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Business Network Integration In-House Cash SAP Best Practices Cross-Industry Package SAP Best Practices.

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Presentation on theme: "Business Network Integration In-House Cash SAP Best Practices Cross-Industry Package SAP Best Practices."— Presentation transcript:

1 Business Network Integration In-House Cash SAP Best Practices Cross-Industry Package SAP Best Practices

2 Purpose This scenario describes how to set up in-house cash (IHC) within corporate groups and subsidiaries. Automated intra-group payments between headquarters (in-house-cash center) and subsidiaries are made. Subsidiary 2 must deliver goods to subsidiary 1 for internal payments to be possible. For external outgoing payments: subsidiaries pay the vendor invoices to the headquarters and the headquarters creates a payment medium for the house bank. Subsidiaries create payments by check for vendors. This is a separate payment method, defined in vendor master or in the purchase invoice. The headquarters prints the check for the vendor. When there is a wrong internal payment between the subsidiaries, the headquarters will reverse the payment and the subsidiaries will receive a reversed payment. When the headquarters receives an outgoing payment from the house bank, it will reverse the payment and send a reversed payment to the subsidiary. Purpose and Benefits: Scenario Overview – 1

3 Purpose Payments from subsidiaries customers. The headquarters receives the payments from the house bank and creates bank statements for the subsidiaries. Cash pooling: balancing the bank accounts from the subsidiaries bank accounts. – the headquarters receives the cash pool payments from the house bank and balances the accounts. When the balance is negative, the IHC transfers money to the subsidiary account, otherwise it will take money to invest in the IHC. Outgoing payments for foreign currency to another clearing center, for example, payments with currency Yen. The other clearing center is a company affiliated with the headquarters. Interest calculation between IHC and subsidiaries. At the end of the month the IHC calculates all receivable and payable payments between the IHC and the subsidiaries. This results in the subsidiaries receiving debit interest or credit interest bank statements from the headquarters. Purpose and Benefits: Scenario Overview – 1

4 Purpose and Benefits: Scenario Overview – 2 Benefits Optimized cash resources Fewer external bank accounts needed Reduced costs for cross-country payments Greater flexibility in the execution of payment netting transactions Key process flows covered – Internal Payments Create payment orders at the subsidiaries for the headquarters Create bank statements at the headquarters for the subsidiaries Subsidiary 2 receives the bank statement for incoming payments Subsidiary 1 receives the bank statement for outgoing payments Subsidiaries post the internal payments

5 SAP Applications Required: Key process flows covered – External Outgoing Payments Create payment orders at the subsidiaries for the headquarters Create bank statements at the headquarters for the subsidiaries Create a payment medium at the headquarters for a house bank Subsidiaries receive the bank statement for outgoing payments Subsidiaries post the bank statements Key process flows covered – External Outgoing Payments by Check Create payment orders at the subsidiaries for the headquarters Create bank statements at the headquarters for the subsidiaries Print the Checks at the headquarters for vendors Subsidiaries receive the bank statement for payments by check Subsidiaries post the bank statements Scenario Overview – 3

6 SAP Applications Required: Key process flows covered – Internal Returns Reverse payment order at the headquarters Create bank statements at headquarters for the subsidiaries Subsidiaries receive the bank statements from reversed payments Subsidiaries post the reversed bank statements Key process flows covered – External Returns Headquarters receives back an outgoing payment from the house bank Headquarters reverses the document from a back payment request Headquarters reverses payment orders from the subsidiaries Create bank statements at the headquarters for the subsidiaries Subsidiaries receive the bank statement from reversed payments Subsidiaries post the reversed bank statement Scenario Overview – 4

7 SAP Applications Required: Key process flows covered – Incoming payments Headquarters receives customer payments from the house bank Create bank statements at the headquarters for the subsidiaries Subsidiaries receive the bank statements from incoming payments Subsidiaries post the incoming bank statements Key process flows covered – Cash Pooling Headquarters receives cash pool payments from the house bank Headquarters posts the incoming cash pool payment Create bank statements at the headquarters for the subsidiaries Subsidiaries receive the bank statements from cash pool payments Subsidiaries post the bank statements Scenario Overview – 5

