What Is SAP Central Finance?

SAP offers Central Finance as a deployment option to streamline processes and consolidate data for unified reporting and centralized processes regardless of the source systems.

In addition, Central Finance can be leveraged as a financial hub for processes outside of SAP S/4HANA. Central Finance has been available since the simple finance inception by the name of Central Journal. SAP rebranded Central Journal as Central Finance with several additional features. Nevertheless, there has been a lot of confusion among businesses and SAP user communities to truly understand what Central Finance is and its adoption strategies. The figure below shows how the different views of Central Finance can be perceived by business users and IT professionals.

Central Finance represents a new approach to finance and is based on a new set of technologies in a central SAP ERP system. 

Expensive custom integration and traditional legacy system technologies create barriers that prevent the provision of central reporting and transaction processing.

Central Finance is a more easily deployable central system for finance, enabling consolidated transaction execution, business planning, group consolidation, and reporting and analytics—all out of a single system without the need for further data duplication.

Central Finance as a System

Central Finance serves as a financial data hub by receiving replication data from both SAP and non-SAP source systems. The financial hub can serve to integrate other solutions beyond SAP S/4HANA. With Central Finance, customers with complex and distributed landscapes across geographies avert high costs of implementations, which come with risks of migrating and upgrading to a new system. Central Finance as a system offers customers a quick way to adopt SAP’s architecturally advanced in-memory database and the latest reporting innovations with the Universal Journal without interrupting existing processes and systems with a sidecar approach. In this approach, Central Finance, in essence, replicates both financial and nonfinancial transactions from different source ERP systems into one single SAP S/4HANA system.

While replicating data from source systems, existing processes and system landscape aren’t interrupted. A nondisruptive solution means existing system processes remain untouched and current business operations aren’t affected. Transaction-level data is replicated into Central Finance and leveraged with SAP’s latest innovations—SAP HANA optimizations with built-in memory and cutting-edge user interface (UI) tools such as SAP Fiori, SAP Lumira, SAP Analytics Cloud, SAP Screen Personas, and so on. In addition, the system helps businesses transform mapping and harmonize master data, which leads to the SAP S/4HANA system of flexible data models. With harmonized master data and centralized data, you can perform planning, consolidating, and reporting activities.

Central Finance is a Silver Bullet

However, this “more of the same” approach generally does not remove complexity but instead increases it. Every additional application or system requires even more interfaces and even more redundant transformations. A new report added requires another data extract, perhaps another data model, and still may not provide information across the entire enterprise or may not use all the dimensions captured in the financial transaction.

By definition, a silver bullet refers to something that cuts through complexity and provides an immediate solution to a problem. Central Finance is a silver bullet for many finance issues, as shown in the figure below.

Key Innovations in Central Finance

Key innovations that make Central Finance a silver-bullet solution include the following:

SAP HANA as a High-Performance Database

The arrival of the SAP HANA database, a high-performance database, has removed the barriers stemming from relational database design principles. Data no longer needs to be parsed and moved around to applications in redundant pieces and portions.

End users can consume financial data directly via their frontend applications using the Universal Journal of Central Finance, rather than having to extract and transform datasets as prerequisites to consuming the data.

SAP S/4HANA Finance Data Model

The SAP HANA database has resulted in a new architecture for the SAP S/4HANA Finance data model and has introduced the Universal Journal, a single table that captures all financial data, rather than the data being spread out to different tables for the general ledger (G/L), subledgers, or management accounting.

The customizable Universal Journal can capture additional dimensionality like the color of a product, the age of a customer, the time of the day, and even the temperature at the time of a posting for microsegment profitability analysis.

SAP S/4HANA Finance Embedded Applications

With SAP S/4HANA, you can post financial transactions in the same system as you would your business planning, group consolidation, and shared services. Your users will share the same set of transaction data and master data and benefit from real-time reporting without further data duplication.

Central Finance as a Product

This is delivered with the SAP S/4HANA suite as a product. To achieve goals of nondisruptive to existing processes and systems, Central Finance comes with its own tool set to support initial loads and replication: logging, mapping, error correction, initial load monitoring tools, reconciliation and comparison reports, and so on. Central Finance as a product is delivered with SAP Landscape Transformation Replication Server, SAP Application Interface Framework content, business configuration sets (BC sets), SAP Master Data Governance, and other supporting tools. Central Finance is scalable to adopt changes as business grows.

