maximizing cash management with sap erp financials

Eleazar Ortega Van Steenberghe

Maximizing Cash Management with SAP® ERP Financials

Bonn � Boston

324 Book_LOOSE.indb 3 9/7/10 10:52:33 AM

Contents at a Glance

1 Business and Functional Overview ......................................... 19

2 Global Banking and Payment Systems and Practices ............. 33

3 Advanced Inbound Electronic Banking in SAP ERP ................ 45

4 Advanced Outbound Electronic Banking in SAP ERP ............. 87

5 Overview of SAP Bank Communication Management ............ 159

6 In-House Banking with SAP ERP ............................................ 199

7 Global Liquidity Forecasting with Liquidity Planner ............. 241

8 Integration with Procure-to-Pay, Order-to-Cash, and Other Financial Processes ....................................................... 289

9 Global Cash Position Reporting and Management ................. 305

10 Building an Integrated SAP ERP Treasury System .................. 337

11 Leveraging Tools and Enhancements ..................................... 349


7

Contents

Preface ....................................................................................................... 13Acknowledgments ..................................................................................... 17

1 Business and Functional Overview ........................................... 19

1.1 International Cash Management ................................................. 191.1.1 Growing Importance of International Cash

Management .................................................................. 191.1.2 Key Business Processes in International Cash

Management .................................................................. 201.1.3 The Global Liquidity Crisis and the Treasury

Department ................................................................... 221.1.4 Challenges and Opportunities for the Treasury

Department ................................................................... 251.2 Regulatory Compliance and Governance Issues ........................... 25

1.2.1 SEPA .............................................................................. 251.2.2 International Accounting Standards (IAS) ....................... 271.2.3 Bank Secrecy Act ............................................................ 281.2.4 Stimulus Package ........................................................... 281.2.5 Regional Tax and Legal Requirements ............................. 291.2.6 Sarbanes-Oxley Act ........................................................ 30

1.3 Technology as an Enabler ............................................................ 301.3.1 Treasury Systems and Technology ................................... 301.3.2 The Case for ERP Treasury Systems ................................. 311.3.3 Key Drivers and Benefits of a Global ERP Treasury

System ........................................................................... 311.4 Summary .................................................................................... 32

2 Global Banking and Payment Systems and Practices .............. 33

2.1 Overview of International and Regional Banking ......................... 332.1.1 International Banking ..................................................... 332.1.2 Regional Banking ........................................................... 342.1.3 Universal Elements of a Payment Process ....................... 35


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Contents

2.2 Challenges for Global Treasury Management ............................... 362.2.1 Treasury Technology Platforms ........................................ 372.2.2 Centralized versus Decentralized Treasury Operations ..... 382.2.3 Integrated versus Standalone Treasury Operations .......... 40

2.3 Leveraging SAP ERP Treasury Functionality ................................. 412.3.1 Cash and Liquidity Management .................................... 412.3.2 Treasury and Risk Management ...................................... 422.3.3 SAP In-House Cash ......................................................... 422.3.4 SAP Bank Communication Management ......................... 422.3.5 Bank Communications and Interfaces ............................. 432.3.6 SAP ERP Tools and Architecture ..................................... 44

2.4 Summary .................................................................................... 44

3 Advanced Inbound Electronic Banking in SAP ERP .................. 45

3.1 Business Process Overview .......................................................... 453.1.1 Importing Bank Master Data .......................................... 463.1.2 Importing Electronic Bank Statements ............................ 463.1.3 Importing the Cashed Checks File ................................... 523.1.4 Processing Lockbox Files ................................................ 52

3.2 Inbound Processes: Screens and Examples ................................. 533.2.1 Importing Bank Master Data .......................................... 533.2.2 Importing Electronic Bank Statements ............................ 553.2.3 Importing Cashed Checks Files ....................................... 633.2.4 Importing Lockbox Files ................................................. 64

3.3 Configuration and Integration of Inbound Processes ................... 673.3.1 Importing Bank Master Data .......................................... 673.3.2 Importing Electronic Bank Statement ............................. 683.3.3 Importing Cashed Checks Files ....................................... 823.3.4 Importing Lockbox Files ................................................. 82

3.4 Summary .................................................................................... 85

4 Advanced Outbound Electronic Banking in SAP ERP .............. 87

4.1 Business Process Overview ......................................................... 874.1.1 Check Payment Processing and Positive Pay File

Generation ..................................................................... 884.1.2 ACH Payments: Domestic and International ................... 91


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Contents

4.1.3 Wire Transfers ................................................................ 944.1.4 Cash Concentration ........................................................ 101

4.2 System Configuration .................................................................. 1024.2.1 House Bank and Account ID Creation (Including ALE

Configuration) ................................................................ 1034.2.2 Payment Program Configuration ..................................... 1164.2.3 Cash Concentration Configuration .................................. 138

4.3 Business Process Examples .......................................................... 1404.3.1 Payment Process ............................................................ 1414.3.2 Cash Concentration ........................................................ 154

4.4 Summary .................................................................................... 157

5 Overview of SAP Bank Communication Management ............. 159

5.1 Evolution of Bank Communications and Introduction to the SWIFTNet Service ....................................................................... 160

5.2 SAP Bank Communication Management Functionality Overview ... 1645.2.1 Merge Payments ............................................................ 1655.2.2 Approve Payments — Batch and Payment Monitor ......... 1665.2.3 Bank Statement Monitor ................................................ 168

5.3 SAP Bank Communication Management Configuration ............... 1705.3.1 Basic Settings ................................................................. 1715.3.2 Payment Grouping ......................................................... 1715.3.3 Payment Status Management ......................................... 1755.3.4 Bank Statement Monitor ................................................ 1775.3.5 Release Strategy ............................................................. 178

5.4 SAP Bank Communication Management in Action ...................... 1845.4.1 Bank Statement Monitor ................................................ 1845.4.2 Batch and Payment Monitor ........................................... 189

5.5 Summary .................................................................................... 197

6 In-House Banking with SAP ERP .............................................. 199

6.1 Overview of SAP In-House Cash ................................................. 1996.1.1 Key Drivers for Implementing SAP In-House Cash .......... 2026.1.2 Business Scenarios Supported by SAP In-House Cash ...... 2036.1.3 Cost Benefit Considerations ............................................ 206

6.2 Master Data ................................................................................ 208


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Contents

6.3 System Configuration .................................................................. 2096.3.1 Bank Key Terms .............................................................. 2096.3.2 Virtual Bank Creation ..................................................... 2106.3.3 ALE Configuration .......................................................... 2116.3.4 SAP In-House Cash General Configuration ...................... 2146.3.5 SAP In-House Cash Payments Configuration ................... 2186.3.6 SAP In-House Cash Collections Configuration ................. 227

6.4 Periodic Tasks ............................................................................. 2296.5 Reporting ................................................................................... 2306.6 Examples of SAP In-House Cash in Action ................................... 2316.7 Summary .................................................................................... 239

7 Global Liquidity Forecasting with Liquidity Planner ............... 241

7.1 Business Process Overview .......................................................... 2417.1.1 Cash Accounting ............................................................ 2437.1.2 Liquidity Planning and Reporting ................................... 246

7.2 Liquidity Item Assignment Programs ........................................... 2497.2.1 Assigning Liquidity Items from Bank Statements ............. 2507.2.2 Assigning Liquidity Items from Financial

Accounting Documents .................................................. 2517.2.3 Assigning Liquidity Items from Accounts Payable

Invoices ......................................................................... 2527.2.4 Assigning Liquidity Items Manually ................................ 252

7.3 Configuration of Cash Accounting ............................................... 2537.3.1 Basic Settings Liquidity Calculations ............................... 2537.3.2 Assignment .................................................................... 2577.3.3 Query Definition ............................................................ 2617.3.4 Information System ........................................................ 2657.3.5 Additional Liquidity Planner Tools .................................. 268

7.4 Liquidity Planner in Action .......................................................... 2697.4.1 Cash Accounting: Calculation of Actual Cash Flows ........ 2697.4.2 Data Extraction to SAP NetWeaver BW .......................... 2757.4.3 Planning in Liquidity Planner .......................................... 2777.4.4 Reporting and Actual versus Plan Comparisons ............... 281

7.5 Summary .................................................................................... 286


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Contents

8 Integration with Procure-to-Pay, Order-to-Cash, and Other Financial Processes ......................................................... 289

