covering massive information on this.


    Looking forward to work on this and to get some handson this beautiful and logical Solution.



  • Hi Julien,


    That’s good information.

    We’ve already deployed COPA acceleration on Hana in our system.

    What will Simple Finance bring on top of it ?




  • Hi Julien,


    thanks for sharing the this great information.


    looking forward to work on this latest technology.


    I believe, S4HANA is the future.




  • Hi Julien,


    a great presentation. Thank you for all the information.

    I have a question. I’m not an expert. Therfore the question might be stupid.

    We are a company group 20 of approx. 20 companies (20 company codes in SAP) and we like to migrate from ECC 6.0 FI to Simple Finance.

    Beside this : We are using the “classic” ledger accounting. Don’t know whether it matters.

    What is the best way ?

    –    Do I migrate all companies in one step to Simple Finance  ?    


    –    do I choose a kind of step by step approach :

         first: one company. In the next step a few more and in the third step the others ?

    Please some pros/cons from your site.

    Again: thank you very much for all the details. Much appreciated.


  • Hi Julien and many thanks for your blog!


    With this new appraoch I am wondering if Simple finance includes NewGL Document split functions: will I be able to analyse my line items including FI & CO dimensions after GL document split?

    In other words, is simple Finance able to give access to BSEG, COEP and FAGLFLEXA? in the same view?




  • Hi We are very new to Simple Finance and have few question can on Simple Finance , can you please clarify 1.For the New customers who is not in SAP, can you share some link or documents with respect to Simple Finance configuration guide (Which Includes FI, CO and ASSET) ?  We are not able to trace in the SAP Service Market Place Simple Finance portal. Is it different from the SAP EEC6 FICO Configuration? 2.What is the main advantages and difference between the two ,  for the customers who are moving from Classic GL to Simple Finance Accounting and those customers who are using New GL and moving to Simple Finance Accounting. 3.Will both the customers will have the same benefits after moving to Simple Finance. Thanks Regards Anant

  • Hi Julien,


    Did you get any real experience of configuration and/or migrating to new SAP Hana – Simple Finance yet?


    I am just curious what should have done for that so far in term of configuration/organization structure definition or this is just a move to new technology of SAP?




  • Hi Julien,


    great blog, thanks for sharing!


    One technical question: Within a Simple Finance System, where can I can see wether a db table is still a real table on the databare or replaced by CDS view?


    Thanks in advance!


    Best regards,


  • Hi Julian,


    Great info about new edged and revolution technology , these information help us to understand ;  Value addition and evolution. If you have any info regarding comprehensive documentation regarding configurations on different scenarios would be great and help for practicing consultants.


    Great information.


    Looking forward more developments.

  • Hi Julien,


    Thank you for sharing this great information.


    looking forward to work on this latest technology.





  • Hi


    What is the New Functionality and the New Transaction Code available in SAP Simple Finance 2.0 ? Compare with Assessment (KSU5) and Distribution (KSW5) in ECC6




  • Thanks everybody for the very interesting questions. I realize that I didn’t take the time to answer some of them and some might be outdated.



    As a preferred partner for Simple Finance / Central Finance, Alta Via has been invited to test the latest development in Walldorf. I will be there next week for testing and feedback with the product managers and developers.





    I will be writing a blog post of the event when I get back, but it’ll of course be more interesting if it matches your most pressing questions.




    Do you have any outstanding questions or topics that you would like me to focus on? Please contact me directly with your questions.




    Julien Delvat

  • Hi Julien,


    Those information are really helpful.


    My questions are simple but more technical concerns:


    – Is that S4 database structure designed same as ECC? Is that total table (FAGLFLEXA, BSEG…) remained same?

    – I guess new database structures are created more tables (for logical document) and it will only support for reporting purpose, is that correct?

    – Is purely FI consultant can control configuration part with S4? My concern that FI people doesn’t have much knowledge about CO side so that it might get loss during configuration of S4