Cross-System Reporting

Central Finance provides cross-system reporting and centralized process execution capabilities. It accommodates replication from multiple systems, outlined below.

SAP Source Systems

Integration of SAP ERP source systems today is supported by standard technical mapping content, which allows financial transactions from ERP systems to be brought in no matter the release of the source system. In a worst-case scenario, where the source system is too old to integrate through the standard capabilities, use the Central Finance third-party staging area.

Non-SAP Source Systems

The integration of non-SAP ERP source systems can be accommodated through the standard Central Finance third-party staging area. Data provisioning to that staging area can be custom-built or can use predefined templates like Magnitude’s SourceConnect accelerator, which has predefined technical mapping templates and years of quality improvements built in for fast, cheap, high-quality integration.

Using predefined templates accelerates your non-SAP ERP integration, allowing the technical mapping of a source system in as little as 15 to 20 days. Mapping financial data from non-SAP ERP systems is not a big deal!

Subsidiary Instances Such as SAP S/4HANA Cloud in a Public Cloud

Integration of SAP S/4HANA Cloud instances, used to move selected businesses or regional systems into the cloud, is supported today by the standard technical mapping content in Central Finance.

Financial Data on Spreadsheets

Smaller businesses or entities in selected regions, and sometimes systems with offline, batch submissions, can be integrated today with the standard Central Finance third-party staging area. To increase adoption, even in this case, we recommend using predefined templates as accelerators.

Future ERP Systems

Integration of future ERP systems follows the routes mentioned earlier in this list, whether for an SAP source system or a non-SAP ERP source system. The advantage of Central Finance is that it serves as a platform, with the underlying replication and error correction infrastructure, built-out central process execution, and a playbook of project plans from previous ERP system integration activities that can be reused and scaled for the onboarding of additional entities and systems.

Central Finance as a Solution

You can streamline and centralize financial business processes in a single central location. Master data and configurations can be harmonized and transformed to support the streamlined and standardized processes. Centralized process execution capabilities can be introduced as an incremental step with the flexibility of business requirements to simplify business processes with SAP-delivered leading practices. Central Finance establishes the foundation for centralized financial processes, including central payment, central credit management, central collections and dispute management, central project reporting, central tax reporting, central closing, operational control, and so on.

Coverage Across All Legal Entities and Lines of Business in an Organization

Financial transactions from any ERP source system in the organization, no matter the ERP source system the data resides in or how many ERP source systems or ERP vendors are involved—or how old they are—can be brought together into one central system. Because transactions are reposted as standard SAP financial transactions into Central Finance, a complete audit trail, with drilldown capability to source transactions, is available.

A Single Source of Truth for Financial Data

All the financial transactions of the organization are stored in one and only one table, the Universal Journal, which is updated in real time every time a new transaction is added anywhere in the organizations. This information is easily consumable for all users directly from the various SAP and non-SAP frontends, including Microsoft Excel. No additional extract, transform, and load (ETL) tools, data provisioning, or data extraction is required; information is directly accessible by samestack SAP S/4HANA applications like SAP Business Planning and Consolidation (SAP BPC).

The Central Finance system is built scalable, flexible, and adaptable for changing business requirements. With the implementation of Central Finance, the system becomes the single source of truth for financial data. Therefore, companies phase out source systems as they become out of support or outdated with numerous customizations.

The figure below displays important benefits of using Central Finance.

Here are a few additional general benefits obtained by implementing Central Finance:

• Real-time replication of source data without any interruption to existing business operations. The advantage of a nondisruptive approach enables customers to adopt SAP S/4HANA in a phased approach without touching the existing system immediately. In an incremental step, you’ll phase out legacy systems at the customer’s convenience.
• Centralized data in the Universal Journal, which provides a single source of truth for consolidated financial reporting. This enables faster consolidating and reporting and soft-closing capabilities.
• Group reporting capability with real-time data received from multiple source systems within an enterprise.
• Segment reporting capabilities to fulfill ASC 280 segment reporting.
• Harmonization of master data across multiple source systems to improve quality of master data and deduplication. For example, harmonized master data and reporting structures are available across various entities for CoA, cost center, profit center, vendors, customers, plants, and so on.
• Integrated business planning and forecasting for both short-term and long-term with centralized data.
• Centralized services such as central payment or central credit, dispute, and collections capabilities. Processes are simplified by eliminating duplicate processes and efforts, for example, central payment, central tax reporting, shared services, and so on.
• Personalized user experience with SAP Fiori and other presentation tools with SAP S/4HANA innovations.
• Improved productivity as a result of using cutting-edge UIs such as SAP Fiori, SAP Lumira, core data services (CDS) views, and so on.
• Centralized data for multiple system landscapes single source of truth via Central Finance’s Universal Journal (multiple ERPs into one global SAP instance).
• Quickly integrate newly acquired companies into the system landscape via mergers and acquisitions.
• Replicate all open items to different systems with management and real-time liquidity reports, bank balances, and cash positions.

