SAP S/4HANA and Central Finance Open the Door to New Business Models

Author: Chris York

Our economy and business competition are growing more global every day. This results in your company competing against more businesses. Global cultures and experience lead to greater innovation than you might be accustomed to. If your company is not innovating and expanding into new markets via acquisitions or organic growth, you will see a loss in market share. Many companies are aggressively expanding business models to capture revenue and market share and hedge against a market downturn in any specific sector. In this blog, I hope to show how SAP S/4HANA and Central Finance can be your platform for growth and diversification.

What is Central Finance?

In previous posts, I have described Central Finance in detail, but will provide a short refresher here. Central Finance coupled with SAP Landscape Transformation (SLT) server provides a solution to continue operating your existing legacy ERP system while operating S/4HANA completely separately. SLT connects to your source ERP system and transforms and replicates accounting documents to S/4HANA. Central Finance in 1909 includes Central Payments, which allows all payables to be replicated to S/4HANA enabling – a shared services model for Accounts Payable. A few features of Central Finance are:

Platform for Growth

  • Complete clearing of one invoice with one payment
  • Clearing one invoice by down payment
  • Partial clearing of one invoice by partial payment
  • Clearing several invoices by payment
  • Replicating and updating clearing information for residual items
  • Clearing by credit memo
  • Clearing of several invoices by one payment
  • Update of withholding tax from original invoice
  • Reverse payment and reset clearing

Many clients have been using their current ERP systems for 10 or more years. These systems are typically customized to match the business model that was in place 10 or 15 years ago. That means adapting to include new business models is difficult or impossible. S/4HANA is constructed from the ground up as a microservices architecture. This is a modern, web app-based solution allowing flexibility in deployment and customizing business processes. SAP’s S/4HANA user experience is called Fiori. Fiori is thousands of modern web apps that are continually optimized and enhanced for real-time analytics and operations. This platform provides the basis for realizing whatever vision you have for your business.

Transforming Your Business

In the past, upgrading your ERP was all about ensuring current business processes and enhancements continued to function post-upgrade. In the SAP world, this was a “technical” upgrade. The advent of S/4HANA and Central Finance frees you from the anchor of a highly customized and rigid ERP system. You now have the ability to implement S/4HANA with a flexible operating model, allowing you to capture new markets and business sectors. This platform also allows you to envision different internal process optimization that was not available in your previous system. Another feature of this platform is the capability to migrate your business processes to S/4HANA at the speed that makes sense for your business. If you need to reduce your capital expenditure each year, that is possible. If you prefer to migrate finance operations before sales and logistics, that is no problem.

Your Vision Realized

A previous client of mine was in exactly the situation outlined previously. They had been on SAP ECC for nearly 20 years and had hundreds of customizations, which limited their ability to grow. By leveraging S/4HANA and Central Finance, they created an entirely new contract model that allowed them to sell products, extended warranties, and evergreen service contracts via mobile phones, tablets, and online. This model allowed all operating companies to share customers, providing visibility to all pipeline activities across each line of business. They had a 360-degree view of their customers. They also captured +2% of revenue leakage on contract renewals. This alone paid for the project.

What is your vision? If you can imagine where you want your company to go, Ameri100 has the business acumen and S/4HANA expertise to make it happen. For more information on Central Finance, fill out the information below, and we will share our White Paper “Ameri100 Central Finance Roadmap.” Check back soon for more posts on Central Finance.



Interested in learning more? Contact us or reach out the the author directly!