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Brief Introduction of S4HANA Central Finance

I have learned number of things about SAP FICO from SAP Blogs and I owe the responsibility to give it back.  I just completed the associate level certification in central finance and have started working on central finance project as well, so thought to write gist of my learning & Understanding on Central Finance. Below is basic introduction, I will try to write topic wise details for more understanding.

Introduction

Central Finance addresses central process execution aspect of a central ERP system for finance and also helps SAP and non-SAP ERP System customers to quickly adapt SAP S/4HANA’s new and innovative functionality without disruption, without dependencies, and without impacting your ERP source system landscape.

Central Finance allows to consolidate financial reporting data in an SAP S/4HANA environment while maintaining the integrity of the legacy environment, thereby allows the ability to adopt new technology.

Key SAP products in the enabling layer are:

  1. SAP S/4HANA for central finance foundation: CENTRAL FINANCE is an S4HANA Finance  system having advantages of Universal Journal (ACDOCA), Intercompany Reconciliation, Receivables Management, Central Payments, and Closing Cockpit (provide opportunity for efficiency improvement by time saving while closing operation), especially in Shared Services environment.
  2. SAP Landscape Transformation Replication Server {SAP LT Replication Server): Use of SLT (SAP Landscape Transformation Replication Server) is mandatory to replicate the FI/CO Objects and documents from source system (SAP or Non-SAP). SLT Can be deployed as separate instance, on source system or in CENTRAL FINANCE system.
  3. SAP Master Data Governance (SAP MDG): Use of SAP MDG is optional, to handle data mapping from source to target system. SAP MDG provides Master data governance to create & Change master data centrally. The MDG mapping repository contains key mapping (for master data), and value mapping (for customizing). In CENTRAL FINANCE projects it can be deployed either as a Hub or embedded with CENTRAL FINANCE system. If MDG is deployed as a Hub, then MDG is a separate system.
  4. SAP Application Integration Framework (AIF): AIF is the dedicated monitoring tool for SLT based Replication. While replicating data from SLT to Central Finance, configuration and data checks are carried out by AIF, SAP AIF (Application Interface Framework) plays role to handle how errors are queued, monitored, alerted, and reprocessed.
  5. standard SAP integration mechanisms, such as or Process Integration (SAP PI) Application Link Enabling (ALE), iDocs, RFC and other integration mechanisms

SAP S/4HANA Central Finance Architecture

Above diagram denotes how S4HANA Central Finance is used with SLT, MDG (Business Mapping -harmonize the master data in document posted in Central Finance) and AIF(Error Handling) to post Cost Objects and documents (Financial Accounting (FI)/Management Accounting (CO)) into S4HANA Universal Journal using Internal Accounting Interface.

DATA REPLICATION

DATA REPLICATION is a key of CENTRAL FINANCE, and without data replication transactions can’t be process and no reports will get executed. Before starting these replication scenarios, perform an initial load. Data replication is bifurcated between two parts:

  1. The first part is Initial load from the source ERP system (Loads exiting data)
  2. The second part is Online (real time) replication from the source ERP system (New data and changes in existing data)

Central finance provides three main interfaces to replicate postings (cost object, Finance and Controlling posting, and Controlling internal posting). All Controlling Cost objects and FICO/CO postings in central finance go through these below interfaces. These interfaces process the data from source systems to Central Finance (so posting gets replicated with harmonized data).

These are the interfaces, which are implemented as function modules:

  • Replication of FI/CO postings (FINS_CFIN_AC_DOC_GENERATE)
  • Replication of CO-internal postings (FINS_CFIN_CO_CENTRAL_POSTING)
  • Replication of cost objects (FINS_CFIN_CO_OBJECT_ASSIGN)

Initial Load in Central Finance

The initial load is used to transfer postings from a period, for example the current fiscal year, from source ERP systems to Central Finance.

Before initial load, please ensure central finance has harmonized organizational data and master data, for all the entities that is intend to be include in accounting document.

Initial Load of should be executed in below order

  1. Cost objects: Load Cost Objects, required for the FI/CO and CO posting in the Central Finance. Data selection uses SLT Filters and data replication is using SLT. Monitoring is done by AIF
  2. FI/CO posting: Load historical FI/CO documents, data selection using customization in source system and data replication using MDF (using RFC). Monitoring is done in application log. Make sure that all the postings are successfully replicated in the central finance system.
  3. CO internal posting: Load internal CO posting, Data selection uses SLT Filters and data replication is using SLT. Monitoring is done by AIF.

Correctness of the data replication is ensured by using Reconciliation Reports provided for FI & CO (Document Count, Balance Comparison and Document Comparison).

Real-Time Replication in Central Finance

SAP SLT Server is used for data replication and procedure of data flow different depending on source system (SAP or NON-SAP)

DATA Replication from NON-SAP System:

Extracting the data from NON SAP system has to be done by customer project. Third party interface with staging table (CFIN_ACCxx) document from a Non-SAP System gets replicated to SAP S/4HANA Central Finance system. Following kind of documents can be replicated from Non-SAP Systems:

  • General journal entries (with selected CO objects)
  • Documents with business partner

Post to that, SAP AIF does the data processing (key mapping and value mapping provided by SAP MDG) and finally the document gets updated to Central Finance data base.  AIF monitors the Finance document processing. Documents can be monitored in AIF with Errors if any, errors can be corrected and posting can be restarted.

DATA Replication from SAP System:

Once FICO document is triggered in to Database, DB Trigger the documents into Logging Tables in source system. In real time SLT collects documents and send it to the Central finance using interface.

To post documents into Central Finance, additional inform is required, these details are not available in tables (BKPF & BSEG). That’s why information needed for document posting is stored in CFIN_ACCHD (being header table).

CO Secondary posting is done from COBK (Header) and COEP (sub table).

Post initial load, the SLT monitors the database triggers on the Source ERP System and save these changes to logging tables and post these changes to the Central Finance. Business mapping is used to harmonize the master data in the Document posted in Central Finance. SAP AIF does the data processing, error handling.

Validation and Reconciliation in Central Finance

Reconciliation reports are available in all Central Finance release and to be executed in Central Finance system. Selection parameters (Company Code, GL Account Number etc.) refer to source system.

Level of Analysis Comparison Report Code
1 FI Document Count FINS_CFIN_DEV_FI_DOC_COUNT
2 FI Balance Comparison FINS_CFIN_DEV_FI_BAL_COMPARE
3 FI Documents Comparison FINS_CFIN_DEV_FI_DOC_COUNT
1 CO Document Count FINS_CFIN_DEV_CO_DOC_COUNT
2 CO Balance Comparison FINS_CFIN_DEV_CO_BAL_COMPARE
3 CO Documents Comparison FINS_CFIN_DEV_CO_DOC_COUNT

Above table denotes: Reconciliation Reports with name and purpose

Conclusion:

S4HANA Central Finance is a complete S/4HANA system that includes other logistics components as well i.e. MM, SD, PP, etc. For some company codes you can replicate financial postings from source systems into the Central Finance system and also run your normal other business process for other company codes that in your S/4HANA system, all within the same S4HANA client.

We can see CENTRAL FINANCE is going to bring a big transformation in ERP and reporting environment and it is going to be more and more efficient in upcoming release. Thank you very much reading, please suggest if there is any scope for improvement.

References & Further Reading

SAP Help Portal

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