Use Cases for Central Finance

With centralized replicated data, Central Finance offers customers consolidated reporting with a single source of truth view of an enterprise.

As a result, with a Central Finance implementation, companies can improve their decision-making, compliance, and operational processes across the enterprise significantly. Central Finance brings several use cases to customers, as shown in the figure below. The use cases are divided into three broad categories: process transformation, technology transformation, and corporate strategy and planning.

Let’s explore each category of use case next.

Process Transformation

Organizations with heterogeneous ERP landscapes often end up with outdated, ineffective, and inefficient processes. With a Central Finance implementation, you can transform such outdated or inefficient processes by adopting SAP S/4HANA leading practices and optimizing processes. The streamlined financial processes in Central Finance result in improved reporting, better management decision-making, and compliance with regulatory requirements. Let’s explore the important processes related to transformation use cases:

Legacy Process Consolidation

With Central Finance implementation, customers have an opportunity to streamline outdated and fragmented or duplicated financial processes into harmonized centralized processes with a single source of truth. Inefficient or outdated legacy processes cause companies to spend more time and money in manual processes, resulting in data silos and longer financial close cycles. To remain competitive in this emerging market, companies must evaluate legacy processes and consider consolidating or unifying to streamline financial processes.

Centralization and Standardization of Financial Processes

For enterprises with heterogenous landscapes, to remain competitive, Central Finance provides opportunities to standardize and harmonize financial processes across the enterprise. The process of unification can begin with a harmonized CoA design in Central Finance that caters to current and future business processes. Standardization can then be expanded to other financial processes to centralize processes. For example, a few processes that can be centralized in Central Finance include the following:

• Centralized payment
• Centralized credit
• Centralized dispute processes
• Centralized collection processes

Fast Financial Close

With the Universal Journal in SAP S/4HANA, the advanced financial closing cockpit, and other innovative tools, customers will be able to accelerate closing by organizing, automating, and governing closing tasks. Fast financial close is achieved with improved processes as a result of the Central Finance centralized processes and following leading practices in SAP S/4HANA. Key benefits of fast close are as follows:

• Visibility to pre-closing activities much early in the period
• Quick access to data as a result of real-time data availability from various source systems
• Accelerated closing with innovative tools offered in SAP S/4HANA
• Real-time reconciliation due to the Universal Journal
• Improved cash flow due to real-time insights into liquidity and forecasts for all ERP systems.
• Support for local and statutory reporting

Central Close

With Central Finance, companies can perform centralized close by consolidating and integrating financial processes across multiple source systems. With SAP-delivered closing tools such as intercompany reconciliation and advanced finance closing in SAP S/4HANA, you can organize and govern closing tasks to improve their accuracy. In addition, central close helps organizations comply with regulatory requirements and provide timely insights to financial data for better decision making:

• Faster and efficient reconciliation process due to the Universal Journal
• Availability of SAP S/4HANA closing tools
• Enhanced workflow automation and approval processes related to closing

Compliance

Central Finance can leverage the SAP Document and Reporting Compliance tool, which is a next-generation legal and statutory reporting tool to support reporting and compliance needs for entities operating worldwide. This tool is supported in Central Finance to comply with country-specific reporting requirements such as electronic invoicing, real-time monitoring, and real-time visibility of processes to stakeholders. Central Finance coupled with SAP Document and Reporting Compliance brings customers the following:

• Reduced risk of noncompliance penalties
• Reduced errors as a result of process automation
• Real-time insights into compliance processes and data
• Mitigated audit risks in a distributed landscape with centralized data to facilitate audit processes

