Central Finance

With Central Finance, customers can connect their distributed system landscape, to a centralized SAP S/4HANA
Finance system. This can be made up of a combination of SAP systems of different releases and non-SAP
systems. Financial Accounting (FI) and Management Accounting (CO) postings can be replicated into this Central
Finance system.
Central Finance allows you to create a common reporting structure. To prepare for this common structure, you
must map your different accounting entities (for example, account, profit center, or cost center) in your source
systems to one common set of master data in the Central Finance system. You can then replicate financial
accounting (FI) and management accounting (CO) postings.
Financial accounting (FI) and management accounting (CO) postings are replicated to the Central Finance
system. There, FI documents and CO postings are combined into one document – the universal journal entry. In
addition, all cost elements are part of the chart of accounts. Before you replicate CO postings to the Central
Finance system, you need to make sure that accounts are available for all cost elements.

Note
If you use the new general ledger (GL) in the local system, you are not updating postings under the accounts for
real-time integration but instead you are updating postings under the secondary cost elements/accounts used to
record the postings in CO.

You can also replicate cost objects (for example, production orders) to the Central Finance system. These
represent the business transactions in logistics (for example, production, maintenance, and quality) and may not
be at an appropriate granularity in the Central Finance system. For this reason, you can choose to transfer some
cost objects, such as long-living internal orders, directly to orders in the Central Finance system and to map other
cost objects, such as short-living production orders, to more long-living cost objects, such as a production cost
collector in the central system.

Recommendation
To avoid reporting taxes twice, SAP recommend that tax reporting should only be done from your source systems
rather than the Central Finance system.

Integration
The figure below shows how the systems integrate with each other and is followed by an explanation:
 Central Finance System Landscape

SAP S/4HANA Finance can be used in conjunction with SAP Landscape Transformation Replication Server (SAP
LT Replication Server) and SAP Master Data Governance (SAP MDG). If you integrate SAP MDG with your SAP
S/4HANA Finance system, you can use SAP MDG to harmonize the master data from the source system to the
Central Finance system.
The SAP LT Replication Server collects data written to databases in the source systems and feeds this data into
the corresponding Central Finance accounting interface. If you are mapping master data, SAP suggests you use
SAP MDG. If you are mapping short-living cost objects, you should use SAP MDG in conjunction with the cost
object mapping framework.
After the data is mapped, the system uses error handling to log the details of any errors encountered. You can
choose to make corrections and repost the item or process the item again after, for example, you correct the
mapping rule or adjust incorrect values in the document.
The internal accounting interface posts the Financial Accounting (FI)/Management Accounting (CO) document to
SAP HANA as a universal journal entry.

Prerequisites
 SAP ERP Releases
Central Finance can be used out-of-the box with all SAP ERP releases that are still in maintenance starting
from SAP ERP 6.0. Instructions on how to implement Central Finance with these systems are available either
 as SAP Notes or are contained in the support packages for these systems. For releases SAP R/3 4.6C to
SAP ERP 5, contact SAP Product Management by creating an incident on the component FI-CF.
 Source Systems with a 3rd-Party Database with a Runtime License
If you want to replicate your data from a system that uses a 3rd-party database with a runtime license, SAP
strongly recommends that you use the Central Finance – Business Integration Scenario. For more
information, see SAP Note 2223621 .
 Replication from non-SAP ERP Systems using SAP System Landscape Transformation Server (SLT)
SAP System Landscape Transformation Server (SLT) can be used to replicate data from most databases of
non-SAP ERP systems. The field and structure mapping that is necessary to enable Central Finance
interfaces to be filled can be carried out directly in SLT.
 Licensing - Required Software
You must have a license for the following:
o Central Finance
Contact your SAP Account Executive to verify if you need to purchase this license.
o SAP Landscape Transformation Replication Server
The add-on DMIS 2011_1_700 (or higher depending on the release of the system) is installed in all
involved systems. This requires the purchase of the SAP LT Replication Server license.