8 SAP Applications Required: Key process flows covered – additional Clearing Center Subsidiaries create payments using a foreign currency Create bank statements at the headquarters for the subsidiaries Create a payment medium –IDoc- at the headquarters for the clearing center Headquarters posts the payments Subsidiaries receive the bank statement for outgoing payments Subsidiaries post the bank statement for outgoing payments Scenario Overview – 6

9 Process Description in Detail: Internal Payments Subsidiary 1 receives and posts a billing document from subsidiary 2 Subsidiary 1 pays an invoice to subsidiary 2 Subsidiary 1 creates and sends a payment order to the headquarters (IHC) The headquarters posts the payments – bank accounts The headquarters creates bank statements for subsidiaries 1 and 2 The subsidiaries post the bank statements Scenario Overview – 7 IHC = In-House Cash Center Payment Order Bank Statements 1 3 2 Delivery / Billing Bank Statements 3 Subsidiary 1Subsidiary 2 Headquarters

10 Process Description in Detail: Receive Delivery or Invoice Post vendor invoice Pay Vendor Invoice Create and send payment order (PAYEXT) Posting: Creditor -> clearing account IHC Receive outgoing payments / bank statements Posting: clearing account IHC – account IHC Receive Payment Order Post accounts (subsidiary 1 / subsidiary 2) Create and send bank statements (FINSTA) Post accounts (subsidiary 1 / subsidiary 2) Subsidiary 1Subsidiary 2Headquarters Delivery and Invoice Post customer invoice Receive incoming payments / bank statements Posting: account IHC – customer account Internal Payments Scenario Overview – 8

11 Process Description in Detail: External Outgoing Payments Subsidiaries receive and post billing documents from a vendor Subsidiaries pay the vendor invoice to the headquarters (IHC) Subsidiaries create and send a payment order to the headquarters (IHC) The headquarters posts the payments – bank account The headquarters creates bank statements for the subsidiaries The headquarters creates a payment medium for the house bank The subsidiaries post the bank statements Scenario Overview – 9 IHC = In-House Cash Center Payment Order Bank Statements 1 3 2 Delivery / Billing Subsidiary Headquarters House Bank Payment Medium Vendor

12 Process Description in Detail: Receive Delivery and Invoice Post vendor invoice Pay Vendor Invoice Create and send payment order (PAYEXT) Posting: Creditor -> clearing account IHC Receive outgoing payments / bank statements Posting: clearing account IHC – account IHC Receive Payment Order Posting: bank accounts subsidiaries Create and send bank statements (FINSTA) Create and send bank medium for house bank SubsidiaryVendorHeadquarters Delivery and Invoice Receives payments from the house bank External Outgoing Payments Scenario Overview – 10

13 Process Description in Detail: External Outgoing Payments by Check Subsidiaries receive and post the billing document from a vendor with the payment method check Subsidiaries pay the vendor invoice to the headquarters (IHC) Subsidiaries create and send a payment order to the headquarters (IHC) The headquarters posts the payments – bank account The headquarters creates bank statements for the subsidiaries The headquarters creates/prints checks for the vendor The subsidiaries post the bank statements Scenario Overview – 11 IHC = In-House Cash Center Payment Order Bank Statements 1 3 2 Delivery / Billing Subsidiary Headquarters Checks Vendor 4

14 Process Description in Detail: Receive Delivery and Invoice Post vendor invoice Pay Vendor Invoice Create and send payment order (PAYEXT) Posting: Creditor -> clearing account IHC Receive bank statements Post bank statements Posting: clearing account IHC -> account IHC Receive Payment Order Posting: bank accounts subsidiaries Create and send bank statements (FINSTA) Create and send check for vendor SubsidiaryVendorHeadquarters Delivery and Invoice Receive check from Headquarters External Outgoing Payments by Checks Scenario Overview – 12

15 Process Description in Detail: Internal Returns Reverse payment order at the headquarters The headquarters creates and sends bank statements for the subsidiaries The subsidiaries receive bank statements from the reversed payments The subsidiaries post the reversed bank statements Scenario Overview – 13 Bank Statements 1 1 Subsidiary 1Subsidiary 2 Headquarters

16 Process Description in Detail: Receive reversed bank statements Post reversed bank statements (Account reversal) Reverse Payment Order Posting: account subsidiaries Create and send bank statements (FINSTA) Subsidiary 1Subsidiary 2Headquarters Receive reversed bank statements Post reversed bank statements (Account reversal) Internal Returns Scenario Overview – 14

