Why compliance need to be at the core of SAP Central Finance system?

Why Compliance Needs To Be At The Core Of Sap Central Finance?

SAP system consists of several fully integrated SAP modules, which covers virtually every aspect of the business management. In this blog post, you can reach some useful information on the SAP Central Finance and the difficulties that most companies face in terms of compliance.

Hope you find it useful!

What is SAP Central Finance?

SAP Central Finance, which is an approach to SAP Simple Finance software, has existed in the market for a while, and it can be seen as an approach to adopt SAP S/4HANA. This enables FI documents to be replicated in Central Finance system which runs on S/4HANA.

Central Finance is relevant and very useful in an organization where multiple older SAP ERP instances or other Non-SAP Finance applications exist. Central Finance uses speed and agility to replicate financial documents into the central system in real time, thus giving a real-time organization-wide financial view. Central Finance allows you to create a standard reporting system for any organization.

Also, it is possible to use SAP Central Finance to harmonize master data and replicate posting. To enable the transfer of data between source systems and Central Finance, it is needed to maintain mapping that determines the relationship between the source system’s data and central finance’s data.

Challenges of Tax Compliance

  • Tax compliance is a significant obstacle that many institutions may overlook from time to time.
  • As various governments around the world start and continue along on their unique digital changes and legislation, they seek to reacquire vast sums in lost revenue by making real-time tax enforcement mandatory.
  • This digital legislative transformation is having a very high-effect on even the best-run and most modernized companies’ plans for both SAP Central Finance and SAP S/4HANA migration.
  • SAP customers who move to SAP Central Finance, the scope of this migrative project will be vast and correct moving of the sensitive data will be prioritized. Although during this period tax compliance may start as an afterthought in migration efforts, care must be taken that this must not be.

Global tax mandates are complicated, and beyond that, they change constantly, and as such, they can reach intense levels in a company’s business processes. Failure to comply with these mandates both courts very significant financial penalties, and it will also profoundly affect cash flow, along with that the relationships to suppliers and customers.

  • Tax mandates can potentially disrupt and add high amounts of cost and delay to SAP Central Finance and S/4HANA migration efforts. Modernization of the financial core is outstanding for businesses to continue providing their services in countries where continuous compliance to tax enforcement mandates are becoming increasingly complex.
  • The migration itself can take a long time, in some cases years and tax mandates will evolve during that time in almost every geographical region.
  • Changing mandates might create a single-source system that can’t support digital transformation because it has become outdated and can’t manage compliance.

That is why it is very important to get a fully compatible solution for meeting future requirements globally!

We Can Help Your Business!

Sovos Foriba shapes the development of corporate software and integration services and stands to be the primary partner for its customers to stay compliant in various countries.

Would you like to learn about our tax regulation solutions? Get in touch with us for details. We are always happy to answer your question to determine your needs to provide the best experience!

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