Note
The minimum support package (SP) level for the steps described in this document is SP08.
 Optional Software
o External Tax Calculation Engine
If you are using an external tax calculation engine in your source system, you should connect the same
external tax calculate engine to your Central Finance system. This is because after tax calculation, tax
checks are carried out in both systems.
o SAP BusinessObjects Analysis, edition for Microsoft Office
In addition to classic SAP ERP reports such as financial statements, cash flow, or profitability reports, you
can use SAP BusinessObjects Analysis, edition for Microsoft Office for reporting. SAP BusinessObjects
Analysis, edition for Microsoft Office integrates with Microsoft Excel and helps you to gain insight into
business data and make intelligent decisions that impact corporate performance.
Contact your SAP Account Executive to verify if you need to purchase a license.
 Business Functions
o You have activated the Central Finance (FINS_CFIN) business function.
 You have made the required settings for Central Finance in Customizing under Financial Accounting (New).
 You have installed SAP LT Replication Server. Contact your SAP Account Executive to verify if you need to
purchase a license.
SAP LT Replication Server is a database-oriented tool that can be installed as a separate system, or on top
of any of the source systems or the Central Finance system. For more information, see the guides for the
SAP LT Replication Server on the SAP HELP Portal at http://help.sap.com SAP In-Memory
Computing SAP HANA SAP HANA Options SAP HANA Real-Time Replication .
 SAP Notes
You have installed the relevant SAP notes in your source and Central Finance systems. For a complete list of
SAP notes that are relevant for Central Finance, see the Administrator’s Guide for Central Finance in the SAP
Help Portal.
 Authorizations
o The authorization SAP_IUUC_REPL_REMOTE has been assigned to the RFC user in the source system.
o The following authorizations have been assigned to the configuration user in the SAP LT Replication
Server system:
o SAP_IUUC_REPL_ADMIN
o SAP_MWB_PROJECT_MANAGER
 Features

Central Accounting Interface

You can use the central accounting interface to harmonize master data and replicate postings.
You can map master data from several source systems to harmonized master data in the Central Finance system
either manually or using SAP MDG.
In order to enable the transfer of data between your source systems and Central Finance, you must maintain
mapping, which defines the relationships between data in the source systems and data in Central Finance. The
system uses this mapping during the initial load of data from your source systems and when transferring
transactional data to Central Finance, that is, when new postings are made in the source system.
Different types of master data are mapped in different ways:
 Master data such as company codes and company IDs, must be either mapped manually as part of your
Customizing or using SAP MDG. For more information, see Mapping in Central Finance.
 Master data relating to cost objects, such as production orders and internal orders, is mapped using the cost
object mapping framework. For more information, see Cost Object Mapping.
Using SAP LT Replication Server, you can replicate FI and CO postings from several source systems to the
Central Finance system. SAP LT Replication Server collects the posting data from the source systems and feeds
it into the corresponding interface in Central Finance.
For more information on the interfaces for Central Finance, see Harmonized Financial Reporting.

Note
In addition, when a document line item is posted with a profitability segment in the source system, the attributes
of the profitability segment are transferred to the Central Finance system. You can also map the attributes of the
profitability segment.
The Central Finance system creates a new profitability segment number and stores the profitability segment in
the account-based profitability analysis (CO-PA) component and the universal journal entry.

Intercompany Reconciliation with Central Finance

As receivables and payables are replicated into Central Finance, intercompany reconciliation (ICR) can access
these receivables and payables directly in the Central Finance system without having to run long batch jobs for
loading the receivables and payables into Central Finance.

Document Relationship Browser

Using the document relationship browser, you can see the document flow of an FI document. For example, you
can navigate back from an FI document to the original sales order.
You can also search for the reposted FI document using the company code, original document number, or fiscal
year from the source system.

Note
All business documents related to a transaction are available in the document relationship browser, provided the
source system is an SAP system.

Using the Document Relationship Browser

To navigate to the document relationship browser, you can use the following transactions:
 Controlling Documents: Actual (KSB5), then choose Environment Relationship Browser
 Display Document (FB03), then choose Environment Document Environment Relationship Browser

Harmonized Financial Reporting

 Central Finance reporting provides harmonized financial reporting allowing you to report on financial figures that
originate in different source systems.
For more information, see Harmonized Financial Reporting.

SAP BusinessObjects Analysis, edition for Microsoft Office

In addition to classic SAP ERP reports such as financial statements, cash flow, or profitability reports, you can
use SAP BusinessObjects Analysis, edition for Microsoft Office for reporting. SAP BusinessObjects Analysis
(edition for Microsoft Office) integrates with Microsoft Excel and helps you to gain insight into business data and
make intelligent decisions that impact corporate performance.
For more information about SAP BusinessObjects Analysis, see SAP HELP Portal
at http://help.sap.com Analytics Business Intelligence Analysis .