8.1 Integration Points for the Cash Position and Liquidity Forecast Reports ......................................................................... 2898.1.1 Integration with Sales and Distribution ........................... 2908.1.2 Integration with Accounts Receivable ............................. 2928.1.3 Integration with Purchasing ............................................ 2948.1.4 Integration with Accounts Payable ................................. 2968.1.5 Integration with Transaction Manager ............................ 2988.1.6 Integration with SAP In-House Cash ............................... 300

8.2 Forecasting in Liquidity Planner .................................................. 3038.3 Summary .................................................................................... 304

9 Global Cash Position Reporting and Management .................. 305

9.1 Introduction to the Cash Position Report .................................... 3079.1.1 Working with the Cash Position and Liquidity

Forecast Reports ............................................................ 3089.1.2 Memo Records .............................................................. 314

9.2 Cash Management Configuration ................................................ 3209.2.1 Activating the Default Value Date ................................. 3209.2.2 Configuring Source Symbols ........................................... 3219.2.3 Configuring Planning Levels ............................................ 3229.2.4 Configuring Cash Management Account Names ............. 3249.2.5 Configuring Planning Groups .......................................... 3269.2.6 Structuring the Cash Position Report .............................. 3279.2.7 Configuring the Distribution Function ............................ 3299.2.8 Configuring Archiving Categories .................................... 3309.2.9 Configuring Memo Records ............................................ 3329.2.10 Defining Levels in Payment Requests .............................. 3339.2.11 Configuring Production Startup and Reorganization ....... 334

9.3 Summary .................................................................................... 336

10 Building an Integrated SAP ERP Treasury System ................... 337

10.1 Treasury Workstations versus ERP Systems .................................. 33710.2 Migrating Standalone Treasury Workstations to SAP ERP ............ 339


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Contents

10.3 Implementing SAP ERP Treasury Applications ............................. 34010.3.1 Project Methodology ..................................................... 34010.3.2 “Big Bang” or “Phased Roll Out” .................................... 34310.3.3 Time and Resources ....................................................... 34410.3.4 Lessons Learned ............................................................. 345

10.4 Summary .................................................................................... 347

11 Leveraging Tools and Enhancements ....................................... 349

11.1 Architecture Options for SAP FSCM ............................................ 34911.2 Tools and Architectures of SAP ERP ............................................. 350

11.2.1 Business Framework Architecture (BFA) .......................... 35111.2.2 SAP NetWeaver Process Integration

(SAP NetWeaver PI) ....................................................... 35211.3 SAP Enhancement Packs and New Treasury Functionality ............ 35311.4 Summary .................................................................................... 354

The Author ................................................................................................ 355Index ......................................................................................................... 357


199

This chapter uses examples of business scenarios to explain how companies can leverage the SAP ERP Financials In-House Cash component to auto-mate and manage intergroup and intragroup payments, as well as inte-grate with SAP ERP Financials and Cash Management.

In-House Banking6 with SAP ERP

ThischapterreviewsmostaspectsoftheSAPIn-HouseCashfunctionality.InSec-tion6.1,OverviewofSAPIn-HouseCash,weprovideanoverviewofthefunction-ality.InSection6.2,MasterData,wegointomorespecificsbydescribingthemainmasterdataobjectsinvolvedinthefunctionality.InSection6.3,SystemConfigura-tion,weprovidestep-by-stepconfigurationinstructions.InSection6.4,PeriodicTasks,welistthemainperiodictasks.InSection6.5,Reporting,welistandexplainthemainreportsavailable.Finally,inSection6.6,ExamplesofSAPIn-HouseCashinAction,weprovideawalkthroughofthefunctionality.

Overview of SAP In-House Cash 6.1

Inthissection,wedescribewhatSAPIn-HouseCashis,whyyoushouldimple-mentit,howtodeterminewhetherit’sagoodfitforyourcompany,andwhatthecostimplicationsare.

SAPIn-HouseCashisusedtoperformwhatisknownasin-house banking,whichprovidesyouwithsomeservicesthatareusuallyprovidedbyexternalbanks,forexample,intercompanycashtransfers,loanservices,investmentservices,andnet-tingservices.

ThebestwaytounderstandtheSAPIn-HouseCashfunctionalityistoseehowcompaniesworkwithandwithoutit,solet’sanalyzesomeexamples.Figure6.1showsatypicaldecentralizedtreasuryprocessthatdoesnotuseSAPIn-HouseCash,withpaymentstovendorsandcollectionsfromcustomersbeingprocessed


200

In-House Banking with SAP ERP6

ateachsubsidiary,andinwhichheadquartersonlygetsacopyofeachsubsidiary’sbankstatementandreportsoncash.

Subsidiary A Subsidiary BReports Reports

Headquarters

Invo

ice

Paym

ent

Vendor

Bank

Invo

ice

Paym

ent

Customer

Bank

BankStatement

BankStatement

FinancialStatementsand CashReports

Decentralized Treasury Processing Without SAP In-House Cash Figure 6.1

Althoughthisistheeasiestprocesstosetup,thereissomeinefficiencyassociatedwithitbecauseyouareprocessingthesamefunctionsforeachcompanyandhav-ingtokeepaheadcountforthatpurpose.Forexample,ifyouhave100subsidiar-iesthatpaythesamevendor,youmayalsohavetomaintain100APdepartments,receiveandreview100invoices,cut100checks,andreconcile100outstandingchecks.Inthiscase,eventhoughthesetupisveryeasy,theongoingcostisveryhigh.

Figure6.2showsacentralizedtreasuryprocessthatalsodoesnotuseSAPIn-HouseCash.(AlthoughitisacommonmisconceptionthatyouneedSAPIn-HouseCashtocentralizetreasuryprocesses,thisisnottrue.)Inthisexample,payableinvoicesareforwardedtoasharedservicesdepartmentatheadquarters,wheretheyarevalidatedandpaid.Inaddition,paymentsfromcustomersareforwardedtoahead-quartersbankaccountviacashconcentration.

Theresultingdebitsandcreditsbetweensubsidiariesandheadquartersareresolvedthroughautomatedintercompanypostings.


201


Subsidiary A Subsidiary BInvoices

Payment

Cash

Headquarters

Invo

ice

Vendor

Bank

Bank

Invo

ice

Paym

ent

Customer


Inter-CompanyPostings

Inter-CompanyPostings

BankStatement

Centralized Treasury Processing Without SAP In-House CashFigure 6.2

InthespecificexampleshowninFigure6.2,if100subsidiariesgetinvoicesfromthesamevendor,youneedmaintainonly1APdepartment,cutonly1check,andreconciletheclearingforonlythatcheck.Thesetupismorecomplicatedbecauseyouhavetoconfiguretheautomaticintercompanypostings,buttheongoingcostsaremuchlower.

What’sinconvenientaboutthisschemaisthatifyouwanttodeterminehowmuchcashbelongstoeachsubsidiaryatanymomentintime,youmustreadthelineitemsoftheintercompanyaccount,whichcanbetediousandtime-consuming.ItisabitlikemanagingfixedassetsusinggeneralledgeraccountsinsteadoftheAssetscomponent:It’spossible,buttime-consumingandnotuser-friendly.

InFigure6.3,paymentsandcollectionsareprocessedcentrally;however,insteadofusingtheintercompanyaccounttoreconcilehowmuchcashbelongstoeachsubsidiary,youuseSAPIn-HouseCash.Thiscomponentkeepstrackofcashatalltimes,producesbankstatementsforeachsubsidiary,andprovidesreportsofhowmuchcashbelongstoeachsubsidiaryatanymomentintime.Thesystemalsoallowsyoutoputtogethersurplusesofcashfromallsubsidiariesandusethosesurplusestolendmoneytothesubsidiariesthatneedit.Whiledoingthis,SAPIn-HouseCashcanchargeinteresttothosesubsidiariesthatborrowandpayinteresttothosesubsidiariesthatlend.


202


Subsidiary A Subsidiary BPayment Order

IDoc

Invo

ice

Vendor

Invo

ice

Customer


IHC BankStatement

IDoc IHC Center

Tran

sact

ions

Stat

emen

tsBank

Payment Cash

IHC BankStatement

IDocHeadquarters

Centralized Treasury Processing with SAP In-House CashFigure 6.3

In this section, we provide an overview of SAP In-House Cash, specifically focusingonthekeydriversforimplementingthecomponent,businessscenariossupportedforit,andcost-benefitconsiderationsassociatedwithit.

