SAP S/4 HANA Simple Finance: Central Finance Deployment

Sanjay Kumar
12/30/2016
SAP S/4 Simple Finance Implementation Strategy: Central Finance Deployment Option

Many global organizations have multiple SAP ERP systems, non-SAP ERP systems and in
addition an over-customized ERP systems. The big-bang project approach to implement SAP S/4
HANA Simple Finance would be too long which would fall lean to support ROI. The deployment
option of consolidating all ERP systems into a single ERP system then upgrade to the S/4HANA
may also not be an attractive alternative either. Strategically, the benefit of implementations must
be supported by a business case of cost of multi-legacy ERP System against the benefit of the
single source of truth. Hence, Central Finance becomes a “NON-disruptive” implementation
option, which allows customers to migrate and consolidate systems over the time. Central
Finance’s capability facilitates the transition to SAP S/4HANA Finance without disruption to
current system landscape, which can be made up of a combination of SAP systems along with
different accounting principles and non-SAP systems. More importantly, Central Finance
migration facilitates a common reporting structure with the immediate benefit of flexible and
consolidated financial and management reporting.

Central Finance Deployment:

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 Central Finance Architecture and some important consideration for migrations:

The figure below shows the how system integrates with each other

SAP Simple Finance and Central Finance can be used in conjunction with SAP Landscape
Transformation Replication Server (SAP LT Replication Server) and SAP Master Data
Governance (SAP MDG).
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.
Central finance accounting interface is used to harmonize master data and replicate postings
The master data from multiple source system can be mapped to harmonized master data either
manually or through SAP MDG Tool. In order to enable the transfer of data between the source
systems and Central Finance the mapping needs to be defined for the following categories:
 Mapping for business object identifiers (COA, Cost Center ,Customer/Vendor No, Material No.)
which is done using MDG key mapping function
 Mapping for codes (Company code, Business area, or Country code).This is done using MDG
value mapping functions.
 Master data relating to cost objects (Production orders, Internal orders, Maintenance Order) which
are short lived by characteristics are mapped using the cost object mapping framework. The system
offers the scenarios template as given below:
 SAP001: Production Order to Product Cost Collector where short-lived PO is mapped to
Product Cost Collector( N:1)
 SAP002: Product Cost Collector to Product Cost Collector, mapping of Product Cost
Collector to Product Cost Collector( 1:1)
 SAP003: Internal Order to Internal Order: 1:1 relationship between the local and central
system.
 SAP004: Maintenance Order to Maintenance Order( N:1)
 SAP005: Quality Management Order to Quality Management Order(N:1)

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Handling open items and clearing:
The clearing functionality is activated by implementing the SAP note 2292043 and then perform
transaction FINS_MIG_CJ3.Hence open items are no longer technically cleared instead this is
reflected as the clearing status of the item in the source system; which was the limitation before
SAP S/4 Simple Finance 1605 and 1511, FPS02.
Open items migration considerations:
 Define the migration clearing account and the substitution accounts to be used for postings
during the initial load so that all balances related to reconciliation accounts are transferred
to assigned substitution accounts.
 In a second step, open items are posted to the reconciliation accounts, while the offsetting
entries are posted to the substitution account. Once the initial load is complete, the balances
of the substitution accounts would be automatically be zero.

Cross-Company Posting:
Most importantly, if the document splitting is active in the target System, must ensure that all the
company codes are activated for transfer otherwise this would create the error because document
splitting would not derive the splitting information for the company code which are not active. The
load file must contain all company code data which are subject to cross-company postings
otherwise document splitting would not be able to access the data of another company codes, To
overcome this possible error, document splitting can be deactivated from initial load of the postings
by applying BAdi to no split.

Error Handling:
The errors relating to the initial load of Finance postings, CO primary and CO secondary posting
documents can be handled in the Central Finance system using the SAP Application Interface
Framework (SAP AIF).Before Simple Finance on premise edition 1503, SPS 1508 edition, errors
could only be monitored in the application log of the SAP LT Replication Server.

Initial Load: Overview

Trail Data Migration strategy is one of the most important aspects of the Central Finance
deployment. The highly recommended steps are given below:
1-Create the test Source System and Central finance Test system and perform the on line
replication load from copy of the production system to central finance test system
2-Test the online replication from the productive source system so that live data is replicated to
the Central Finance system. Run the tests run for complete financial period so that all the typical
kinds of postings are part of the test
3- Switch on the online replication from the source system and migrate the data from production
source system to target production central finance system
While preparing the initial load in the source system, the following actions should be completed:
 Run and complete all scheduled job, no new jobs to be created
 Perform closing activities for fixed assets and execute the periodic depreciation
 Lock the posting periods in FI&CO including Plan.
 Consistency check for document against indexes and transaction figures
 Check reconciliation of GL with sub ledgers including MM with GL
 Balances carry forward for all ledger including currencies

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 Initial load of the cost objects should be made before FI Postings and management cost
postings because the accounting postings of P&L are made to cost objects.
 Carry out a simulation for the initial load of cost objects via SLT which enables to identify
any inconsistencies and corrections to be made before triggering the actual initial load.
 Ignore the Clearing Account and FI-CO Recon ledger postings, recurring postings, sample
document posted, Parked Document and balance carry forward posting of the source
system these do not need to be migrated.
 This is also important point to note that the executing the simulation and the posting of the
FI initial load can be done for all company codes or for selected company codes by creating
Initial Group under customizing
 Upon completion of the Initial load, the posting to central finance systems must be
compared with sender system. Following action items should be completed:
 The financial statements (report RFBILA00)
 General ledger line items (report RFSOPO00)
 The totals report for cost centers (transaction S_ALR_87013611)
 The G/L account balances (report RFSSLD00)
 The compact document journal (report RFBELJ00)
 Matching Report (RFINS_CFIN_MATCH_FI_TO_CO) of expected Postings in CO
and actual Postings, Reconcile the difference between actual postings and expected
postings if the controlling document from the source system could not be matched to
the corresponding financials document and make the manul postings in Co for the
difference.
 Data validation in Sender System can be done via dynamic selections for originating
documents from the source system:
 Log. System Source
 Company Code in Sender System
 Document No. in Sender System
 Fiscal Year in Sender System