A Holistic Approach to Implementing Central Finance

Learn tips to help you prepare for a Central Finance implementation project. Central Finance is aimed at reducing the cost of adoption of SAP S/4HANA Finance for organizations having heterogeneous landscapes (multiple SAP ERP or non-SAP systems). With Central Finance, these organizations no longer have to upgrade all the systems to have SAP S/4HANA Finance. Instead, they can implement SAP S/4HANA Finance with one instance only.

Learning Objectives

Reading this article, you’ll learn:

  • The different components that are involved in a Central Finance implementation
  • The systems that are required for an implementation, including the System Landscape Transformation Replication Server (SLT), a source system (SAP or non-SAP systems), and a target system such as SAP S/4HANA Finance or Master Data Governance (MDG)
  • How the various qualifying master data is converted to achieve data harmonization and which financial transactions from the source system can be reposted to the Central Finance system
  • How financial transactions are replicated into the target Central Finance system, the post-processing options, and the relevant audit trail
  • The business value proposition of implementing Central Financ

Key Concept

Master data conversion/harmonization, transaction data replication, and reporting are some of the key concepts of a Central Finance implementation.

The following tips will help you to prepare well in advance for a Central Finance implementation in terms of system requirements, resource planning, delta configuration, and the knowledge about key processes that are supported by SAP and the ones that are not supported as of S/4HANA Finance 1605. Central Finance is a deployment option and not a functionality within SAP S/4HANA. SAP introduced it to simplify the process of adopting SAP S/4HANA Finance.

The Central Finance Option

SAP S/4HANA Finance is an exchange innovation in the sense that installation of the SAP S/4HANA Finance Add-On replaces the classic SAP Financial Accounting and Controlling (FI-CO) modules with re-engineered SAP Accounting Powered by HANA, leaving all other modules as is. To install the SAP S/4HANA Finance Add-On, the SAP system needs to be on SAP ERP Central Component (ECC) 6.0, with enhancement package 7 or above. The database must be an SAP HANA database.

For organizations that have a heterogeneous landscape (more than one SAP ERP instance or non-SAP instances) that want to adopt SAP S/4HANA Finance, it is a mammoth task to:

  • Migrate all the instances to the SAP HANA database
  • Upgrade all the instances to SAP ERP Central Component (ECC) 6.0 and enhancement package 7
  • Install the SAP S/4HANA Finance Add-On on all the instances

This increases the complexity, effort, and the cost for adoption of SAP S/4HANA Finance. To keep it non-disruptive for such customers, SAP came up with an innovation deployment option called Central Finance.

Instead of upgrading all the instances, you can add a new instance having the SAP S/4HANA Finance Add-On installed on it. You then can connect all the existing instances to the new SAP S/4HANA Finance system. And guess what? The existing instances remain untouched, which means the process is non-disruptive to the business. You only have to apply a few SAP Notes in the source system.

All the finance transactions posted in the source systems are automatically transferred to the new SAP S/4HANA Finance system. That becomes the system of record for Financials that can then be used for central process execution. For example, the period-end close can be performed on the new central instance, instead of performing it in multiple instances.

Implementation Aspects to Be Considered While Doing a Central Finance Project

In this article we intend to enlighten you about the various aspects of doing a Central Finance implementation, including systems, data, and the process.


Let’s understand which systems are involved, their relevance for Central Finance, and how they can be deployed. Table 1 summarizes the systems required.


Ajay Maheshwari

Ajay Maheshwari is an SAP Finance and Controlling (FI/CO) and SAP S4/HANA solution architect with more than 13 years of experience. He is well known for his contributions to the SAP Community Network (SCN) Forum.

He is among the all-time top 20 contributors to the SCN Forum, across all SAP modules and one of the top contributors in his own space, SAP FI/CO.

He is one of the official SAP mentors and has been recognized as the topic leader in the SCN Forum each year since 2011.

He has experience with SAP implementations and rollouts in several industries and thoroughly enjoys designing complex business processes and delivering SAP training in the areas of FI/CO and SAP S/4HANA.

Currently, he works as associate director at itelligence, an SAP Platinum Partner.

Kavita Agarwal

Kavita Agarwal is an SAP FI/CO and SAP S/4HANA solution architect with more than 16 years of experience. She is well known for her contributions to the SAP Community Network (SCN) Forum and is a platinum level contributor there.

She has experience with medium- to large-sized SAP implementations and rollouts in several industries and geographies and has been part of major finance transformation programs in the chocolates and confectionary industry. She enjoys designing complex business processes and delivering SAP training in the areas of SAP FI and SAP S/4HANA.

Currently, she works as an independent consultant helping customers optimize their SAP systems to derive maximum benefits out of their SAP investments and also offers e-learning solutions in SAP FI/CO.

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