Key Drivers for Implementing SAP In-House Cash6.1.1

YourcompanymightconsiderinvestinginSAPIn-HouseCashforanumberofreasons,includingthefollowing:

To optimize your capital structure. EE

Instead of having to keep a large number of bank accounts and loans with mul-tipleinstitutions,incurringmultiplefees,SAPIn-HouseCashallowsyoutousevirtualbankaccountsformanyofyourneedsandonlyuseexternalbanksforthosethingsthatcannotberesolvedinternally.

To save in interest and banking fees. E

Byusingyourownsystemtoprovidefinancialservices,youavoidpayingcon-tractfees,wiretransferfees,interestonexternalloans,andsoon.


203


To solve some financial needs internally instead of using a bank. EE

Insteadofprocessinganinternationalwiretransfertosendmoneyfromonecompanytoanother,youcandoapaymentorderinSAPIn-HouseCashandavoidthefee.Thiscanalsobedonewithloansandotherfeatures.

To use cash surpluses to finance other companies within the group. EE

Insteadofinvestingcashsurplusesat1%,youcanlendthemtoanotherofyourcompaniesforalittlemore.Thiswillstillbecheaperforthatcompanythanifitweretoborrowthemoneyfromabank.

To increase interest revenue. EE

Bylendingmoneywithinyourgroup,yougaininterestrevenue.

To have a better control of your cash. EE

Thesystemallowsyoutomonitorwhereyourcashgoesandhowmuchbelongstoeachcompanywithinyourgroup.

To gain the ability to net and combine payments for multiple subsidiaries. EE

Insteadofcuttingmultiplechecksforthesamevendor,youcombineandpro-duceonlyonecheck.

To comply with statutory cash reporting requirements. EE

SeveralrequirementsforregulatedindustriesandforinternationalcompaniescanonlybefulfilledwithSAPIn-HouseCash.

Business Scenarios Supported by SAP In-House Cash6.1.2

ThreemainscenariosaresupportedbySAPIn-HouseCash:

CentralpaymentsEE

IntercompanypaymentsEE

CentralcollectionsEE

InFigure6.4,weshowanexampleofacentralpaymentinwhichasubsidiaryreceivesaninvoicefromavendor,reviewsandapprovesit,andthenrunsthepaymentprogramatthesubsidiarylevel.ThisgeneratesanIDocwithapaymentorder.


204


Accounts Payableat subsidiary

verifies and preparesfor payment

Vendor submitsinvoice tosubsidiary

IDoc paymentorder is sent

to IHC

IDoc paymentrequest is sent

to Treasury

AP

Subs

idia

ryIH

C C

ente

rTr

easu

ryB

ank

Accounts Payableruns payment

program atsubsidiary

IHC reflects out-bound cash in IHC

bank statement

Treasury runspayment program

and sends paymentto the bank

Bank sends paymentto vendor and

reflects transactionin bank statement

IHC processespayment order

END

Central PaymentsFigure 6.4

ThepaymentorderisapprovedintheSAPIn-HouseCashcomponent,and,whenthisisdone,thecashbalanceofthesubsidiaryisupdated(lowered),andapay-mentrequestiscreated.Thetreasurydepartmentthenusesthepaymentprogramforpaymentrequeststoissueawirepaymenttothevendor.Thebankreceivesthewireinstructionsandsendsthecashtothevendor,whichisreflectedintheelectronicbankstatementthenextday.

InFigure6.5,weshowanexampleofanintercompanypaymentwhereonesubsid-iarysubmitsaninvoicetoanother,andthereceivingsubsidiaryreviews/approvesitandrunsthepaymentprogram.ThisproducesanIDocwithapaymentorder.

ThetreasurydepartmentapprovesthepaymentorderwithinSAPIn-HouseCash,whichlowersthecashbalanceofthepayingsubsidiaryandincreasesthecashbal-anceofthereceivingsubsidiary.SAPIn-HouseCashthenissuesupdatedinternalbankstatementstoeachsubsidiary;eachsubsidiaryreceivesthe internalbankstatementandautomaticallyupdatesitsgeneralledger.


205


Subsidiary Bsubmits invoiceto subsidiary A

IDoc paymentorder is sent

to IHC

AR

Sub

sidi

ary

BIH

C C

ente

rA

R S

ubsi

diar

y A

Accounts Payableat subsidiary A

verifies and preparesfor payment

Accounts Payableruns payment

program atsubsidiary A

IHC updates accountbalances with cashmovements in IHCbank statements

IHC processespayment order

ENDGeneral Ledger

is updatedwith new cash

balance

General Ledgeris updated

with new cashbalance

Intercompany PaymentsFigure 6.5

Atthispoint,thecashbalanceinthegeneralledgermatchesthecashbalanceinSAPIn-HouseCash.Thetransferiscompletedwithouthavingtoissueanexter-nalpaymentortalktoanexternalbank;virtualcashismoved,butrealcashstaysinthesameplace.Thismaybehardtograspthefirsttimeyouheartheprocessexplained,buthundredsofcompaniesdothisaroundtheworldeveryday.

Figure6.6showsanexampleofcentralcollections,inwhichasubsidiarysendsaninvoicetoacustomer,andthecustomerreviewsitandsendsthepaymenttothebank.Thebankthenprocessesthepaymentandsendsanupdatedelectronicbankstatementtoheadquarters,andthenheadquartersprocessesallofthebankstatementsforallofthesubsidiaries.Afterthisiscompleted,SAPIn-HouseCashdetermineswhichdepositsbelongtowhichsubsidiaries,andsendsupdatedelec-tronicinternalbankstatementstoeachsubsidiary.Eachsubsidiaryreceivestheinternalbankstatementandautomaticallyupdatestheaccountingtoreflectthenewcashbalance.


206


IHC processes bankstatement and sendsupdated IHC accountstatement IDOC to

subsidiary

Invoice sentto customerfor payment

Bank processespayment and sends

updated bankstatement

AR

Sub

sidi

ary

Cus

tom

erB

ank

IHC

Cen

ter

Accounts Payableat customer verifies

and preparesfor payment

IHC reflects out-bound cash in IHC

bank statement

Customer sendspayment to

bank

ENDGeneral Ledger

is updatedwith new cash

balance

Central CollectionsFigure 6.6

Cost Benefit Considerations6.1.3

SAPIn-HouseCashisnotsuitableforallcompaniesbecauseithassignificantpro-cessimplicationsandcosts.It’simportanttomakesureitfitstheneedsofyourorganization,oryourreturnoninvestmentwon’tjustifyitsimplementation.

Someof the costs and implications associatedwithSAP In-HouseCash are asfollows:

TheAPEE processgainstwoextrasteps,whichmakestheprocessmorecomplex.

ThenewprocessrequirestheextensiveuseofIDocsEE ,sotheAPandtreasuryteamsmustbetrainedonhowtohandlethem.

At least one individual is needed to run and follow up on end-of-dayEE

processes.


207


ThereistighterintegrationamongAP,treasury,andaccounting,whichrequiresEE

coordination.

SomecustomreportsandenhancementsmaybeneededtofulfillsomespecificEE

requirements.

FollowingaresomeguidelinesthatmightindicatethatyourcompanyneedsSAPIn-HouseCash:

You have more than one company in your group. EE

SAPIn-HouseCashrequiresmorethanonecompanyinyourgrouptowork.

You incur very high costs on banking feesEE . Ifyousendalotofinternationalwiretransfersbetweencompanies,andpayfeestoinvestexcesscashinsomecompaniesandsetuploansinothers,youmayhaveagoodbusinesscasetoimplementSAPIn-HouseCash.

You operate in more than one country. EE

Mostcountriesrequiredetailedcashreporting.Evenifthecashisdepositedinbankaccountsinadifferentcountry,cross-borderpaymentsarecloselymoni-toredbyauthorities(evenmoresoafter9/11).

Your company is part of a regulated industryEE that requires detailed report-ing on cash. Certainindustries,suchasutilities,cannotbeallowedtogobankrupt.Toavoidthatfromhappening,theyhavetheircashbalancesandliabilitiescloselymoni-toredbyauthorities.Inmostcases,therequiredreportscanbeaccommodatedbySAPIn-HouseCash.

You pool cashEE between companies. Ifyouarealreadyusedtolendingcashbetweencompanies,SAPIn-HouseCashcanmakethistaskeasier.Insteadofhavingtousetheintercompanyaccounttotrackthebalanceoftheseloans,SAPIn-HouseCashkeepstrackforyou.

