SAP® applications in the domain of payment transactions
In the course of these concentration processes, the complexity of payment interrelations is increasing strongly both within corporate groups as well as in financial transactions between such groups and external business partners. The particular design of your corporate payment transaction structure is thus increasingly important: on one side, the number of payments is increasing rapidly, in particular cross-border payments involving currency translation. On the other side there's the need to adapt payment transactions to changing corporate structures. Finally, payment transactions by globally operating corporations put additional requirements on currency management, disposition of bank accounts and bank strategy, also in view of the banking, debt and euro crisis.
The development of SAP® In-House Cash (IHC) and the SAP® Bank Communication Management (BCM) is a reaction to this trend. These modules enable you to efficiently organize and process your corporate payment transactions through your own virtual bank ? the In-House Cash Center. Each one of your corporate affiliates is assigned at least one current account at the In-House Cash Center (IHC-account), which the company with the help of SAP® standard functions (F110 payment run and electronic bank statement) may use like an external bank account.
Focus here is on self-initiated payment transactions. This above all includes bank transfer and collection of debit notes. However, personnel payments and payments from financial transactions may also be processed through IHC accounts. All payments are pooled in the In-House Cash Center and are processed for the affiliated companies. The used payment formats must be defined only in one system. The variety of used payment formats may be reduced by replacing country-specific payment formats with internationally supported formats (SEPA, CGI, SWIFT, and MT). The interfaces to external banks are established by way of effective tools such as SAP® BCM. Compliance with legal regulations and in-house standards (compliance) is assured by using secure communication channels and release procedures. The described set-up is also termed payment factory. A payment factory may be operated in context with a Shared Service Center; it may also encompass additional services such as centralized issuance of payment advices or cash management.
The payment factory concept also enables centralized account statement processing. The bank statements of all affiliated companies are retrieved from the external banks and are forwarded to the particular affiliated companies as appropriate. Here, too, the bank statements may undergo further processing. Externally initiated payments to external accounts may be processed through internal IHC accounts (centralized payment receipt). This is appropriate particularly for transactions in context with cash pooling. In addition, external bank statements may be standardized in terms of content (semantically) and form (syntactically), which allows standardization of further processing in the accounting areas of the affiliated companies.
In addition to handling payments between affiliated companies and external third companies (external payment), you may also process payments between affiliated companies through IHC (internal payment). In an ideal application, all accounts receivable and liabilities between your affiliated companies are pooled in IHC accounts and earn interest. There is no longer any need for costly netting processes and bank transactions; consolidation is simplified. This is also referred to as in-house bank.
Extensive integration of SAP® Treasury and Risk Management (TRM) and SAP® Cash Management (CM) also allows compliance with complex requirements on foreign-currency management and disposition of bank accounts.
Application of the described concepts bears significant saving potentials for your company. Based upon our many years of experience in corporate group payment transactions, we can help you to fully exploit this potential.
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