SAP Central Finance, formerly known as SAP Simple Finance, helps organizations harness a range of capabilities and core components to embark on their journey towards an agile and efficient SAP S/4HANA implementation with the help of SAP Central Finance.

This article will cover the core elements and capabilities of the SAP Central Finance landscape, functional integrations with other applications, and the main advantages of the solution, as well as where our team of experienced SAP consultants comes in to help.

What is Central Finance in SAP?

The SAP Central Finance solution is designed to provide companies with a centralized platform for their financial data, offering core integration capabilities to connect data from multiple ERP systems and applications in one place. Central Finance in SAP enables organizations to streamline financial operations, simplify reporting, and leverage the power of SAP HANA to replicate and share financial documents in real time across your enterprise.

Key Components of the Central Finance Landscape

The technical architecture of SAP Central Finance is based on the S/4HANA system, providing a comprehensive platform for transferring and combining data from multiple SAP and non-SAP ERP systems with disparate data structures. This enables organizations to take advantage of the key benefits of SAP S/4HANA without needing to fully transition to SAP S/4HANA.

With the consolidation of financial data, records, and reports across organizations, Central Finance users are enabled to bring documents from SAP Financial Accounting (FI) and postings from SAP Controlling (CO) together in a single source of truth known as the “Universal Journal” and reduce the need for data replication and reconciliation.

SAP Central Finance is comprised of two main components, including…

Source System

Source system refers to the locations from which financial data is extracted and replicated into the Central Finance system, including both SAP and non-SAP ERP systems.

The Central Finance solution acts as a centralized hub, helping organizations collect, transfer, and combine core data from all source systems, leverage real-time visibility into financial data, and streamline financial processes across the entire enterprise.

Central Finance System

The Central Finance system refers to the platform that leverages SAP S/4HANA architecture to replicate, cleanse, analyze, and consolidate financial data from multiple source systems into a single, unified view across all systems.

The connection between each source system and the Central Finance system is established through the SAP Landscape Transformation (SLT) Replication Server to facilitate the instantaneous replication of financial accounting transactions and provide better insights to help key stakeholders make more informed decisions.

Core Capabilities of Central Finance in SAP

  • Automation of accounting, reporting, and controlling functions across the ERP landscape
  • Integrations with Master Data Governance (MDG) mapping tables to map legacy data from source systems to the Central Finance system
  • Replication scenarios to improve Extract-Transform-Load (ETL) functions without full integration between Central Finance and the data warehouse
  • Multiple deployment options, including on-premise, in the cloud, or in a hybrid environment
  • Consolidation of financial data across multiple different ERP systems for improved data quality and standardized financial processes
  • Integrations with other SAP solutions (i.e., S/4HANA, SAP Financials, and SAP Analytics Cloud) for optimized finance processes

Main Advantages of SAP Central Finance

Let’s take a closer look at a few key advantages of SAP Central Finance for your organization…

1) Data Visibility

SAP Central Finance provides enhanced data quality and visibility by enabling real-time replication of financial accounting transactions from SAP and non-SAP ERP systems.

The unified data model is created by mapping various accounts, profit centers, or cost centers from source systems to a single set of master data in the central system to establish a consistent reporting structure and manage the initial data load and day-to-day transactional data in SAP.

2) Reduced Costs

By leveraging SAP Central Finance to integrate, standardize, and automate processes, companies of all sizes and industries can improve cycle times, re-deploy labor to activities that bring higher value-add across systems, and reduce overall costs.

SAP Central Finance offers advanced system conversions, planning capabilities, and a single source of truth for financial transactions to save time and money across the entire company.

3) Quicker Decision Making

The SAP Central Finance solution enables faster decision-making processes by replicating financial accounting transactions from SAP or non-SAP ERP systems in real-time and providing a central location for financial data and reporting.

With improved data management and reporting capabilities, companies can leverage increased transparency and improved access to real-time data to make smarter, more informed decisions across teams.

Utilizing SAP Central Finance capabilities can also expedite the implementation of real-time reporting and analytics to further enhance and improve decision making processes.

Who Benefits from SAP Central Finance?

While SAP Central Finance can benefit organizations of all sizes and industries, it can be a particular advantageous solution for larger companies with an international presence or those with a complex IT and SAP system landscape, including SAP and non-SAP systems.

Regardless of the size, location, or complexity of an organization’s structure, the Central Finance system can enable them to improve data visibility, enhance financial control, and drive better decisions across the entire enterprise.

Here are a few examples of core functionality available for users in any organization…

For Business

  • Gain a competitive advantage with financial and digital transformation initiatives
  • Implement intuitive and agile solutions with limited disruption to day-to-day processes
  • Reduce time-to-value for complicated financial data management and modeling functions
  • Optimize resource allocation to save valuable time and money across departments
  • Improve efficiency for finance functions on the SAP HANA platform

For IT

  • Combine data from SAP and non-SAP systems in a centralized source of truth
  • Implement new systems and capabilities based on organizational needs without disrupting the function of the existing system landscape
  • Leverage real-time data visibility and insights to improve decision-making processes
  • Stay up-to-date with business growth and evolving circumstances with better business agility, flexibility, and speed

For Finance

  • Leverage a single source of truth for financial data to improve analysis, reporting, and forecasting functions across the enterprise
  • Eliminate the need for complicated, inefficient data reconciliation processes
  • Navigate SAP system landscapes to improve strategic insights and enable a soft close

Key Integrations with Other Systems

By integrating non-SAP ERP systems, SAP customers can connect their source ERP systems to the SAP Central Finance system, streamline financial processes, gain better insight into their data, and reap the rewards of a unified financial landscape.

Master Data Governance

Integrations with Master Data Governance (MDG) allows organizations to map financial accounting and cost objects from source ERP systems, create a single view of the data, and make it easier to analyze and reconcile financial transactions.

Replication Scenarios

Replication scenarios simplify the transfer of financial postings and cost objects to the Central Finance system, ensuring all financial processes and transactions are up to date and in sync. With each new release, the scope of integrations and replication scenarios expands, allowing SAP customers to benefit from the latest features and capabilities of the solution.

How Can We Help?

Our team of senior-level SAP consultants at Surety Systems has the technical skills and functional expertise needed to help your organization navigate the challenges of a digital transformation, automate financial processes, and achieve greater efficiency across their enterprise.

Partnering with the Best

Interested in learning more about our SAP consulting services? Ready to get started on an SAP Central finance project to optimize finance processes, improve efficiency, and make the most of your SAP investments over time?

Contact us today to get connected with one of our expert SAP consultants!