Ifseveralofthesepointsapplytoyourcompany,youshouldconsideranSAPIn-HouseCashimplementation.


208


Master Data6.2

ThissectionlistsanddescribesthemainmasterdataobjectsassociatedwithSAPIn-HouseCash.

Business partnersEE In this component, business partners are primarily banks, brokerage firms,othersubsidiariesinyourgroup,and,insomeinstances,customersorvendors.Ifyouhavemorethanonebankarea,youmustsetupeachbankareaasabusi-nesspartnertoo.

ConditionsEE IfyouchargeinteresttosubsidiarieswhoborrowfromtheSAPIn-HouseCashcenterandpayinteresttothosewhoinvestonit,orifyouchargefeestothesubsidiaries,youmustsetupconditions thatdetail interestrates,valuedates,andsoon.

LimitsEE Insomeinstances,particularlyinregulatedindustries,therearesomelimitstohowmuch you can borrow from the SAP In-HouseCash center (commonlyreferredtoasthemoney pool).Sometimes,companiescanborrowuptoacertainpercentageofthepoolassets;othertimes,therearerestrictionsknownaslimits.Iftheparticularconditionyouwanttoimplementisnotsupportedwithstan-dard limitfunctionality,youmayhavetodosomedevelopment.

Product definitionEE SAPIn-HouseCashusesproductsinasimilarwaytotheTransactionManager,inthesensethattheconditionsyouuse,thetransactiontypesassociatedwiththem,andseveralotherfunctionsaredeterminedbywhichproductyouconfig-ureanduse.

AccountsEE InSAPIn-HouseCash,youmustcreateanaccountforeachofyoursubsidiar-ies(possiblymore);theaccountcontrolsanumberofmanagementandadmin-istration functions, whichwe discuss inmore detail in Section 6.3, SystemConfiguration.


209

System Configuration 6.3

System Configuration6.3

Tomaketheexplanationseasiertounderstand,thissectionisdividedintosixdif-ferentsubsections:

BankkeytermsEE

VirtualbankcreationEE

ALEconfigurationEE

SAPIn-HouseCashgeneralconfigurationEE

SAPIn-HouseCashpaymentsconfigurationEE

SAPIn-HouseCashcollectionsconfigurationEE

Bank Key Terms6.3.1

Beforewegetintobankconfigurationdetails,let’slookatthedefinitionsforsomeofthemostimportantbankterms:

Bank master dataEE Referstoallexistingbanksintheworld,regardlessofwhetherornotyourcom-panyhasabankaccountthere.

House bankEE Referstoonlythosebanksinwhichyourcompanyhasaccounts.

Account IDEE Referstothosebankaccountsownedbyyourcompany.

Bank ALE partnerEE ReferstothesettingsinALEneededtosend/receiveIDocsto/fromaspecificbank.

Bank areaEE ReferstothehighestorganizationalstructurewithinSAPIn-HouseCashandisusuallytheentitywhereSAPIn-HouseCashprocessesarecentralizedandper-formed.ItisalsoknownastheSAPIn-House Cash center.


210


Virtual Bank6.3.2 Creation

EventhoughtheSAPIn-HouseCashcenter isavirtualbank, ithas toexist intheSAPsystemtobeused.Tocreatethebank,executeTransactionF101(Figure6.7).

Create Bank: Initial ScreenFigure 6.7

OnthescreenshowninFigure6.7,enterthecountryandthenumbers99999999,whichdon’tbelongtoanyrealbank,andthuscanbeusedforavirtualbank.SelectEnter.

Change Bank: Detail ScreenFigure 6.8


211

System Configuration 6.3

ThescreenshowninFigure6.8containsspecificbankinformation.Enter“In-HouseCashCenter”intheBankNamefield,andthenenterthestateandstreetaddress.Becausethisisavirtualbank,youdon’tneedtoenteradditionaladdressdetails.

ALE Configuration6.3.3

ApplicationLinkEnabling(ALE)istheSAPfunctionalityusedtoconnecttwosepa-ratesystems.ThiscommunicationoccursviaIDocs(intermediate documents),whicharefilesthathaveaspecificlayoutdefinitionandaresenttoaspecificdestination(port).IDocsarefrequentlyusedwhencustomershavemultipleinstancesofSAPanddecidetosetupSAPIn-HouseCashinmorethanoneofthem.Forthistowork,youneedIDocstosendandreceivetheinformationbetweensystems.

Figure6.9showsthetechnicalarchitectureoptionsforSAPIn-HouseCash.Asyoucansee,SAPIn-HouseCashcanbesetuponthesamesystemasSAPERP,oritcanbesetupinadifferentsystem(whichiscommonwhenyouhavediffer-entsubsidiariesindifferentinstancesofSAP)—butit’simportanttounderstandthat,ineithercase,ALEhastobefullyconfigured.Thisisthewaythesystemisdesigned.

SAP in-house cashand SAP ERP on the

same server

Note: In both options, ALE has to be configured 100%

SAP in-house cash andSAP ERP on different

servers

SAP ERP& SAP IHC

Center

SAPERP

SAPERP

SAP IHCCenter

Technical Architecture Options for SAP In-House CashFigure 6.9


212


Figure6.10showstherequiredALEsettings,ascreenthatisaccessedviaTransac-tionWE21.Thepurposeofthetransactionsistocreateaport,whichisthedesti-nationofanIDoc.

ALE Port Creation Initial ScreenFigure 6.10

ClickontheCreateiconinthetop-leftcorner,andthepromptshowninFigure6.11appears.

ALE Port Creation PromptFigure 6.11


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System Confi guration 6.3

Thesystemasksifyouwantittocreatetheportname,orifyouwillassignityour-self.Ingeneral,werecommendlettingthesystemassignit.ClicktheEnterbutton,andthescreenshowsinFigure6.12appears.

Create ALE Port DetailsFigure 6.12

EnteradescriptionintheDescriptionfield;ifyourSAPIn-HouseCashsystemisonthesameserverasSAPERP,enter“SendIDocstoself.”Then,intheRFCDesti-nationfield,enterthetechnicalnameoftheSAPinstanceandclienttowhichyouwillbesendingtheIDocs.

NowexecuteTransactionWE20,whichisthescreenshowninFigure6.13.Createbankpartner99999999,which,youwillrecall,isthebankwepreviouslycreatedinTransactionFI01.ThebankneedstoexistinthesystemforALEtorecognizeit.

CreatetheALEpartnerforthebankaspartnertypeB(Bank),andthenlinkittoamessagetype.Inourexample,weusemessagetypePAYEXT,whichisthemessagetypicallyusedforpaymenttransactions.IntheMessageCodefield,enter“IHC”forSAPIn-HouseCash.Enter“F1”intheMessageFunctionfield.


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Bank ALE Partner Profi le Defi nitionFigure 6.13

IntheOutboundParameterstab,enterthereceiverportthatyoucreatedintheprecedingstep,selectTransferIDocImmed.,andenter“PEXR2002”intheBasicTypefield(thisistheIDocusedforsendingpaymentfilestobanks).

SAP In-House Cash General Configuration6.3.4

Inthissubsection,wediscusssettingsthatarenotspecifictoeitherpaymentsorcollectionsbutthatareneededforthesystemtooperate.Thefirststepistocreatethebankarea.ThisisthetoporganizationalentityinSAPIn-HouseCash;youusu-allycreateiteitherinthecompanythatholdsyourheadquartersortheonethatholdsyourSharedServicesCenter.IfyouhavemultipleSharedServicesCentersaroundtheglobe,youcancreatemultiplebankareas,but,remember,themoreyouhave,themorecomplexyourprocesswillbe.


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Toaccesstheconfigurationofabankarea,usethefollowingmenupath:SAP Cus-tomizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Basic Settings • Bank Area • Defi ne Bank Area.

OnthescreenshowninFigure6.14,enteradescription,thecountry,thebankkey(usually,99999999),thelanguageandcurrency,acalendar,atimeforpostcutoff(thisisthetimeatwhichyouclosepostingsfortheday),anexchangeratetype(Misthedefault),thecompanycodewherethebankareawillreside,andthegeneralledgervariant.

Youwillprobablyneedtocreateyourowngeneralledgervariant;todothis,gototheIMG,andusethefollowingmenupath:SAP Customizing Implementa-tion Guide • Financial Supply Chain Management • In-House Cash • Periodic Tasks • General Ledger Transfer • Maintain GL Variants.Inthatscreen,enteryourvariantnameanddescription,thechartofaccountsused,theclearingaccountfortransactions,thedocumenttype,andthepostingkeystouseforIHCpostings.ActivatethelogandtheIHCarea.

