Financial Close Options for SAP S/4HANA (as of release 2020)
Summary: Three financial closing applications are considered for new S/4HANA implementations. Limitations on licensing, compatibility, availability, and roadmap innovation are discussed. Spoiler Alert: SAP S/4HANA Cloud for Advanced Financial Closing (AFC) should be the primary consideration since it is functionally capable, flexible, as well as being SAP’s strategic option.
SAP has continued to evolve its product options for orchestrating financial close processes in a S/4HANA environment. This blog tries to identify the main options and provide some high-level guidance as to what products should be considered for new S/4HANA implementation.
The following illustration provides a quick reference guide to the main options:
SAP Financial Close Cockpit (FCc):
Customers using FCc in their ECC environments may continue to use FCc in S/4HANA under SAP’s compatibility scope process. The existing licensing in the source ECC system may cover the operation of FCc in the target S/4HANA. If electing to implement FCc in the S/4HANA environment, it will be subject to the time limitations imposed by SAP Note 2269324. Currently, this means that the right to continue to use FCc in S/4HANA expires at the end of 2025.
Although the functionality of FCc is available in S/4HANA, it is defined as “not the target architecture”. Some FCc business functions, such as FIN_ACC_LOCAL_CLOSE, FIN_ACC_LOCAL_CLOSE_2, and FIN_ACC_LOCAL_CLOSE_3, are flagged as obsolete in S/4HANA OP.
It is for these reasons that FCc is not recommended for any new S/4HANA implementations.
See SAP Note 2332547 – S4TWL – Closing Cockpit with S/4HANA OP for additional limitations.
SAP S/4HANA Financial Close Cockpit (SAP S/4HANA FCc):
SAP S/4HANA FCc was developed to take advantage of S/4HANA capabilities and efficiencies and is delivered as part of the core S/4HANA application. Use rights for SAP S/4HANA FCc does require separate licensing. SAP S/4HANA FCc is considered a matured product by SAP and will no longer develop new capabilities. This product will continue to only be supported for bug fixes and legally required updates.
This product is identified in the above illustration as yellow, indicating that it could be positioned with new S/4HANA implementations, but a more strategic financial closing solution is available and should be considered.
SAP S/4HANA Cloud for Advanced Financial Closing (AFC)
SAP S/4HANA Cloud for Advanced Financial Closing (AFC) is SAP’s strategic financial closing option. AFC is a cloud-based application that can automate many of the commonly performed closing activities. Manual tasks are supported with flexible workflow options, including workflow notifications (such as outlook calendar entries). AFC enjoys a modern user interface, robust reporting and dashboarding capabilities , as well as best practice content.
As SAP’s strategic option, AFC is subject to a rich roadmap of future product innovations which are clearly defined in the current roadmap as follows:
“[SAP] has structured our key roadmap topics into three main buckets:
The first one is the Closing Hub Scenario: This is about extending the integration and connectivity capabilities of AFC so that it can even better serve as a centralized closing hub in heterogeneous system landscapes – today we can already connect to both ECC and S/4 systems and looking at your future move to S/4, this would already work and integrate out-of-the-box.
The second bucket Intelligent Closing is about leveraging modern technologies to further automate and streamline the close – this includes even smarter automation, alerting and simulation capabilities than we have today.
And finally, the third bucket “Central Steering” is about aligning our multiple tools along the Record-to-Report process and enabling AFC to be the core orchestration engine. This would include that we use AFC to monitor processes like statutory reporting, organizational changes and integrate the entity close tighter with the Group Close.”
For further information refer to SAP note 2873915 – FAQ: SAP S/4HANA Cloud for advanced financial closing.
Product Documentation: https://help.sap.com/viewer/product/AFC/SHIP/en-US .
Additional blogs on this topic:
Hopefully this blog post was helpful!
Please add in the comment section any additional topics you think are valuable to have included in this and future blog posts.
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