Central payment and Clearing Options in Central Finance
This blog is intended for project members responsible for setting up the Central payment functionality in Central Finance and Multiple Clearing Options . It explains the options for Central payment and the special Considerations for Different Clearing Options .
What Is Central Payments: Central Payments enables centralized payments, collections and centralized clearing activities in the Central Finance system instead of each source system. It facilitates replication of a vendor invoice posting from ECC system to S/4HANA System and the follow-on processes like payments, real-time AP Reporting, etc.
Below are the features of central payments
- Central internal/external payments are activated at the company code level.
- Central incoming payments.
- Centralize open item management and payment reporting.
- Centralize payment knowledge and optimize process in shared service center.
- Real time operational reporting with Fiori user experience.
- Faster entity and group closing with real-time insights into closing status.
- Centralized Bank Account Management (BAM) which enables reduction of the number of external bank accounts/fees.
- Bundle external payments and save charges on cross border payments. .
- Use SAP standard interface for uploading bank statements to a central platform.
- Monitoring of bank communications and transactions
Advantages of Central Payments:
- Centralize open item management and payment
- Centralize open item related processes (like credit management, collection, dunning, FX valuation)
- Run simple with optimized processes
- Save the cost with optimized processes .
- Improve the efficiency with integrated systems and platforms .
Standard Process Flows:
In this drawing, ECC (source) is cleared which is the standard solution. However, Some customer requirement is to have the document open in ECC (source) and in S/4HANA Cfin.
Clearing Options – 1
In this Option open item Documents and the corresponding cleared documents will be available in the Source System .only Open items will moved to Cfin system through SLT and will be technical cleared in Cfin System .
Clearing Options – 2
From R/3 standpoint:
- Clearing of documents for some company codes will happen in Source System (R/3)
- Replicate clearing document from Source (R/3) to Central Finance for those company codes
From S/4 standpoint:
- Clearing of documents for company codes live in S/4 in Central Finance.
- Replicate open items and clearing status to the central finance system for those company codes paid in S/4.
For restrictions and further information, please see note 2292043 Central Finance: Enable Clearing Transfer in Source System.
Clearing Options – 3
Invoices posted in the source system are marked as technically cleared and are replicated to Central Finance for clearing. Clearing and payment activities occur in the S/4 system.
Invoices in the source system are technically cleared and the payment document posted in Central Finance system is not replicated back to the source system. This can lead to the following functional restrictions:
- Accounts payable and accounts receivable reports in the source system do not indicate the actual clearing status. The actual clearing status is stored and reported only in the Central Finance system.
- The logistic processes that depend on the actual clearing status of invoices in the source system might be impacted.
- The settlement of credit card transactions can only be executed in the source systems. The clearing and settlement status will be replicated to the Central Finance system.
- Paying centrally also requires VAT and withholding tax reports to be executed in the Central Finance system due to restrictions on tax reporting.
Clearing Options – 4
Clearing and payment activities occur in the S/4 system and the clearing results are replicated to the source system. The clearing results replicated to the source system are a custom solution. The standard product does not offer (and does not plan to offer) back-postings.
For restrictions and further information, please see note
2346233 Central Payment for SAP Central Finance: Pilot Note for Activation of Central Payment.
2292043 Central Finance: Enable Clearing Transfer in Source System.
This blog is very useful for all the customers and Consultants who are planning to activate Central payment and to take correct decisions for clearing out of Multiple options .it Covers the Considerations of Every business process for Clearing Options .
Nice document, Thanks for sharing the document