Confi guration of a Bank AreaFigure 6.14


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Thenextstepistoassignproductstoabankarea;todothis,usethefollowingmenupath:SAP Customizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Master Data • Product Defi nition • Product •

Assign Products to Bank Areas.ThistakesyoutothescreenshowninFigure6.15.

Assign Products to Bank AreaFigure 6.15

InthescreenshowninFigure6.15,assignSAPIn-HouseCashproducttypestoyournewlycreatedbankarea.Youcancopytheonesassignedto0001toyourownbankarea.

Thenextstepistodefinetransactiontypes.Todothis,usethefollowingmenupath: SAP Customizing Implementation Guide • Financial Supply Chain Man-agement • In-House Cash • Account Management • Payment Processes in In-House Cash • Defi ne Transaction Types.ThistakesyoutothescreenshowninFigure6.16.


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SAP In-House Cash Transaction TypesFigure 6.16

Therearetwotypesoftransaction,debitsandcredits,andforeachofthose,therearebothexternalandinternaltransactions.InthescreenshowninFigure6.16,youconfigurethesettingsspecifictoeach,specifyinginformationsuchaswhichrequiresacheck,whichrequiresatransfer,whichisexternal,andsoon.Ifyouarenotsure,youcanprobablycopythesettingsinthisexample.

Thenextstepistodefineaclearingpartner,whichyoucanthinkofastheclear-inghouseusedbythebankstosettleinterbanktransactions.Usethefollowingmenupath:SAP Customizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Account Management • Payment Processes in In-House Cash • Defi ne Clearing Partner.ThistakesyoutothescreenshowninFigure6.17.

Clearing Partner Defi nitionFigure 6.17

Intheprecedingexample,theclearingpartneriscalledFI,whichisthedefaultsetting.WeexplainhowthisworkslaterinFigure6.21.


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SAP In-House Cash Payments Configuration6.3.5

Let’s nowdiscuss the settings that are necessary for payment transactions toworkproperly.Usethefollowingmenupath:SAP Customizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Account Man-agement • Payment Processes in In-House Cash • Make Basic Settings for Pay-ment Processes. In theresultingscreen,selectyourbankarea,andthenclickonProcessingTransactionon the leftmenu.Thescreenshown inFigure6.18appears.

Initial Screen of Basic Settings for Payment Processes Figure 6.18

Figure6.18istheinitialscreenforprocessingpaymenttransactions.Inthisscreen,youmustlinkyourbankareaandeachofthetransactiontypestoaprocessingmethod,whichcanbeprovisionalorfinal.IfyouselectProvisional,youmustrunanotherprocesstomakethefinalposting;ifyouselectFinal,theextraprocessisunnecessary.WerecommendselectingFinal.

Ifyouselect theForwarder indicator foraprovisionalprocessingmethod, thesystemsendsIDocswiththepaymenttotheclearingpartner;ifyoudon’tcheckit,theIDocisonlycreatedwhenyouruntheadditionalprocesstomakethefinalposting.


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NowclickonSettlementAccounts,andthescreenshowninFigure6.19appears.

Confi guration of Settlement AccountsFigure 6.19

EnteryourbankareaintheBankcolumn,enteryourmaincurrencyintheCrcycolumn,enter“Final”intheSettlmtCatcolumn(unlessyouselectedProvisionalintheprevioussection),andentereachofyourSAPIn-HouseCashaccounts(eachofyoursubsidiaries)asPayerintheItemTypecolumn.Theonlyexceptiontothislastoptionisthecompanywhereyourbankareasits;inthiscase,entertheItemTypeasCounterparty.IntheCred/Debcolumn,youneedanentryforDebitandanentryforCreditforeachofyoursubsidiaries.LeavetheTrancolumnblank.EnterthebusinesspartnerthatyoucreatedforeachsubsidiaryinthePartcolumn.EntertheSAPIn-HouseCashaccountthatyoucreatedforeachsubsidiaryintheAccountNumcolumn.

ClickonPostingData,andthescreenshowninFigure6.20appears.


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Posting Data Confi gurationFigure 6.20

EnteryourbankareaintheBankAreacolumn,enter“Final”(unlessyouprevi-ouslyenteredProvisional)intheSettlmtCatcolumn.AddoneentryforDebitandanotherforCreditMemo.LeavetheTransactioncolumnblank.IntheMediumandPayMethcolumns,enter“0001”;intheTATypecolumn,enter“5110”forcreditand“0150”fordebit.Youcanthinkofthesenumbersastheequivalentof40and50forthepostingkeysinthegeneralledger.

ClickonAccountsforClearing,andthescreenshowninFigure6.21appears.

Accounts for Clearing Partner Confi gurationFigure 6.21


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Enteryourbankarea,theclearingpartnercreatedpreviously(FI,inourexample),yourcurrency,andthesettlementcategoryyou’reusing(mostlikelyFinal).IntheAccountNumberfield,entertheSAPIn-HouseCashaccountofthesubsidiary(orheadquarters)wherethebankareasits.

ClickonPaymentMethodData,andthescreenshowninFigure6.22appears.

Payment Method DataFigure 6.22

InthescreenshowninFigure6.22,enteryourbankarea,clearingpartner,andcurrencyintheappropriatecolumns.IntheTransactioncolumn,createanentryforeachtransactiontype(EXTDEB,EXTPAY,INTDEB,andINTPAY).ForEXTPAY,insteadofoneentry,enteroneforeachpaymentmethodthatyouwilluse.IntheexampleinFigure6.22,ourpaymentmethodswereWire,Check,andACH—hencetheA,C,andW.However,don’tconfusetheseletterswiththenamesofthepaymentmethodsusedinthepaymentprogram;wemapthesetothepaymentmethodsusedinthepaymentprogramlater.

ClickonCommunicationData,andthescreenshowninFigure6.23appears.

Itisimportantthatyouconfigurethisscreencorrectly,ortheIDocswon’twork.Enteryourbankarea,clearingpartner,andcurrencyintheappropriatecolumns.IntheRec.Partn.Type,enter“B”forthebankpartnertype.InthePartn.No.column,enterthebankkeyforyourSAPIn-HouseCashcenter(theonewecon-figuredinSection6.3.2,VirtualBankCreation).IntheMsg.Var.column,enter“IHC”;inMsg,Funct.,enter“FI”;intheAccountcolumn,entertheaccountofthe


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subsidiarywhereyourSAPIn-HouseCashcentersits.(YoumayrememberthatthesearethesamevaluesweconfiguredinSection6.3.3,ALEConfiguration.)

Communication DataFigure 6.23

ClickonRoutes,andthescreenshowninFigure6.24appears.

Route Confi gurationFigure 6.24

Enteryourbankarea,“Route1”intheRoutecolumn,andyourclearingpartner(mostlikely“FI”).

ClickonExternalPayments,andthescreenshowninFigure6.25appears.


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External Payment Confi gurationFigure 6.25

Inthisscreen,youconfiguretheclearingaccountandtransactiontypeusedforexternalpayments.Enteryourbankareaandcurrency,checktheTransferindi-cator,andenter theaccountof thecompanywhereyourbankareasits intheClearingAccountcolumn.Enter“EXTPAY”inthelastcolumn.(This isanotherconfigurationthataffectstheIDoc,anditmaybecomerelevantifyouhavetotroubleshoottheIDoc.)

Thenextstepistoconfigurethedefaultsettingsfortransactiontypes.Todothis,usethefollowingmenupath:SAP Customizing Implementation Guide • Finan-cial Supply Chain Management • In-House Cash • Account Management • Pay-ment Processes in In-House Cash • Defi ne Default Setting for Transaction Type.ThisbringsyoutothescreenshowninFigure6.26.

Default Settings for Transaction TypesFigure 6.26


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In this screen,you link theEXTDEB transaction toExternalDebitMemo, theEXTPAYtoExternalTransfer,theINTDEBtoInternalDebitMemo,theINTPAYtoInternalTransfer,andtheEXTPAYtoExpertMode.

Thenextstepistodefinetransactiontypesforautomaticpayments.Todothis,usethefollowingmenupath:SAP Customizing Implementation Guide • Finan-cial Supply Chain Management • In-House Cash • Account Management •

Payment Processes in In-House Cash • Defi ne Transaction Type for Automatic Payments.ThescreenshowninFigure6.27appears.