Group Reporting

With Central Finance and group reporting, you have opportunities to standardize group reporting–related financial processes. Group reporting processes are often complex due to the nature of multiple processes unified in Central Finance. However, with financial data harmonization and group reporting integration with the Universal Journal, SAP made consolidated entity reporting seamless in Central Finance. Key benefits include the following:

• Real-time integration of centralized data for consolidation and group reporting
• Unified data model with the Universal Journal and reporting
• Automated consolidation-related tasks
• Intercompany reconciliation and elimination
• Compliance and regulatory reporting
• Quicker management decision-making with real-time insights

Technology Transformation

Next, we’ll explore the technology-related use cases by transitioning to Central Finance:

• Sidecar adoption: With Central Finance implemented with the sidecar approach, you can leverage SAP S/4HANA innovations without interrupting the core ERP systems. This approach provides the immediate benefits of most SAP S/4HANA innovations in incremental ways while keeping legacy systems intact. Several benefits of a sidecar approach are listed here:
  • Reap SAP S/4HANA benefits immediately in incremental steps with a nondisruptive approach to core ERP systems.
  • Transition to SAP S/4HANA gradually or in a phased approach.
  • Real-time replication of financial and nonfinancial data provides consolidated reporting capabilities.
  • Increased scalability is provided compared to core ERP systems.
  • Fallback to core ERP systems is possible for risk mitigation.
• Move to cloud: Central Finance provides customers an opportunity to migrate from an on-premise system to a cloud environment. The cloud environment can be either an SAP cloud or other third-party clouds such as Microsoft Azure or Amazon AWS. the cloud environment helps customers centralize operations. In Central Finance view, a cloud environment provides customers with several benefits:
  • A scalable cloud environment infrastructure to support growing business needs
  • Flexibility in implementing the solution
  • Reduced capital infrastructure cost and maintenance cost
  • Less downtime due to service level agreements with cloud providers
  • Increased performance as a result of redundancy and failover infrastructure
• Shared services: Central processes in a shared service model is one of the key use cases of Central Finance. Centralization of processes with the Universal Journal leads customers to leverage shared services opportunities in various departments such as accounts payable, accounts receivable, and payroll. Most important key benefits of Central Finance shared services include the following:
  • Unified data model to ensure shared services uses a single source of truth
  • Cost reduction due to simplification and reduced duplication of efforts across multiple source systems, resulting in reduced redundancies of work and reduced overhead cost
  • Economies of scale due to bulk processing and operations from Central Finance
  • Standardized and uniform processes across core ERP systems

Corporate Strategy and Planning

A company’s corporate strategy and planning begins with a vision and mission statements that dictate the overall direction of a company and its key objectives. It’s imperative Central Finance implementation is no exception when it comes to aligning both the short-term and long-term goals of a company. Corporate strategy and planning include mergers, acquisitions, consolidations, divestures, carveouts, and joint ventures. Let’s discuss each corporate strategy next:

• Mergers, acquisitions, and consolidations: Corporations evaluate mergers, acquisitions, and consolidations opportunities as part of their goals to keep a competitive edge with rivals or as part of overall strategic goals. This includes adding a new subsidiary or existing subsidiary to the system landscape. Central Finance provides companies with opportunities by integrating acquired or merged companies by simply replicating financial transactions to Central Finance without interrupting the existing acquisitions processes. In addition, Central Finance streamlines and centralizes processes from the acquired or merged company. This leads to a report on a unified view of mergers, acquisitions, and consolidated entities using consolidated data in the Universal Journal.
• Divestitures: Companies divest or dispose of a business unit for multiple reasons such as strategic decisions or to streamline operations. Central Finance helps in such situations to divest data into a new instance by replicating data from a source system. You can identify divesture requirements and strategize how the Central Finance solution fits into those situations.
• Carveouts: Carveouts lead to selling a subsidiary or spinning a division to form an independent legal entity. The Central Finance sidecar approach could be used to replicate both financial and nonfinancial data on the newly setup company code. In addition, selective data transmission is also possible based on the project requirements.
• Joint ventures: Companies come forward to form joint ventures as a collaborate effort to achieve a specific goal or project. This is common in the oil and gas industries. Central Finance supports replicating joint venture accounting (JVA) data to Central Finance.