17 Process Description in Detail: External Returns The headquarters receives payments from the house bank The headquarters reverses the payment request The headquarters reverses the payment order The headquarters creates bank statements for the subsidiary The subsidiary receives bank statements from the reversed payments The subsidiary posts the reversed bank statements Scenario Overview – 15 IHC = In-House Cash Center Bank Statements 2 Subsidiary Headquarters House Bank Payment back 1

18 Process Description in Detail: Receive reversed bank statements Post reversed bank statements (Account reversal) Receive payment back from house bank Reverse payment request Reverse payment order Create and send bank statements (FINSTA) SubsidiaryHouse BankHeadquarters Send payment back to Headquarters External Returns Scenario Overview – 16

19 Process Description in Detail: Incoming Payments The headquarters receives, from a subsidiary, customer payments from the house bank The headquarters creates bank statements for the subsidiaries The headquarters posts the payments The subsidiaries receive bank statements from the headquarters The subsidiaries post the bank statements Scenario Overview – 17 IHC = In-House Cash Center Bank Statements 1 2 Payments Subsidiary Headquarters House Bank Payment Medium Customer from subsidiary 3

20 Process Description in Detail: Receive bank statements from the headquarters Post bank statements Receive customer payments from the House Bank Create and send bank statements (FINSTA) Post incoming payments from the house bank SubsidiaryHeadquarters Incoming Payments Scenario Overview – 18 House Bank Send customer payments to Headquarters

21 Process Description in Detail: Cash Pooling The headquarters receives cash pool payments from the house bank The headquarters creates bank statements for the subsidiaries The headquarters posts the payments The subsidiaries receive bank statements from the headquarters The subsidiaries post bank statements – balance the bank accounts Scenario Overview – 19 IHC = In-House Cash Center Bank Statements 1 2 Subsidiary Headquarters House Bank Payment Medium

22 Process Description in Detail: Receive bank statements from the headquarters Post bank statements (Balance bank accounts) Receive cash pool payments from the house bank Create and send bank statements (FINSTA) Post cash pool payments from the house bank SubsidiaryHeadquarters Cash Pooling Scenario Overview – 20 House Bank Send cash pool payments to Headquarters (IHC)

23 Process Description in Detail: Additional Clearing Center Scenario Overview – 21 IHC = In-House Cash Center Payment request 1 2 Subsidiary Headquarters Additional clearing center Payment Medium The subsidiaries pay the vendor invoice with the foreign currency to the headquarters The subsidiaries create and send a payment order to the headquarters The headquarters creates bank statements for the subsidiaries The headquarters creates a payment medium for the clearing center The headquarters posts the payments The subsidiaries post the bank statements Bank statements 3

24 Process Description in Detail: Receive payment request from Headquarters Create bank statements (FINSTA) Create and send payment request to clearing center Send bank statements to subsidiary Post bank statements Subsidiary Headquarters Additional Clearing Center Scenario Overview – 22 Clearing Center Pay vendor invoice with foreign currency Create and send payment order (PAYEXT) Receive bank statements Post bank statements Subsidiary

25 Sales Administration (S2) Create and send billing document to subsidiary_1 Buyer (S1) Receive billing document Accountant Receivable (S2) Post invoice - debtor Accountant Payable (S1) Post invoice creditor Pay invoice. Create and send payment order Accountant Headquarters Receive outgoing payment / bank statements Receive incoming payments / bank statements Receive payment order Create and send bank statements Post bank statements Post payment order account (subsidiary_2 – subsidiary_1 Post: Creditor – clearing account IHC Process Flow Diagram In-House Cash (Internal Payments) End-of-day processing Post in finance account

26 Buyer (S1) Receive billing document from vendor Accountant Payable (S1) Post invoice creditor Pay invoice. Create and send payment order Accountant Headquarters Receive outgoing payment / bank statements Receive payment order Create and send bank Statements End-of-day processing Post in finance account Post bank statements Create payment request Post: Creditor – clearing account IHC Process Flow Diagram In-House Cash (External Outgoing Payments) Create payment medium for house bank Post payment order (account subsidiary)