Determine SAP In-House Cash Transaction TypeFigure 6.27

Onthisscreen,copythesettingsshownherewithyourownbankarea.ThiswilltellthesystemthatforbothcreditsanddebitsitshouldusetheEXTPAYIDoc.

Inthenextstep,wesetuprouteprocessing.Accessthefollowingmenupath:SAP Customizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Account Management • Payment Processes in In-House Cash • Set Up Route Processing.ThescreenshowninFigure6.28appears.

Rules for Route ProcessingFigure 6.28


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Asyouwillrecall,wecreatedRoute1inapreviousstep.NowiswhenwetellthesystemwhatRoute1means.Inthiscase,allyouneedtodoistellthesystemthatyourpayerisalwaysbank999999999(yourownIHCbank)andwhatyourbankareais.

Atthispoint,it’stimetoconfigurethesettingsforpaymentorders.Todothis,accessthefollowingmenupath:SAP Customizing Implementation Guide • Finan-cial Supply Chain Management • In-House Cash • Account Management • Pay-ment Processes in In-House Cash • Outgoing Payment Orders • Set Up Cre-ation of Payment Requests for Inbound IDOC in FI.ThescreenshowninFigure6.29appears.

Clearing Partner Selection ScreenFigure 6.29

Onthisscreen,selectyourclearingpartner (most likelyFI),andthenclickonAccountDetails.ThescreenshowninFigure6.30appears.

Account DetailsFigure 6.30

Onthisscreen,enteryourclearingpartner,andleavetheIndexcolumnblank.IntheSenderTypecolumn,enter“LS”(logicalsystem);inthePartn.No.Column,


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enterthenameofyourSAPserverandtheclientusedbyBasis;intheCtrycol-umn,enteryourcountry;intheBankNumbercolumn,enter“999999999”;andintheAccountNumberfield,entertheSAPIn-HouseCashaccountofyourclear-ingpartner.

ClickonPostingAccounts,andthescreenshowninFigure6.31appears.

Posting AccountsFigure 6.31

Onthisscreen,enteryourclearingpartner,anentryfordebit,andanentryforcredit (intheD/Ccolumn). IntheCocolumn,enter thecompanywhereyourbankareasits.Enteryourcurrency(Crcy)andthegeneralledgeraccountsthatyouwilluseforSAPIn-HouseCashdebitsandSAPIn-HouseCashcredits(G/LAccountcolumn).

ClickonProcessingParameters,andthescreenshowninFigure6.32appears.

Processing Parameters ScreenFigure 6.32


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Onthisscreen,mapyourclearingpartnersandtheSAPIn-HouseCashpaymentmethodsconfiguredpreviously(inFigure6.22)tothepaymentmethodsconfig-uredinthepaymentprogram,andthebankaccountsandaccountIDsusedbythecompanythatissuespayments.

SAP In-House Cash Collections Configuration6.3.6

Thisconfigurationensuresthatwhenyouuploadyourbankstatementreflectingthecashcollected,thesystemfindstheSAPIn-HouseCashaccountthatcorrespondstoeachbankaccountandeachitemintheelectronicbankstatement.Accessthefol-lowingmenupath:SAP Customizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Account Management • Payment Pro-cesses in In-House Cash • Central Cash Receipt/Incoming Bank Statements •

IHC Account Determination from External Bank Account.ThescreenshowninFigure6.33appears.

Dispatcher per Account NumberFigure 6.33

MaptherealroutingnumbersandbankaccountstoyourbankareaandSAPIn-HouseCashaccounts.


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Thenext step is to setup the accountdetermination for incomingpayments.Todothis,accessthefollowingmenupath:SAP Customizing Implementation Guide • Financial Supply Chain Management • In-House Cash • Account Man-agement • Payment Processes in In-House Cash • Central Cash Receipt/Incom-ing Bank Statements • Set Up Account Determination for Incoming Payment.ThescreenshowninFigure6.34appears.

SAP In-House Cash Bank Statement Determine SenderFigure 6.34

Onthisscreen,mapyourhousebanksandaccountIDstoyourbankareaandyourSAPIn-HouseCashaccounts.

Thenextstepistodefinetransactiontypesforincomingpayments.Todothis,accessthefollowingmenupath:SAP Customizing Implementation Guide • Finan-cial Supply Chain Management • In-House Cash • Account Management • Pay-ment Processes in In-House Cash • Central Cash Receipt/Incoming Bank State-ments • Defi ne Transaction Types for Incoming Payment.ThescreenshowninFigure6.35appears.

Onthisscreen,mapyourbankarea,thetransactiontypeyouuseintheelectronicbankstatement(BAI,inthisexample),andtheexternalbankstatementcodestotheSAPIn-HouseCashtransactiontypethatcorrectlyreflectsthenatureofthetransaction.


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Periodic Tasks 6.4

Transaction Types for External Inbound PaymentsFigure 6.35

Periodic Tasks6.4

ThissectionbrieflydescribesseveralperiodictasksthathavetobeperformedforSAPIn-HouseCashtobeinsyncwiththegeneralledger,CashManagement,Trans-actionManager,andsoon.Thefollowingarethemostimportant:

Posting cut offEE Thisprocessendsthetransactionsforaspecificdateandsetsthedateofthenext transaction day in the system. This is particularly important regardingreportingandaccountingbecause,inmanyinstances,interestsandfeesarecal-culatedbasedonthebalancesandtransactionsthatoccuronacertainday.

Balancing accountsEE If you configured conditions for interest and fees, these are calculated andpostedduringthebalancingprocess.

Generating SAP In-House Cash bank statementsEE Thisprocessconsistsofcreatingstatementsforindividualsubsidiaryaccounts.Whenyourunit,thesystemcreatesanIDocthatisthenimportedintoeachsubsidiary, and automatically updates the general ledger of the subsidiaries


230


withthecorrectSAPIn-HouseCashaccounttransactionsandbalances.Forthistohappen,configurationfortheelectronicbankstatementhastobedoneforthebank,inadditiontotheconfigurationalreadyinplaceforrealexternalbankstatements.

General Ledger integration EE

TheSAPIn-HouseCashstatementsupdatethetransactionsandbalancesinthegeneralledgerofthesubsidiaries,butthegeneralledgertransferupdatesthetransactionsandbalancesinthegeneralledgerofthecompanycodethathoststheSAPIn-HouseCashcenter.Thisissimilartobanks,whereyouhaveyouraccountingofthebankinyourbooks,andthebankhasitsownaccountingofyourbalanceandtransactions.

Reporting6.5

ThissectionbrieflydescribesthemainreportsavailableinSAPIn-HouseCash.Toaccessthesereports,gototheapplicationmenuandaccess:Accounting • Finan-cial Supply Chain Management • In-House Cash • Information System.

Condition historiesEE Ifyouconfiguredconditionsforinterestandfeecalculation,theauditorswillwanttoverifytheintegrityofthemasterdata.Thisreportshowsyouallofthechangesdonetothemasterdata.

Balance listEE ThisgivesyouanoverviewofthebalancesinallyourbankareasandSAPIn-HouseCashaccounts.

Balance List by key date EE

Thisreportshowsyouanoverviewofthebalancesbutalsoallowsyoutofilterbykeydatetoreviewthespecificsofacertainperiodoftime.

Overdraft listEE Thisgivesyoualistofthoseaccountsforwhichthelimithasbeenexceeded.


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Examples of SAP In-House Cash in Action 6.6

Display account locksEE Thisshowsyoulockedandinactiveaccounts.

Interest scale EE

Thisreportdisplaystheinterestscalesusedforacertaincombinationofbankarea, account number, product, business partner category, and calculationperiod.

Limit overviewEE Thisreportdisplaystheinternalandexternallimitsoftheselectedaccounts.

Display individual conditionsEE With this report,youcanseewhichconditionsare stillvalidandwhichareexpired.

Examples of SAP In-House Cash in Action6.6

Inthissection,weexploreanexamplethatshowshowalargecorporationusesSAPIn-HouseCash,whichwillhelpyoubetterunderstandthetypicaluseofthefunctionality.Thisparticularcompany(namesandactualaccountnumbersarechangedtoprotectconfidentialinformation)concentratesthecashofallitssub-sidiariesintoacentralaccountandthenallowssubsidiariestoinvestorborrowmoneyfromit.Vendorinvoicesareapprovedforpaymentatthesubsidiarylevel,buttheSharedServicesCenterprocessesthepayments,nettingasmanypaymentsaspossibleintoonepayment(asduedateandotherrestrictionsallow).

