Central Finance (FI-CF) is a S/4 HANA system facilitates connections to non-S/4 ERP systems and replicates transactional postings from these source systems. As of version on premise 1709, only finance postings at General Ledger level completely replicate and some limited functionality is added for Accounts Payable and Accounts Receivables processes. Central Finance System (CFS) provides new Business Use Cases and is aimed at a framework to standardize and rationalize financial posting logic at Central system.
First introduced in SAP S/4 1503 on premise edition, Central Finance has undergone significant changes over past two years. As of on premise 1709, Central Finance is further enhanced to support Central Payment, Central Tax Reporting and 3rd party system process integration.
Is CF a Standalone System?
No. CFS is not a standalone system. CFS solution is part of the finance suite with a separate license with in SAP S/4HANA system. By default, CFS is not activated and business function FINS_CFIN activation enables this functionality and provides necessary configuration, process and error handling nodes in S/4HANA system.
It is a complete S/4HANA system that includes logistics components such as MM, SD, PP, and so on, along with Finance modules – GL, AP, AR, Asset and Controlling modules – CCA, PS, and Profitability Analysis.
Landscape Scenarios for S/4HANA with Central Finance (FI-CF)
Almost every customer system landscape and business process requirements would be unique and result in that many combinations of options to consider for S/4HANA with CFS.
Common landscape scenarios:
- Only enable CFS in S/4HANA system and integrate all legacy systems
- Implement S/4HANA with logistics and finance for one location and integrate all other ERP systems to CFS
- Implement all legacy SAP system in S/4HANA and non-SAP systems replication to CFS
- Implement MDG for master data mapping for CFS and implement replication with legacy
Consolidate only related company codes and replicate Finance for standardized reporting and harmonized data.
CFS Only Landscape Scenario
As CFS provides non-disruptive way of experiencing new innovations in in-memory HANA® based system, roadmap assessment projects should consider CFS part of their S/4HANA migration strategy.
Business Process in Central Finance (FI-CF) System
- Data Mapping – it is initial mapping as well as on going mapping of master data finance objects such as GL Accounts, Cost Centers, Profit Centers with legacy transactional systems
- MDG Data Mapping – if CFS is implemented along with MDG landscape, mapping is performed part of MDG tool and reflected in CFS through standard interface
- Maintain Master Data – CF system needs all master data elements needed to be created and provide the information for mapping
- Error Handling – SAP Application Interface Framework(AIF) component is used for analyzing replication errors. Correcting errors reprocessing errors and deleting error lines are some common business processes
- Deletion of Replication Documents – CFS provides tools to delete documents which are replicated from FI-CF system. Deleting single document or a set of documents is possible
- Reconciliation – Financial postings from different systems need to be reconciled on regular basis with appropriate checks to make CF system for system records for Financials
- Comparison Reports – CFS provides specific reports to compare journal header line item reports of GL accounts and they can be used for reconciling the central system with feeder systems
- Central Finance: Comparison of FI Document Headers
- Central Finance: Comparison of FI Balances
- Central Finance: Comparison of FI Line Items
- Central Finance: Comparison of CO Document Headers
- Central Finance: Comparison of CO Balances
- Central Finance: Comparison of CO Line Items
- Initial Load – Initial Load is a complex and critical process. This is a one-time process, but would be an on-going process as new locations are rolled into replication landscape
- Open Item Replication – from latest versions of S/4HANA, open items from source system are replicated with open, cleared status. This enables S/4HANA to handle Central Payments
- Cross Company Code and Document Splitting – If document splitting is activated in CFS then all company codes which are part of splitting need to be transferred. Line item reports have to be run for cross company code reconciliation
- Handling of Reversal of documents in SAP – not all documents in CFS can be reversed. Special steps need to be followed in reversals
- Central Tax Reporting – from 1709 version onwards, tax reporting can be performed from CFS. Sales tax calculations, are still not possible for source system sales and purchases. However, GL line items carry tax information for reporting purposes. This reporting is still evolving as of 1709 and lot of restrictions apply
- Central Payments – from 1709 version Central Payment system is enabled and open items can be applied in Central System. This brings considerable value. As of this articles’ publication, a lot of restrictions still exist and needs careful consideration to make productive use
- Single Euro Payment Area (SEPA) also can be implemented part of payments
Limitations of Central Finance (FI-CF) System (Missing Functions)
- Fixed Assets – Fixed Assets lines in source system are not replicated into Fixed Assets in CFS. Asset and Depreciation journals in source system do replicate in CFS, but as General Ledger entries only
- Special Purpose Ledger – If source system has SPL part of their process landscape and having special ledger reporting, these postings are not replicated in CFS. Special process requirements need to be assessed to achieve these specific requirements
- CO-PCA – if CO-PCA is implemented in source system and if there are internal postings for stock movements in profit center valuation, they are not replicated in CFS system
- Sales Orders as Cost Objects – If source system line items are posted with Sales Orders (generally in COPA with Make to Order scenario), Sales Orders are not replicated into CFS. A unique set of Internal Orders may be mapped to this scenario
- Settlement Rules – Settlement rules in source system are not replicated in CFS
- Accounts Payable – Open Items replication from source system to CFS needs SAP notes to be implemented
- Accounts Receivable – Open Items replication from source system to CFS needs SAP notes to be implemented
- Tax Reporting – Even though tax reporting is available as of on premise 1709, many restrictions exist and this process can not be used for productive purpose as of now
- Document Reversals – Some restrictions apply for reversing the documents in central system
- Profitability Analysis(COPA) – Profitability Analysis implementation in Central Finance is based completely on different model than previous version to S/4. Account Based COPA is the new preferred version and all line items are posted into the universal journal. Source system Costing based CO line items are not replicated into Central Finance System
- Functional Area – Functional Area derivation is not supported in CFS system
- Special GL transactions – Transactions such as down payments, bills of payment, and noted items are not replicated into Central System
- Parking Documents – Documents parked in source system are not replicated into Central System
FI-CF system is an innovation from SAP to support non-disruptive adoption of S/4HANA. Since its inception, CFS gone through rapid changes to accommodate different requirements from customers. It is expected, all limitations would be crossed to make CFS the standard model for harmonization and standardization.
This blog post is part of GyanSys Solutions Lab’s weekly series titled SAP S/4 1709 Simplification Digest. Come back every Friday for a new post or you can subscribe below to get updated every time a new post is published! Contact us to learn more about changes in SAP S/4 1709 and how it impacts your organization.
- Key Features and Missing Functions of Central Finance (FI-CF) in S/4 On-Premise 1709 - November 15, 2017
- New Logic for SAP COPA Segment Number Determination - October 19, 2017