Rollout Strategies

How ERP projects are deployed is largely influenced by the rollout type, the key milestones, and the scope—and Central Finance is no exception.

Once you’ve made the decision to utilize Central Finance, it’s time to choose the actual rollout method. For SAP projects, this means that after the initial setup, also known as a template, the system is replicated. In this blog post, we’ll discuss various Central Finance rollout strategies.

Iterative Rollout Versus Big Bang

Whether you decide to implement Central Finance as a single large project or as a sequence of smaller projects is mostly influenced by your source systems, which are defined by certain characteristics, such as:

Source Types

A large portion of the implementation time is spent connecting, mapping, and reconciling your local source systems to the Central Finance system. If your organization is leveraging a mix of SAP and non-SAP source ERP systems and versions as the source systems, we recommend phasing the implementation of these source systems by software vendor and version.

Source Systems

Should all source systems be implemented at once or one after the other? How you answer this question usually depends on how much of your business is contained in each source system. For instance, a company that has historically grown through mergers and acquisitions might end up with one ERP system supporting 80% of the revenue, while the remaining 20% is shared across a handful of other ERP systems. In this case, you might choose to start with the larger and more complex system, expecting more value when the system is live, or you might start with a smaller system as a pilot, expecting a shorter implementation period for the system to go live.

Source Company Codes

The most granular organizational structure in Central Finance is the company code. Once you’ve selected and prioritized your key source systems, you can include all company codes or restrict the implementation to only certain company codes. Be aware that merging a few company codes from different source systems is much more complex than merging many company codes from the same source system. This consideration stems from the integrated nature of SAP ERP systems: A single source system has more similar organizational structures, such as controlling areas, company codes, charts of accounts, and so on.

Level of Granularity

Something to keep in mind when integrating non-SAP systems is that not all ERP systems work on the same level of granularity. For instance, simpler software packages might not have objects corresponding to sales orders or internal orders. Thus, when performing sales, you might not be able to extract some information, such as volumes, unit prices, or cost components. In addition, some basic configurations might differ, such as units of measure, fiscal periods, or currency conversions. These aspects must be taken into account when you’re considering the integration of non-SAP source systems.

An iterative rollout starts from a core template, usually centered on headquarters (more value) or a small country (less risk) before being extended to additional countries, with variations for localization. This approach is preferred for large and/or complex implementations.

On the other hand, a big bang approach implements the ERP system for the whole organization, including all countries and subsidiaries at once. However, this approach is more suitable for smaller organizations.

Milestone-Based Rollout

Central Finance can be used for different scenarios. When implemented as the underlying platform for real-time consolidation, planning with embedded SAP Business Planning and Consolidation (SAP BPC), or machine learning, key milestones must be deployed and validated before the next layer of applications can be addressed. A typical strategy starts with setting up Central Finance as a foundation layer running in parallel to the source ERP system until the data in Central Finance is considered reliable. Only then can project teams build upon the platform and use Central Finance itself as a source for additional applications.

Examples of milestones are: 

• Creating a foundation layer with a new information model
• Using Central Finance for reporting
• Replacing integration between local systems and the data warehouse and connecting with the central system
• Expanding the scope to budgeting/forecasting or consolidation on Central Finance
• Improved reporting with SAP Analytics Cloud connected to the source system
• Activating accounts payables (AP), accounts receivables (AR), or treasury functionality on top of the central system
• Activating applications like SAP In-House Cash

By adopting a milestone-based approach, as opposed to the big bang approach, project teams can deliver value to your business and justify the budget for additional scope.

Process Selection

When implementing Central Finance, you must understand the interdependency among some Central Finance processes. As shown in the figures below, processes are built on top of other processes, starting with the reporting hub at the bottom and leading up to more complex processes like treasury or consolidation. These core finance processes must be up and running before logistics processes can be implemented.

Implementation Best Practices

We recommend following leading practices for a successful Central Finance implementation. In this blog post, we’ll go over each of the best practices.

Master Data

Below are the best practices for master data within Central Finance.

Data Cleansing

Open items transferred during the initial load may cause performance bottlenecks and delays in completing the initial load validation. SAP strongly recommends converting unwanted general ledger open items to normal general ledger accounts. In addition, you must clear open items from both current and prior years to the extent possible as it directly impacts performance of the initial load.