Figure6.36showsoneoftheavailablereports,whichdisplaysalloftheaccountsassociatedwithabankarea,aswellasthebalanceandlimitofeach.NotethattheSAPIn-HouseCashcenterbalanceiszero;thisisusuallythecasebecausetheSAPIn-HouseCashcenteractsasaSharedServicesCenterthatprocessestransactionsbuthasnobusinessofitsown,otherthansupportingtheoperationalcompanies.Therefore,allofthemoneyheldbytheSAPIn-HouseCashbankisreallyownedbydifferentsubsidiaries.


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SAP In-House Cash Balances at the Beginning of the DayFigure 6.36

Figure6.37showsthescreenwhereyoumanuallychangethenextpostingdate.Afteryoudothis,everytransactioninthesystemhasthenewpostingdate.Youcancreateabatchjobtorunthistransaction.

Posting CutoffFigure 6.37

Figure6.38showsaninvoicefor$1,000,000USDbeingenteredforCompanyA.Thewaytheprocessworks,thepaymentprogram(TransactionF110)isexecutedtopaytheinvoiceatthesubsidiarylevel,butinsteadofcuttingacheckorissuinganelectronicpayment,thesystemcreatesanIDocthatcontainsanSAPIn-HouseCashpaymentorder.


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Enter Vendor Invoice for Company AFigure 6.38

Figure6.39showsanotherinvoicefor$500,000USDbeingprocessedforCom-panyF.Aswiththepreviousexample,thepaymentprocessbeginsbyrunningthepaymentprogramatthesubsidiarylevel,whichtriggersanIDocwithanSAPIn-HouseCashpaymentorder.

Enter Vendor Invoice for Company FFigure 6.39


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ThepaymentorderscreatedbytheIDocsjustmentionedareshowninFigure6.40.Alsoonthisscreen,youcandrilldown,sort,addtotalsandsubtotals,and—mostimportantly—approvethepaymentorder.

Browser for IHC Payment OrdersFigure 6.40

Whenyouapprovetheorder,severalthingshappen:

AnIDocEE withapaymentrequestiscreated.

TheSAPIn-HouseCashaccountEE balanceforthesubsidiarywherethevendorpaymentwasoriginateddecreases.

TheSAPIn-HouseCashaccountbalanceforthesubsidiaryEE wheretheSAPIn-House Cash center sits (either headquarters or the Shared Services Center)increases.

Inasubsequentstep,youcanpaythatpaymentrequestusingapaymentprogramforpaymentrequests(TransactionF111).Oneoftheadvantagesofthisprocess


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istheabilitytonetmultiplepaymentrequests(i.e.,whenthesamevendorsendsinvoicestomultiplesubsidiaries)intoasinglewireorcheck,savingonwirefeesandmakingthepaymentprocesseasier.

Figure6.41showshowtheSAPIn-HouseCashbalanceofCompanyAwasreducedby$1,000,000USD,andthebalanceforCompanyFwasreducedby$500,000USD, while the balance for the SAP In-House Cash center was increased by$1,500,000USD.Asweexplainedpreviously,wheneverthebalanceintheSAPIn-HouseCashcenterincreases,itshouldbetemporary;thebalanceshouldusuallybe$0.Inthisexample,thebalancewillbe$0againwhenthepaymentrequestsarepaidtotheexternalvendors.

SAP In-House Cash Balances after Payment OrdersFigure 6.41

Figure6.42showsaninternaltransferfromCompanyAtotheSAPIn-HouseCashcenter.Thiscanbedonetoinvestmoney,toprocessanadjustment,andsoon.

Figure6.43showstheSAPIn-HouseCashbalanceincreasedforthe$2,000,000USDthatweretransferredtoit,andCompanyA’sbalancedecreasedbythesameamount.


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Internal TransferFigure 6.42

SAP In-House Cash Balances after Internal TransferFigure 6.43


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Figure6.44showsaninternalpaymentorderreversing$1,500,000USDofthe$2,000,000;thiscouldbeduetoamistakeintheoriginalamount,orsomeotheradjustmentbeingprocessed.

Reversal for Part of the Payment OrderFigure 6.44

Figure6.45showstheupdatedbalancesoftheSAPIn-HouseCashcenterdownby$1,500,000USD,andCompanyAupbythesameamount.

Figure6.46showstheparameterentryscreenforthepaymentprogramforpay-ment requests (TransactionF111); this isdifferent fromthepaymentprogramforvendors(TransactionF110)becauseit’sspecificallydesignedtobeusedbytreasurydepartmentprocesses.Thispaymentprogramwouldbeusedtosendthe


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$2,000,000USDthatsitintheSAPIn-HouseCashcentertoavendorortoabro-keragefirmforinvestment.

SAP In-House Cash Balances after Reversal for $1,500,000 USDFigure 6.45

Payment Program for Payment RequestsFigure 6.46

Finally,Figure6.47showsthebalancesattheendoftheday.TheSAPIn-HouseCashcenterbalanceisagain$0,andtheindividualbalancesareupdatedwiththeamountthataccuratelyreflectstheirtransactionsduringtheday.


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Summary 6.7

SAP In-House Cash Balances at the End of the DayFigure 6.47

Summary6.7

Inthischapter,wereviewedtheSAPIn-HouseCashfunctionality,startingwithanoverviewofwhatitisandhowitworks,andthencontinuedwithanexplanationofthecriteriayoushouldusetodecidewhenitisagoodideatoimplementit.Wealsoexplainedthemainbusinessscenarioscoveredbythefunctionalityandprovidedbusinessprocessdiagramsforthem.

Wethenprovidedanexplanationofthemasterdataassociatedwiththefunction-ality,aswellastheconfigurationrequiredforbanking,ALE,andtheSAPIn-HouseCashfunctionality.Toconcludethechapter,weexplainedthemainperiodicpro-cessesandreports,andprovidedanexampleofthefunctionalitybeingused.

AlthoughtherearemanyareasofSAPIn-HouseCashthatcannotbecoveredinasinglechapter,weexpectthattheinformationcontainedherewillallowusers,consultants,andprojectmanagerstoresolvesomeoftheirquestionsandmakethecorrectdecisionsaboutthisimportantfunctionality.Inthenextchapter,wereviewtheuseandconfigurationoftheLiquidityPlannerfunctionality.


357

A

ABAP,97Accountdetermination,228AccountID,68,69,103,209,249Accountlock,231Accounts,208Accountspayable,252AccountsPayable,35,95,201,206Accountsreceivable,66Accuity,46ACH,43,87,91,112,132,153,160,174Actualcashflow,241AIG,24ALE,107,211,212,239,350

configuration, 211functionality, 43partner, 213

AllianceLite,163AmericanBankersAssociation,34AmericanRecoveryandReinvestmentActof2009,28Analysisofactualcashflows,338Annuitypayments,298Approvepayments,166Archivingcategory,332ArchivingCategoryfield,318ASAPmethodology,340Assignmentprogram,273Automatedclearinghouse,91

B

BAI,52,59,64,71,82,228BAI2,52,64,82Balancelist,230Balancingaccounts,229

Bank,45,87Bankaccounting,44Bankaccounts,116,227BankAccountsoption,68BankALEpartner,209Bankarea,209,218,228,301BankAreacolumn,220Bankdetails,142BankforInternationalSettlements,33Bankgroup,131Bankkey,71BankKeyfield,104Bankmasterdata,46,67,209BankNumbercolumn,226Bankreconciliation,46,49Bankrelationshipmanagement,20BankSecrecyAct,28Bankstatement,49,201,204,227,244,246BankStatementMonitor,159,168,177,184,188,305BAPIs,350Baselinedate,296BasicTypefield,214BatchandPaymentMonitor,159,189,194,197Batchinput,56BCM,94,97Bestinclass,25BICDirectory,46Bigbangmethod,343BIS,33Bond,298Borrowings,307BPS,247Brazil,24Businessblueprint,341BusinessFrameworkArchitecture,351Businesspartners,44,45,122,208

