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Author's profile photo Allison Martin

SAP Simple Finance and the Central Finance function

As the adoption rate of SAP HANA continues to grow and customers evaluate SAP Simple Finance, numerous questions have been raised around not only how to embark on an implementation but also what the impacts are on a customer’s current SAP ERP system.

SAP’s goal when developing the SAP Simple Finance solution was to take the most multi-faceted and complex finance tasks and figure out a way to uncomplicate them, making them easier to perform and consume.  The solution, which takes full advantage of the capabilities of the in-memory SAP HANA platform, offers customers a number of benefits including:

  • An IT architecture that removes replications and aggregates
  • A dramatic reduction in the need for performing reconciliation
  • New user interfaces, transaction codes and reports

But how can customers take on such a massive project without disrupting their ERP systems? Well that’s where the Central Finance function comes into play. In talking with customers, there seems to be a some misunderstandings on what Central Finance in SAP really is. Central Finance is not a product but rather a deployment model for SAP Simple Finance, formerly known as the “Central Journal” approach. 

The key notion behind the Central Finance function is that it breaks out the Finance and Controlling (FI/CO) applications from the rest of SAP ERP via Application Link Enabling. By using Application Link Enabling, customers are provided with a technical foundation for integrating business processes in a dispersed environment. It manages the exchange of data and messages across multiple systems and enables SAP customers to connect programs across a number of platforms and systems. If a company is looking to transition to SAP Simple Finance, utilizing the Central Finance function is one of the most efficient ways to make the move, as it does so without disrupting your existing SAP ERP systems.

For more detailed information on SAP Simple Finance and Central Finance function, attend David Dixon of TruQua Enterprises’ upcoming session at the Financials 2015 event in Las Vegas, “Understand reporting, planning, and analysis options within the central finance function”, scheduled for Thursday, March 19 from 3:00pm – 4:15pm. TruQua Enterprises will also be exhibiting at the conference, so make sure to stop by our booth or attend one of our other 4 sessions at the conference.  For more updates from TruQua Enterprises, you can follow us on Twitter at @TruQuaE or find us on LinkedIn.

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      Author's profile photo Tomasz Janasz
      Tomasz Janasz

      So what is exactly required to activate the Central Finance function? Is an installation of S/4HANA Finance required in order to actiavte this function?

      Thanks for sharing your thoughts.

      Author's profile photo Allison Martin
      Allison Martin
      Blog Post Author

      Hi Tomasz, Yes, activating Central Finance does require a stand-alone instance of S/4HANA Finance.  Central Finance is considered a deployment option for S/4HANA Finance to provide the benefits and functionality of S/4HANA Finance to organizations that may not be able to easily or quickly upgrade their existing ERP systems to S/4HANA.  So the Central Finance system is itself an S/4HANA Finance system that has been configured to receive postings from other satellite heterogeneous ERP systems.  The installation of Central Finance requires first setting up a new S/4HANA system and then configuring the Central Finance component to receive, map, and post transactions coming from the other systems.

      Author's profile photo Tomasz Janasz
      Tomasz Janasz

      Hi Alison, thank you for your rapid and comprehensive response. One more clarification: is there also an option to activate the CF component on Business Suite on HANA or does the customer need to invest in a new license for S/4? Best, Tomasz

      Author's profile photo Former Member
      Former Member

      Can you Tell me if we can Activate Central Finance Business Function on S/4 HANA Simple Finance 1503 System?