Review important master data elements such as general ledger accounts, profit centers, cost centers, customers, and vendors in the source system. Lock inactive, redundant, and duplicate objects.

SAP recommends the MCDelta tool for master data profiling. The tool offers customers accelerate the implementation with Central Finance adoption content.

Business Mapping Rules

Ensure you’ve followed data harmonization rules for all master data, especially the general ledger harmonization guide to avoid mistakes during the mapping exercise. General ledger attributes must be aligned with corresponding general ledger master in the source system. Master data is the most time-consuming activity in Central Finance projects.

• Data mapping also derives final reporting requirements. You must keep reporting requirements while performing business mapping rules.
• Avoid generic or dummy mapping.
• Remove the blocking indicator of master data, especially during the initial load.

Data Inconsistencies and Configuration Inconsistencies

Be sure to run configuration and master data consistency reports to avoid data inconsistencies.

SAP provided the permanent constancy check to alert stakeholders to check configuration consistency and resolve errors quickly.

Master Data Load and Mapping

Perform data profiling prior to the initial load and real-time replication to avoid master data errors.

Both financial and nonfinancial master data should be loaded prior to beginning the initial load and online replication activity.

Both SAP Master Data Governance key mapping and value mapping must be completed.

Data Governance

Enforce the right level of data governance on creation and change of master data to prevent duplicate records.

Third-Party System

Be sure adequate scope is considered for third-party system master data harmonization as different ERP systems store data differently and often terminology is different. This makes more time to achieve data harmonization.

SAP Landscape Transformation Replication Server

Below are best practices related to SAP Landscape Transformation Replication Server.

Installation

Have a separate SAP Landscape Transformation box to connect the source system and Central Finance system as it brings multiple benefits, especially during monthly maintenance and upgrades.

Determine the Data Migration Server (DMIS) version of SAP Landscape Transformation ahead of time based on the source system and Central Finance service pack versions.

Performance

Data volume must be assessed prior to configuring SAP Landscape Transformation. The landscape sizing and memory should support a high volume of background processing.

Configure SAP Landscape Transformation in an optimum way, so the parallelization of the calculation jobs transfers data without any performance bottlenecks.

Maintain SAP Landscape Transformation data transfer jobs by considering data volume.

SAP Application Interface Framework

Here are the best practices for SAP AIF.

Runtime Configuration Object

Before you begin replication, define SAP Application Interface Framework runtime configuration groups (Transaction /AIF/PERS_CGR) under the /FINCF namespace for each replication object. This will help on serialization of data being posted.

Assign the runtime configuration to the appropriate replication objects.

SAP Application Interface Framework Message Archiving

For companies with large volumes of transaction data, SAP Application Interface Framework messages fills up quickly and thereby impact performance. Archive SAP Application Interface Framework messages on a periodic basis to improve performance of the interface. SAP recommends the following:

• Archive the SAP Application Interface Framework XML messages relating to documents that have been already posted successfully or posted with warning. To implement archiving, Transaction SARA can be used. /AIF/PERSX is the archiving object.
• For SAP Application Interface Framework XML messages that are in-process or with error status, the system doesn’t allow you to archive or delete. 

SAP Application Interface Framework Security

Assign SAP Application Interface Framework security roles as necessary to prevent last-minute errors.

FI-CO Initial Load

Below are the best practices for the initial FI-CO load.

Initial Load Groups

Have a separate initial load group for company codes with intercompany transaction postings.

Configure the initial load groups for the source company codes with a smaller data set to avoid performance issues.

Initial Load Extraction

Work with Basis to ensure you have enough dialog work processes in the source system and background processes in the target Central Finance system to extract the FI documents, open items, and balances.

Ensure you have enough memory to process the initial load extraction. Otherwise, you’ll see cancelled jobs that require further efforts to delete and restart.

During cutover, extract data during minimal postings or off business hours to save time on the delta run.

Initial Load Mapping and Simulation

Run both mapping and posting simulations to identify and resolve potential errors.

Increase memory parameters to allow the job to run in multiple parallel processes.

If errors exceed greater than two million, you won’t be able to download error message to a Microsoft Excel worksheet. In such cases, you’ll fix the errors and rerun the simulation jobs.

