4/14/2021 SAP e-book

Unit 1: Overview of Central Finance in SAP S/4HANA

● A re-engineered closing process, including central finance, provides the flexibility to

run financial activities, see the Intercompany Reconciliation value scenario, and "pre-
close" (batch-input free).
● A single repository of all financial transactions, across multiple applications, allows
central finance to perform mapping and harmonization at the point of transaction - on
a granular level and pre-consolidation.

Cash Flow Management:

● Replication of all bank-related open items (statements, and so on) into Central
Finance provides global bank balances and cash position reports.
● Real-time replication of all A/P and A/R open items into Central Finance provides
liquidity forecast reports, based on SAP ERP and non-SAP systems, across all
sectors.

Group Financial Processes and System Standardization:

● Setting up Central Finance with harmonized structures (cost center hierarchy, chart
of accounts, vendors, customers, etc.) represents the prerequisite to get a common
view on data.
● Central Finance offers the ability to drill down information to the source system,
providing an overview of financial document relations across SAP modules, and full
traceability of postings.
● Pre-consolidation processes can be performed in the central finance system, so as to
accelerate consolidation and reduce the time required to close books.

Profitability Analysis:
● Redesigned and improved, accounting-based COPA is available on SAP S/4HANA and
central finance.
● The universal journal entry of central finance is a single dataset, across multiple
applications. Reconciliation is ensured at the point of posting a financial accounting
related document.
As a result, the time and effort required for reconciliation is reduced (to zero). Data is
available for reporting instantly, as there is no reconciliation between COPA and FI.
● Reporting can be based on the most granular transaction data, including all possible
dimensions - providing additional options to analyze profitability.

Budgeting and Planning:

● BPC on SAP S/4HANA enables corporations to perform planning on group level,
based on common structures across the group. Planning data would be available in
real time.
● The following planning levels are available: cost center, project internal order, profit
and loss, balance sheet, and liquidity.

Intercompany Reconciliation:

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