CENTRAL PAYMENTS IN CENTRAL FINANCE
This blog is intended for project members responsible for setting up the Central payment functionality in Central Finance . It explains the options for Central payment and the special Considerations for some process before activating Central payments .
Central Payment for SAP Central Finance allows you to make centralized payments and perform centralized clearing activities in the Central Finance system instead of each source system. It contains the following key features:
- Activate central payment by company code.
- For company codes that are activated for central payment, the invoices posted in the source systems are technically cleared. The invoices are replicated to the Central Finance system and are paid there.
- For company codes that are not activated for central payment, the invoices posted in source systems stay open and are paid in the source systems. The invoices and payment or clearing documents are replicated to the Central Finance system for reporting purpose.
- Mandate replication between source systems and the Central Finance system is automated so that SEPA direct debit is supported in the Central Finance system.
Customer needs to be aware of and accepting below restrictions and pass comprehensive customer testing on productive data and processes before going live for productive usage.
- Invoices in the source system are technically cleared, that is, they are flagged with ALE-EXTERN, and the Central Payment document is not replicated back to the source system.
- Central down payment integrating with MM is not supported. Central down payment integrating with SD is supported from S/4HANA OP 1809
- The settlement of credit card transactions remains at source systems, while the clearing and settlement status can be centrally monitored in the Central Finance system.
- The historical open items that you have in the source systems before switching to central payment must be paid and cleared in the source systems.
- Paying centrally also require VAT and withholding tax reports to be executed in the Central Finance system. There are restrictions on tax reporting.
Activation of central payments and impact in Business processes :
- Impact in receivables : When Central Payment is activated for a specific company code, open-item processing of all customer and vendor accounts for this company code is moved entirely to the Central Finance system. Open items in the relevant customer and vendor accounts are replicated from one or more source system to the Central Finance system.
- Impact in FSCM :
- Credit Management can be implemented in the Central Finance system. The exposure from open sales orders should be considered from the local system. The exposure from open FI-AR items should be considered from the central system. Credit checks are triggered in the local system (during sales order entry) and carried out in the central system
- If Central Payment is activated Dispute Management has to be implemented in the Central Finance system
- If Central Payment is activated for certain company codes Collections Management has to be implemented in addition in the Central Finance System.
- Central Payment can be activated per company code, the prerequisite for running Collections Management in Central Finance is that one collection segment is assigned to one company code.
- Foreign currency valuation : In new General Ledger Accounting as well as SAP Accounting in S/4HANA, the Valuation for Balance Sheet Preparation function (program SAPF100) is no longer supported in new General Ledger Accounting. This means that, during foreign currency valuation in new General Ledger Accounting, the system does not consider the valuation differences determined with this function. For this reason, you need to initialize the valuation differences in the open items to ensure that the results of foreign currency valuation are correct in Central Finance New General Ledger Accounting.
- Cash management : Cash & Liquidity Management can be implemented in the Central Finance system. The SD sales order / MM purchase order information required for the liquidity forecast can be retrieved via cash management interfaces, like iDoc. After processing the sales / purchase order and goods issue / receipt the customer and supplier invoice will be reflected in Cash Management and replace the order information.
- Value added Tax (VAT) : If Central Payment is active, VAT reporting must take place in the Central Finance system to guarantee a complete and correct tax reporting. If you have activated Central Payment for specific company codes, deferred tax must not be active in your source systems. Instead for these company codes deferred tax must be processed in the Central Finance system only.
- Withholding tax : If you have activated Central Payment for a certain company code, you post documents centrally with tax impact in the Central Finance system that are not available in the source system. That is why you must also do the tax reporting in the Central Finance system.Once Central Payment is active, withholding tax works without restrictions for countries where deduction takes place at the point of invoice posting as well as countries where deduction takes place at the point of payment.This does not apply to accumulated WHT. Accumulation data is available in the Central Finance system only for WHT at time of payment, not at point of invoice.
- Document Reverse :Each company must evaluate and decide how the reversal process to be executed after Central finance go-live with Central payment option.
The reversal process should be executed in the system where the document was created.
By standard, reversing documents replicated in Central finance is not allowed. The system checks in the document header if the document was created directly in Central finance or is was replicated.
- Down payment request :With S/4HANA 1809 release the down payment process integrated with SD is supported by Central finance. This means that there is a bidirectional data flow between source and Central finance systems, keeping correctly the references between the documents after payment process executed in the central system. Central down payment integrating with MM is not supported
I tried to cover some of the business process which has impacted after activation of Central Finance ,There are some other business process may be impacted too .
Notes Related to Central Payments :
2346233 – Central Payment for SAP Central Finance: Pilot Note for Activation of Central Payment
2292043 – Central Finance: Enable Clearing Transfer in Source System
2623514 – Central Finance and Withholding Tax – SAP Notes
2509047 – Central Finance: Required SAP Notes to support Tax Reporting out of the Central Finance System
2474760 – Central Payment: SD Down Payments
2654572 – Central Payment: Historical Open Items – Ensuring Payment and Clearing Takes Place in the Source System
This blog is very useful for all the customers and Consultants who are planning to activate Central payment .it Covers the Considerations of Every business process before activate Central payment .
If an invoice has been centrally paid in the target system, the reversal of invoice in source system can still be reversed. Is there any way to prevent this?
As per Note number 2346233 "If a document needs to be reversed or cancelled in the source system after Central Payment Activation, there is no system check if the corresponding document was already cleared in the Central Finance system. The user needs to check the status of the document himself and if necessary manually reset the clearing in the Central Finance system before executing the reversal in the source system."
When I try to look at the mentioned note i receive the message 'You are not entitled to access SAP Note/KBA 2346233'.
Can you share what the content is of this note?
Hi Wimine ,
Its a pilot note ,May be that why you are not able to see it .
2346233 - Central Payment for SAP Central Finance: Pilot Note for Activating Central Payment