SAP Central Finance or SAP S/4HANA Central Finance?
In lot of conversations I have seen customers are not clear in differentiating SAP S/4HANA Central Finance and SAP S/4HANA Finance and indeed SAP S/4HANA.
In this blog I will share insights on these three topics and will try to simplify.
SAP S/4HANA finance was the initial version of product and was meant to be upgraded from ECC via migration but migration can be as disruptive as anything so SAP came up with an idea of adding a simplified deployment option called SAP S/4HANA Central Finance and it is still being seen as a deployment option and not an end state of the architecture. But it result in confusion and raised questions like:
- Is Central Finance a product?
- Is Central Finance a scenario?
- Is Central Finance an option?
SAP S/4HANA Central Finance – This is a part of S/4HANA and as I said a deployment option so it’s not being implemented on a standalone CFIN box. There is no SAP implementable/installable product called CFIN rather it’s activated via business function on SAP S/4HANA box. Customer do the following:
- Install S/4HANA,
- activate CFIN business function and
- then the functionality of replication from source (SAP or Non SAP) can be used. Once the data is replicated the job of CFIN is complete.
What can be replicated?
For more details refer – BLOG
SAP S/4HANA Finance – Once we have data in Central Finance we can run transactions on that data but that takes it out of the CFIN layer and uses S/4HANA Finance layer. Some common functionalities include below:
- SAP Group Reporting
- SAP Credit Management
- SAP Collections & dispute Management,
- SAP Cash Management,
- SAP Analytics Cloud (SAC)
SAP S/4HANA – After starting operations in SAP S/4HANA Finance the customer has to decide how to transform the logistics processes from source systems to S/4HANA systems and that’s the stage where the life of the source systems will end as well as the CFIN functionality will also come to an end since – No Source system, No Central Finance feature.
That’s why it is always placed as a deployment option so that customer start with a piece of transformation and will go on for a bigger journey with a less disruptive model.
Central Finance as End State (possible):
- SAP S/4HANA Central Finance as Reporting Hub
- SAP S/4HANA Central Finance as M& A Accelerator
- SAP S/4HANA Central Finance as Shared Services consolidator
- SAP S/4HANA Central Finance as Central Single Instance with logistics
Using SAP S/4HANA Central Finance system for business processes
As the Central Finance system is a part of S/4HANA system, it can also be used to run business processes, including logistics (MM, SD, PP, etc.) for company codes that are native to the system. You can replicate financial postings from source systems into the Central Finance system for some company codes and also run your normal business processes for other company codes that originate in your S/4HANA system, all within the same client.
**images may have been borrowed from internet with due credits.
And Actually its not SAP Central Finance rather SAP S/4HANA Central Finance
Thank for clarifying. It is indeed sometimes not that easy to understand how things work.
Agree and that’s why the core decisions get distracted so it’s important to know what is stepping stone and what’s end product
It perfectly makes sense. Lot of clarity still needed in the so called digital transformation world.
Very informative content
Very clear and detailed. Thanks
Thank you Nitin got this deatiled explanation
Agree that the concept is still not clear to many organisations..
thanks for clarifying
Hi Nitin, I find the title of your blog a bit confusing: "SAP Central Finance or SAP S/4HANA Central Finance?" - isn't there one "central" too many? In your introduction you do state "... differentiating SAP S/4HANA Central Finance and SAP S/4HANA Finance", and that makes sense to me.
People generally call it SAP Central Finance but if you realise that their is nothing called sap central finance rather central finance is a component of S/4hana. That’s why I am differentiating...
I saw this confusion with lot of customers. They say we are implementing CFIN but for implementing S/4 they not clear whether same S/4 box is sufficient or do they need another box
I misunderstood that aspect of the article, thanks for clarifying.
Thanks for detailed information
For customers that have difficulties to decide if they have a case for central finance or rather go for other options to cover their group finance reporting and other requirements I have written this entry level article: https://groups.community.sap.com/t5/enterprise-architecture/application-landscape-for-corporate-financial-reporting-do-you/ta-p/5056
might be interesting in this environment.