Note
Contact your SAP Account Executive to verify if you need to purchase a license.

Initial Load and Online Replication of Data

The initial load is used to transfer postings from a particular period, for example the current fiscal year, from your
source systems to your Central Finance system. After the initial load of data has taken place, new postings are
transferred to the Central Finance system via online replication.

Note
Even if you do not want to transfer postings from a previous period, (for example, if you are carrying out a proof-
of-concept), you must still execute an “empty” initial load in order to activate online replication in the source
system.

The following types of postings are not transferred as part of the initial load and online replication:
 Postings to CO-FI reconciliation ledger (GL Reconciliation Postings)

Note
For the initial load only you should note that, if you have enabled replication of CO postings, postings to CO-
FI reconciliation ledger (GL reconciliation postings) will be transferred via CO.
 Year-end closing postings where the reference transaction (AWTYP) is GLYEC.
 Clearings
 Clearing resets
 Recurring entries
 Sample documents
 Noted items
 Parked documents
 Balance carryforward items
 Closing operations (These comprise processes and functions performed at the end of the fiscal year in
certain countries.)
For more information, see Initial Load: Execution and Monitoring.

Harmonized Financial Reporting

Central Finance provides harmonized financial reporting allowing you to report on financial figures that originate
in different source systems. Interfaces are used to feed data from the source systems into the Central Finance
system.
 The source systems often have different Customizing settings and un-harmonized master data but before
reposting the data to the Central Finance system, master data mapping takes place to harmonize the master
data. As a consequence, harmonized financial reporting can be achieved across the entire group.
For more information on master data mapping, see Mapping in Central Finance.

Features

Reposting from Source Systems to the Central Finance System

The figure below shows the interfaces that feed data from the source systems into the Central Finance system
and is followed by an explanation:

The interfaces that feed data from the source systems into the Central Finance system include the following:
 An interface for reposting Financial Accounting/Management Accounting (FI/CO) postings
When you post financial documents in the source system, this interface is used to repost these FI documents
as new FI documents in the Central Finance system. If these posting are also relevant for CO (for example,
expenses on cost elements), the CO postings are also updated in the Central Finance system.
 An interface for reposting secondary CO postings
This interface is used to repost CO postings that are not always entered in FI in the source systems, for
example, postings on secondary cost elements.
 An interface for cost object mapping
This interface is used to map certain cost objects such as production orders, internal orders, and quality
management orders to corresponding cost objects in the Central Finance system.
 Flexible Reporting Based on Line Items
Posted documents are stored using the universal journal entry for Central Finance allowing for flexible reporting
based on line items rather than on preaggregated totals.

Central Cost Object Reporting

In Central Finance, cost object mapping is used to map similar cost objects to a central cost object, for example,
individual productions orders of the same type are mapped to a product cost collector. As a result, you can report
on costs directly on the central cost object.
CO postings for both primary costs and secondary costs are replicated to the Central Finance system allowing
you to allocate costs between cost objects that originate in different source systems. Therefore, you can report on
overhead costs across the entire group and you no longer need to pull individual reports for each source system.
For more information on cost object mapping, see Cost Object Mapping

Cost Object Mapping

When moving to Central Finance, you must consider what data needs to be harmonized in the Central Finance
system and how best to approach how you want to harmonize the data. The best approach to take depends on
the type of data, for example:
 Long-living master data, which is stable and only needs to be harmonized once
 Short-living master data (or short-living cost objects), which is generated frequently and similar to
transactional data
Cost object mapping allows you to map your short-living cost objects such as production orders or internal
orders, using the cost object mapping framework.
With the cost object mapping framework, cost objects in the source system can be mapped to a cost object in
Central Finance system and you can customize how you want the cost objects to be mapped. The mapping
information between the cost objects in the source system and the Central Finance system is stored in the
Central Finance system.

