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Introduction To Central Payment

Central payment in Central Finance allows businesses to make payments centrally for muktiple ERP systems and hence centralizing the payment operations

Central Payment can be activated by company code. For company codes that are activated for central payment, the invoices posted in the source systems are technically cleared in ECC (BSEG-AUGBL = ALE-Extern). The invoices are replicated to the Central Finance system and are paid in Central Finance system.

For company codes that are not activated for central payment, the invoices posted in source systems stay open and are paid in the source systems. The invoices and payment or clearing documents are replicated to the Central Finance system for reporting purpose (read clearing transfer functionality). The replicated invoices are ruled out from the payment or clearing transactions in the Central Finance system. This avoids duplicate payments (as payments are to be processed in the source systems).

Process view with Central Payment – AP

  1. The open invoice transferred from the source systems to the CFIN system via the SLT (Real-Time Replication).
  2. The open invoice in the source system is marked as ‘Technically Cleared’ and the invoice remains open in the CFIN system.
  3. When the outgoing payment is made, the open invoice in CFIN system is cleared.
  4. The bank statement clears the outgoing payment document and the transaction is closed.
  5. No information goes back to ECC system

Process view with Central Payment – AR

  1. The open invoice transferred from the source systems to the CFIN system via the SLT (Real-Time Replication).
  2. The open invoice in the source system is marked as ‘Technically Cleared’ and the invoice remains open in the CFIN system.
  3. When the incoming payment is made, the open invoice in CFIN system is cleared.
  4. The bank statement clears the incoming payment document and the transaction is closed.
  5. No information goes back to ECC system

Reversal of Documents

After Central Payment has been activated, all documents that were posted in the source system before activation of Central Payment still need to be reversed in the source system. The reversal is then replicated to the Central Finance system.  If an item posted in the source has been cleared/paid in Central Finance in the meantime, the user needs to manually reset the clearing in the Central Finance system before executing the reversal in the source system.  All documents that are posted in the Central Finance system after activation of Central Payment need to be reversed in the Central Finance system.

Central Payments for Intercompany AP/AR only

In general, when we activate SAP Central Payments all AP/AR invoices are technically cleared in source and replicated as open to target. With this feature only intercompany AP/AR open items with trading partner (VBUND) populated will be set to ALE-extern in the source system once they’re posted and can only be paid/cleared in the Central Finance system. Additionally, the deferred tax line item and net cash discount line item in the same document as these AP/AR items will also be set to ALE-extern in the source system.

Normal AP/AR (External) invoices will still be open and paid in source system(s). Also, important to note that CSPC will only work for intercompany AP/AR and all relevant dependent processes for intercompany AP/AR will be executed in target system. The trading partner company code should also be activated for Central Payment.

Down Payments

Central Payments also supports Down payments. A sales order is created in SD in the source system using conditions for down payment. The down payment is received in the Central Finance system referring to the sales order of the source system. Relevant down payment data is retrieved in the billing run from the Central Finance system

Down Payments for MM are also supported in Central Finance. A down payment request is created in MM in the source system and paid in the Central Finance system. Down payment clearing as well as the final payment are also done in the Central Finance system. The purchase order history is updated by different transactions from both the source system and the Central Finance system.

Cross System Process Control

When Central Payment is activated in SAP S/4HANA system the business processes are executed in various systems like invoice is in source and payment is in S/4HANA and this may result in business complexities for the dependent processes which were simple when end to end process was in one system. Complexities may be:

  • Clearing status is not available in source system
  • Dependent business processes on clearing status are now at halt
  • The mechanisms that are used to lock/validate the clearing status in a single system cannot be used in a cross-system scenario

SAP has introduced the new framework called Cross-System Process Control (CSPC) to allow the smooth and consistent flow of business processes which involve changes to documents and which are distributed across different systems where documents are replicated between the systems. Following controls can be implemented with this framework.

For FI Invoices, SD Invoices & any down payment requests, the system prevents the accidental reversal in source system in below cases:

  • The document has already been cleared in the S/4HANA Central Finance system.
  • The customer/vendor account is locked in the S/4HANA Central Finance system.
  • The corresponding replicated document is locked in the S/4HANA Central Finance system.
  • Individual Document reversal via FB08
  • Intercompany Document Reversal via FBU8

How to activate CSPC:

This involves some notes implementation and configuration in both source & CFIN systems

Central Payment Activation

  • Note 2815665 – in source system
  • Note – 2819756 in S/4HANA CFIN system
  • Note – 2855094 in S/4HANA CFIN system

Release restrictions:

  • Source should be minimum ECC 6.0
  • S/4HANA should be minimum 1709 FPS0

For issues in CSPC after activation refer to SAP notes

Managing Central Processes after Central Payment

  • Cash Management – After Central Payment is activated, Cash Management must run in the CFIN system as the payment postings are only available in the same system and source system may not have all relevant information. Also note that the clearing transfer must be activated for the relevant source system and to transfer classic cash management data (such as purchase orders, sales orders) from the source system to the Central Finance system, standard IDOC message type CMSEND, CMREQU can be used
  • Year-end Balance Carry forward – After activating Central Payment, the balance carry forward process has to be executed in CFIN system and also This needs to be executed in source system (ECC or S/4HANA), but the results in the source system and the Central Finance system will not necessarily match
  • Cash Journal – Several steps in Cash Journal needs to be executed in the source system so that the transfer process to CFIN system is successful. Below are the list of activities:
    • All checks must be submitted and the check lots must be posted
    • The cash journal must be set to zero by a closing entry
    • All documents in the cash journal need to have status posted, reversed or deleted and nothing should be in save status
    • After completion of all above, the cash journal in the source system can be closed using FBCJC0 and now it should be STOPPED for use in source system
  • Dunning – After activation of Central Payments, dunning must be performed in CFIN system. It will need several adjustments to have the data correct and reportable like dunning level and dunning key must be verified, dunning area and dunning block are mapped, the field Highest Dunning Level will be set in the customer master record as empty and each time accountant has to go to source system so this needs to be filled in CFIN system. Many other similar adjustments needs to be performed.
  • Intercompany Reconciliation Process – All Company codes involved in IC Reconciliation must have Central Payment activated and all the documents to be reconciled have been replicated to the Central Finance system (through initial load or ongoing replication). When Central Payment activation is done the IC Recon, process can be triggered for testing purposes.
  • Bank Account Management – After central payment activation the payments (for activated company codes) will be generated in CFIN system including the bank statements so before activation all bank statements must be posted in source system and no pending batch input sessions should exist. Any requirement to access historical bank statements can be met by logging into the relevant source system.

Last Update: August 22, 2023  

January 18, 2023 63 AbhayDev  About Central Finance
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