Index


358

Index

C

CashAccounting,241,242,243,253,286CashandLiquidityManagement,41Cashbalances,38,46Cashcenterbalance,238Cashconcentration,38,87,154,200,306Cashedchecksfiles,63,82,91Cashmanagement,20,41,141CashManagement,160,229,286,289Cashmanagementapplications,38Cashmanagementgroup,294,301Cashpooling,207Cashposition,46,49,169,291,308,337Cashpositionandliquidityforecastreport,290Cashpositionreport,306Cashtransfers,25CEMLA,34CentralBank,34Centralcollection,203Centralized,38,200Centralpayment,203CentrodeEstudiosMonetariosLatinoamericanos,34Check,52,87,88Checklot,128Checkregister,90China,24ClearingAccountcolumn,223Clearingdocument,261Clearingpartner,217,218,221CommitteeonPaymentandSettlementSystems,34Communicationsmethod,88Companycode,256Conditionhistories,230Conditions,208,231Consolidatorbank,160Controlfigures,40

Copydata,246Counterparty,219CPSS,34CraigJeffery,37Creatememorecord,305Creditdefaultswaps,24CreditRiskAnalyzer,42CTX,92,174Currencyexchangeratefluctuations,25

D

DataMediumExchangebutton,114Decentralized,38Deleteabankstatement,57DepartmentoftheTreasury,28,91Differencestatus,170,187,188Digitalsignatures,167,183,197Directconnection,161,163DME,114,175

E

ECB,34EDI,20,36,43,160EDIPartnerProfilesbutton,105EFT,313Electronicbanking,337Electronicbankstatement,68,228,305,307Electronicbankstatements,160Electronicfundstransfer,91End-of-dayprocesses,206EnhancementPack,353EPC,26ERP,30ETL,59Euro,26,34Europe,26EuropeanCentralBank,34EuropeanPaymentsCouncil,26


359

Index

ExternalDebitMemo,224Externaltransactiontypes,78ExternalTransfer,224

F

FASB133,38FederalReserve,52Fedwire,95,98,99,175FIdocument,258Finalpreparation,341FinancialAccountingdocuments,273Financialcrisis,19Foreclosures,24Foreignexchangerates,25Foreignexchangetransaction,307Formulas,246FundsManagementDivision,91

G

GAAP,27Generalledger,66,72,204,229,300

accounts, 48, 49Globaldata,254Globalliquiditycrisis,23Globaltreasury,36Go-liveandsupport,342Greece,24

H

Headquarters,200,205Highcostsonbankingfees,207Housebank,69,103,116,209,249

I

IAS39,38IAT,93

IBAN,134IDoc,43,97,108,203,206,232,234IFRS,20,27Inboundprocesses,45Incomingactivity,50Incomingpayment,228India,24Indirectconnection,163InfoProvider,276In-HouseBanking,199,338Integrated,40IntegratedPlanning,247,277Intercompanyaccount,201Intercompanycashtransfer,199Intercompanypayment,203Interest,298Interestrevenue,203Interface,40InternalDebitMemo,224InternalTransfer,224Internationalbanking,33Intradaybankstatement,57Intradayelectronicbankstatement,305Investment,307Investmentservice,199Invoice,261Invoiceverification,89

K

Keyexecutives,25

L

Lessonslearned,340Leveragedbuyouts,23Limitoverview,231Limits,208Liquidityforecast,21,291,305,308,338Liquidityitem,244,267


360

Index

Liquidityitemassignmentprograms,249LiquidityPlanner,41,241,276,303,304,308LiquidityPlanningandReporting,243,246,286Loan,298Loanservices,199Lockbox,52,64,65,82Logistics,291Long-termcashforecasting,241

M

Manualbankstatement,62MarketRiskAnalyzer,42Mask,72Memorecord,314,332MergeID,175Mergepayments,165Messages,163Messagetype,110,213Mexico,29MT103,98,99MultiCash,58,59mySAP,160

N

NACHA,91,174Nettingservices,199Notetopayee,245

O

OFAC,93OfficeofForeignAssetsControl,93Order-to-cash,289Outbound,45Outgoingactivity,50Overdraftlist,230

P

Payable,35Payee,36Payer,35,219PAYEXT,108Payingcompanycode,118Paymentadvices,155Paymentdocuments,190Paymentgrouping,171Paymentmedia,35,162,174.192,195,197PaymentMediaWorkbench,174Paymentmethod,35,221,227Paymentorder, 203,232,233,237Paymentprogram,153,190,227,232Paymentprogramconfiguration,117,130Paymentrequest,333PaymentRunbutton,189Payments,25,307Paymentsystem,33Paymentterms,296PEXR2002,108Phasedrollout,343Planningfunction,248Planninggroups,293Planninglevel,322Planningtype,332PortfolioAnalyzer,42Positivepay,88,151Postingcutoff,229Postingrules,78Postprocess,67PPD,92Principalpayments,298Printingprogram,127Privateequityfirms,23Processchain,276Processingstatus,170,187Procure-to-pay,289,294Productdefinition,208Producttypes,216,299


361

Index

Projectpreparation,341PublicCompanyAccountingOversightBoard,30Purchaseorder,305Purchaserequisition,295

Q

Query,249Querysequence,244,250,257

R

Realestatebubble,24Realization,341Reconciledcash,50Reconciliationstatus,170,187ReconNet,47Redemptions,307Regulatedindustry,207Releasestrategies,178,179Repaymenttype,298Returnoninvestment,206Revaluatedata,246Riskmanagementsystem,38Role-basedsecurity,44Rollout,340Routes,222Routingnumbers,227Russia,24

S

SalesandDistribution,290,292Salesinvoice,305Salesorder,305Same-daycashposition,241SAPBankCommunicationManagement,42,94,101,153,159,162,166,175,189,305

SAPBusinessObjectsgovernance,risk,andcompliancesolutions,30SAPBusinessObjectsPlanningandConsolidation,241,247SAPFSCM,349SAPIn-HouseCash,42,199,200,214,300,333SAPIn-HouseCashaccounts,219,227,234SAPIn-HouseCashbankstatement,229SAPIn-HouseCashcenter,210SAPIntegrationPackageforSWIFT,159SAPNetWeaverBW,243,246,275,307SAPNetWeaverPI,162SAPNetWeaverProcessIntegration,162,350,352SAPscript,122SAPSRM,89SAPSupplierRelationshipManagement(SAPSRM),89Sarbanes-OxleyAct,30Scopingandplanning,346Searchstring,80Secondpresentment,52Secude,184SEM-BPS,277SEM-BusinessPlanningandSimulation,247SEPA,26,134SEPACreditTransferSchema,26SEPADirectDebit(SDD),26Serialnumberstatus,170,187Servicebureau,163SettlementAccounts,219SharedServices,200,214,343SharedServicesCenter,214Short-termplanning,289SingleEuroCashArea(SECA),27SingleEuroPaymentArea,26SocietyforWorldwideInterbankFinancialTelecommunications,35,98Sourcesymbol,321SOX,30


362

Index

Eric Bauer, Jörg Siebert

The SAP General Ledger

This book gives you complete overview of the SAP General Ledger, including all of the new features like Document Splitting, Profit Center Accounting, parallel accounting, and Balanced Scorecard. It also includesa complete chapter on the SAP General Ledger’s role in reporting for IFRS, including parallel valuation. A must-have for all finance professionals who have migrated or are migrating to the SAP General Ledger, this book is a resource that can be used in both daily work and atthe implementation level.

approx. 505 pp., 2. edition, 79,95 Euro / US$ 79.95

ISBN 978-1-59229-350-6, Aug 2010

>> www.sap-press.com

Provides guidance for design, customization, and implementation of

SAP General Ledger

Includes details on new ledger definitions,Document Splitting, Profit Center Accounting, and parallel accounting

Features a complete chapter on parallel valuation for IFRS reporting

www.sap-press.com

Standalone,40Statusmessages,176Stimuluspackage,28StrategicTreasurer,37Subledger,66Subsidiary,201,205,219,221,234SWIFT,20,35,98,114,134,161,175,354SWIFTMT940,58SWIFTNet,36,43,161,164Symbols,72

T

Three-waymatch,89Tokensecurity,167TransactionManager,42,305,313Transactiontypes,71,228Treasurydepartment,40Treasuryprocesses,33Treasurytechnologyplatforms,37Treasuryworkstations,38,337TreatyofRome,26Trintech,47

U

Updatetype,300

V

Valueaddednetwork,160Vendorinvoice,305Virtualbank,210Virtualcash,205

W

Wire,43,87,91,160,305Wirestransfer,94,112,153,160Workflow,167,182

Z

ZBA,102Zerobalanceaccount,102