27 Accountant Headquarters Reverse payment order Create and send bank statements End-of-day processing Post in finance account Process Flow Diagram In-House Cash (Internal Returns) Receive and post bank statements Accountant Payable (S2) Accountant Receivable (S1) Receive and post bank statements Post payment order (account subsidiary) Post bank statements (account reversal) Post bank statement (account reversal)

28 Accountant Headquarters Reverse payment order Create and send bank Statements End-of-day processing Post in finance account Process Flow Diagram In-House Cash (External Returns) Post Bank Statements Accountant Payable (S1) Reverse Payment Request Post bank statement (account reversal) Post payment order (account subsidiary)

29 Accountant Headquarters Receive customer payments from house bank Create and send bank statements End-of-day processing Post in finance account Process Flow Diagram In-House Cash (Incoming Payments) Post bank statements Accountant Recipient (S1) Post incoming payments

30 Accountant Headquarters Receive cash pool payments from house bank Create and send bank statements End-of-day processing Post in finance account Process Flow Diagram In-House Cash (Cash Pooling) Post bank statements Accountant Recipient (S1) Post cash pool payments

31 Accountant Clearing Center Receive payment request Accountant Payable (S1) Post invoice creditor Pay invoice. Create and send payment order Accountant Headquarters Receive outgoing payment / bank statements Receive payment order Create and send bank Statements End-of-day processing Post in finance account Post bank statement Create payment request Process Flow Diagram In-House Cash (Additional Clearing Center) Post payments Post payment order (account subsidiary)

32 Legend SymbolDescriptionUsage Comments Band: Identifies a user role, such as Accounts Payable Clerk or Sales Representative. This band can also identify an organization unit or group, rather than a specific role. The other process flow symbols in this table go into these rows. You have as many rows as required to cover all of the roles in the scenario. Role band contains tasks common to that role. External Events: Contains events that start or end the scenario, or influence the course of events in the scenario. Flow line (solid): Line indicates the normal sequence of steps and direction of flow in the scenario. Flow line (dashed): Line indicates flow to infrequently- used or conditional tasks in a scenario. Line can also lead to documents involved in the process flow. Connects two tasks in a scenario process or a non-step event Business Activity / Event: Identifies an action that either leads into or out of the scenario, or an outside Process that happens during the scenario Does not correspond to a task step in the document Unit Process: Identifies a task that is covered in a step-by-step manner in the scenario Corresponds to a task step in the document Process Reference: If the scenario references another scenario in total, put the scenario number and name here. Corresponds to a task step in the document Sub-Process Reference: If the scenario references another scenario in part, put the scenario number, name, and the step numbers from that scenario here Corresponds to a task step in the document Process Decision: Identifies a decision / branching point, signifying a choice to be made by the end user. Lines represent different choices emerging from different parts of the diamond. Does not usually correspond to a task step in the document; Reflects a choice to be made after step execution SymbolDescriptionUsage Comments To next / From last Diagram: Leads to the next / previous page of the Diagram Flow chart continues on the next / previous page Hardcopy / Document: Identifies a printed document, report, or form Does not correspond to a task step in a document; instead, it is used to reflect a document generated by a task step; this shape does not have any outgoing flow lines Financial Actuals: Indicates a financial posting document Does not correspond to a task step in a document; instead, it is used to reflect a document generated by a task step; this shape does not have any outgoing flow lines Budget Planning: Indicates a budget planning document Does not correspond to a task step in a document; instead, it is used to reflect a document generated by a task step; this shape does not have any outgoing flow lines Manual Process: Covers a task that is manually done Does not generally correspond to a task step in a document; instead, it is used to reflect a task that is manually performed, such as unloading a truck in the warehouse, which affects the process flow. Existing Version / Data: This block covers data that feeds in from an external process Does not generally correspond to a task step in a document; instead, this shape reflects data coming from an external source; this step does not have any incoming flow lines System Pass / Fail Decision: This block covers an automatic decision made by the software Does not generally correspond to a task step in the document; instead it is used to reflect an automatic decision by the system that is made after a step has been executed. External to SAP Business Activity / Event Unit Process Process Reference Sub- Process Reference Proces s Decisio n Diagram Connection Hardcopy / Document Financial Actuals Budget Planning Manual Proces s Existing Version / Data System Pass/F ail Decisio n

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