Initial Load Posting

You must post all documents in the initial load to avoid any manual journal entry adjustments. This will also help in reconciliation of balances, open items, and documents. Furthermore, a full posting of the initial load also helps in posting subsequent follow-on documents through SAP Application Interface Framework. For example, you’ll avoid Reference document isn’t posted errors.

SAP Application Interface Framework Bulk Load

Immediately after the initial load extraction is triggered in the source system, any new postings start being captured into source staging tables (table CFIN_ACC*). For example, there will be invoices, payments, and reset and reversals postings in the source system captured under the source staging tables. These documents will be transferred to the Central Finance system through SAP Landscape Transformation once SAP Landscape Transformation initial load/replication is triggered for SAP Landscape Transformation table CFIN_ACCHD.

When all captured data transfers to the Central Finance system and once SAP Landscape Transformation triggers the SAP Landscape Transformation initial load, it doesn’t load in the sequence into the Central Finance system. There could be chances of clearing documents transferring before the invoice or reset/reversal, which will lead to serialization errors such as Reference document isn’t posted or Reference open item is already cleared in SAP Application Interface Framework. Take care of SAP Application Interface Framework serialization before transferring the FI accounting documents through the SAP Landscape Transformation initial load. Consult SAP Note 2679070 on addressing serialization and steps to be followed.

Source Staging Table Cleanup

In the source system, Central Finance staging tables (table CFIN_AC*) filled up after the initial load extraction is triggered. Similar staging tables exist for controlling secondary postings (tables CFIN_CO_ADD and CFIN_COPA). As the table data grows, this may have performance problems. SAP delivered two reports to clean up the staging tables: RFIN_CFIN_CLEANUP for FI-CO staging tables and FIN_CFIN_CO_CLEANUP for CO staging tables.

Determine the appropriate strategy and timing to clean up these tables to avoid performance bottlenecks.

Reporting Requirements

Understanding the vision of reporting and the right level of data with appropriate granularity is replicated from the source systems, especially for consolidated central reporting.

Assess which reports needs to be carried out in the source system versus the Central Finance system.

Execute Central Finance comparison reports and other reconciliation reports regularly to ensure data replicated is accurate and consistent.

Enable SAP Fiori apps, CDS views, SAP Analytics Cloud, and other reporting tools to ensure they fit into your solution. Tools such as SAP Analytics Cloud or SAP Analysis for Microsoft Office requires additional licenses.

Ensure roles and authorization objects are aligned with stakeholders.

Group reporting and document and reporting compliance (DRC) teams are aligned on the solution.

Maintenance

You must have a maintenance plan for the target SAP S/4HANA Central Finance, source SAP ERP, SAP S/4HANA, and SAP Landscape Transformation Replication Server. This isn’t new as planned technical maintenance of the SAP system is common in any project. As part of planned maintenance, suspend the replication.

If the Central Finance system or SAP Landscape Transformation Replication Server technical maintenance is planned and SAP Landscape Transformation Replication Server is suspended, postings in the source system can keep accumulating in the source staging table along with the SAP Landscape Transformation Replication Server logging table. As we know, accumulated postings in the SAP Landscape Transformation Replication Server logging table could be invoice, clearing, or reset/reversal documents. SAP recommends following the best practices in SAP Note 2679070.

Conclusion

While a full-blown SAP S/4HANA migration provides a lot of financial functionality for businesses, they also take a lot of work to set up. Companies looking for the financial benefits of SAP S/4HANA while maintaining an existing ERP setup will find Central Finance a lucrative option.

As you’ve read above, there are multiple advantages to upgrading from SAP ERP to Central Finance—but ultimately the choice of where to go lies with you. Read up on all of your options and make the decision that is the best fit for your business!

Editor’s note: This post has been adapted from sections of the books Implementing Central Finance with SAP S/4HANA by Anand Seetharaju and Central Finance and SAP S/4HANA by Carsten Hilker, Javaid Awan, David Dixon, and Marc Six. Anand is a certified SAP S/4HANA financial and management accounting consultant. Carsten is a global solution owner for Central Finance. Javaid is the global solution owner for Central Finance and machine learning for finance and is a qualified accountant with 25 years hands-on experience in software applications. David is a partner at TruQua Enterprises and a featured speaker worldwide at SAPinsider conferences. Marc is a principal consultant and the SAP S/4HANA and Central Finance practice lead at TruQua Enterprises.

This post was originally published 2/2020 and updated 8/2025.