Integration
SAP S/4HANA Finance can be used in conjunction with SAP Landscape Transformation Replication Server (SAP
LT Replication Server) and SAP Master Data Governance (SAP MDG). If you integrate SAP MDG with the SAP
S/4HANA Finance system, then you can use SAP MDG to harmonize the master data from the source system to
the Central Finance system.
The figure below shows how the systems integrate with each other and is followed by an explanation:
To replicate cost objects, such as production orders and financial documents, from source systems (either SAP
source systems or non-SAP source systems) to Central Finance, you must use the SAP LT Replication Server.
The SAP LT Replication Server collects data written to databases in the source systems and feeds this data into
the corresponding Central Finance accounting interface. If you are mapping master data, SAP suggests you use
SAP MDG. If you are mapping short-living cost objects, you should use SAP MDG in conjunction with the cost
object mapping framework.
After the data is mapped, the system uses SAP Application Interface Framework (SAP AIF) to log the details of
any errors encountered. You can choose to make corrections and repost the item or process the item again after,
for example, you correct the mapping rule or adjust incorrect values in the document.
The internal accounting interface posts the Financial Accounting (FI)/Management Accounting (CO) document to
SAP HANA as a universal journal entry.

Features
Production orders, internal orders, service orders, for example, can be short-living cost objects often existing for
less than a day in the system. For these cost objects, you can use the cost object mapping framework to map the
objects from the source systems to the Central Finance system.
With the cost object mapping framework, cost objects in the source system can be mapped to a cost object in the
Central Finance system and you can customize how you want the cost objects to be mapped. The mapping
information between the cost objects in the source system and the Central Finance system is stored in the
Central Finance system.
 The following Customizing activities are available for Cost Object Mapping:
 Define Scenarios for Cost Object Mapping
In this Customizing activity, you can define, activate, and delete scenarios for cost object mapping.
Defining scenarios for cost object mapping builds mapping between:
o The local production order and central product cost collector
o The local production cost collector and central product cost collector
o The local internal order and central internal order
o The local maintenance order (service order) and central maintenance order
o The local quality management order and central quality management order
 This makes it possible for the FI/CO documents from the CO local objects to be posted to the replicated
Central Finance system CO objects. Once a CO local object (for example, an internal order or product cost
collector) has been created in the source system, it is replicated in the Central Finance system by using the
relevant scenario and its mapping rules.
 Define Mapping Rules for Cost Object Mapping Scenarios
In this Customizing activity, you can define the mapping relationship between source cost objects and central
cost objects for Central Finance. First, you must have created a scenario to determine how a source cost
object category is assigned to a central cost object category in the Customizing activity Define Scenarios for
Cost Object Mapping.
 Correct Cost Object Mapping
In this Customizing activity, you can correct the assignment between source and target cost objects. This
may be necessary due to a change in the corresponding mapping rules. After this change has been made,
the cost objects that have already been replicated must be remapped according to the new mapping rules. In
addition, the related cost object mappings must be updated according to the new mapping rules.
 Delete Cost Object Mapping and Cost Objects
Sometimes, during order master data replication, you need to clean up the existing assignments and created
cost objects. In this Customizing activity, you can clean up and delete assignments and cost objects. This
activity only deletes the cost objects; it does not delete the master data and transactional data that refer to the
cost objects. Assignments are deleted synchronously, and cost objects are deleted asynchronously. Once an
assignment or cost object is deleted, you cannot undo the deletion.
After you have harmonized your master data, you can replicate primary financial accounting (FI) and
management accounting (CO) postings including secondary CO postings in real time. While doing FI/CO
document replication, the cost object in the source document is automatically replaced by a corresponding cost
object in the Central Finance system. If necessary, the system creates a new cost object in the Central Finance
system.
For primary cost postings (so for cost-relevant business transactions), the FI documents and CO documents are
automatically generated together. For secondary cost postings (so for CO internal processes such as distribution
and allocation), the CO document is replicated separately. Both the FI document and the CO document result in
universal journal entries.
Replicating changes to cost objects from the source systems to the Central Finance system is possible for those
with 1:1 cardinality in the scenario definition. The attributes marked as Derive from Local and CO relevant can be
replicated automatically in the Central Finance system, and the replication of common critical statuses is
supported.

Example
Production orders of the same order type behave as cost objects in the source system. However, in the Central
Finance system each individual production order is not treated as a cost object. Instead, using the cost object
mapping framework you can map similar production orders to a central cost object, known as a product cost
collector.
Later when you are posting your costs, the Central Finance system uses this product cost collector to collect
costs from the production orders. The product cost collector captures both FI documents for raw material usage
and the delivery of the finished goods and CO documents for activity confirmations, overhead calculations, and
settlement