Chair of Information Systems IV (ERIS) Institute for Enterprise Systems (InES) IS 604: Contemporary Issues in IS Banking Enterprise Systems Prof. Dr. Alexander Mädche Chair of Information Systems IV Institute for Enterprise Systems Lecture supported by:
Agenda Session III Agenda 1 B 2 tec Company Overview 2 Introduction to SAP Banking Services 3 SAP Business Partner 4 Contract Management 5 Product Configuration 6 Financial Conditions & Pricing 7 Order Management 8 Item Management & Payment Services 9 2
Periodic Processing Correspondence Item Management and Payment Services 3 Product Configuration Financial Conditions/Pricing Contract Management Accounting Order Management/ Business Operation Posting Lock Management Settlement Currency Conversion Posting Control Processing/ Exception Handling Open Item Management Cash Flow Billing and Invoicing Item Management/ Payment Services Payment Distribution Financial Customer Information Management Double, Triple, Quadruple Control Combined Settlement Master Contract Management Pooling Reporting Collateral Archiving Payment Distribution & Monitoring Credit Facilities Insurance
Back-Office Mid-Office Front-Office Item Management and Payment Services 4 Current account life-cycle Contact Advisory Offer Deal Mainte nance Manage Payments Account Settlement Account Closure Create BP Create Account Maintain BP Maintain Account Payments Settle Account Create Product Maintain Product Assign Product Define Ind. Conditions Create Conditions Maintain Conditions Order Management Create Product Pricing List Maintain Product Pricing List Posting Control Business Processes Business Events Business Transactions Book on internal accounts Reporting
Item Management and Payment Services 5 GOALS OF THIS UNIT Understand the functions of payment items and payment transaction orders Explain the usage of information items and nonbalance changing turnovers Define types of account balance basis and relevance of dates Overview of integration of deposit management in banking services from SAP with payment engine
Agenda: Item Management and Payment Services 6 Agenda 1 Payment Item 2 Further Item Types 3 Balance and Key Figures 4 Payment Transaction Orders 5 Integration with Payment Transfer Systems
Payment Item 7 Payment Item is a one-sided turnover on an account and represents debit or credit posting. It can consist of one or more payment item positions on the same item identification. Ordering Party Item Recipient Item Routing Item Turnover Item Ordering Party Item item that is posted on the account of the ordering party. An ordering party item can always be both a credit and a debit. They can be initiated both internally and externally. Example: customer has withdrawn money from his account through ATM machine result is an ordering party payment item with debit posting to the account Recipient Item item that is posted on the account of the recipient. Here, both a credit and a debit can be involved that can be internally or externally initiated, too. Example: customer transferred money from his current account to his savings account this transfer results in two payment items: one ordering party item with debit posting to the current account and one recipient item with credit posting to the savings account. Routing Item are postings of the payment system to routing accounts Example: recipient account specified in the bank transfer does not exist transfer results in the generation of the routing item with posting to suspense account until further processing Turnover Item are postings with no ordering party or recipient characteristic. Example: time deposit account settlement results in generation of turnover item with credit posting of incurred credit interests to time deposit account
Payment Item: Attributes 8 Mandatory Attributes Transaction Type Account Identification Posting Date Value Date Amounts Medium characterizes payment transactions assigned to each posting generated by the system can be configured Bank Country/ Bank Key/ Account Number/ IBAN/ Currency/.. specifies the date, on which a payment item is posted it can be determined from BS as a default value or individually specifies the date for which a payment item is relevant for interest calculation determined on the basis of value date condition and depends on customizing settings Amount in Transaction Currency Amount in Account Currency medium from customer to ordering item bank payment method from ordering bank to recipient bank
Payment Item: Attributes 9 Optional Attributes Payment Method Payment Form Numbers Sending Applications Payment Notes Date Subject to Final Payment Mandate ID Further References Origin specifies the way that recipient items are transferred by payment transactions specify a one to 20-digit number for a payment form; it checks an existing payment form or whether it has already been cashed specify the application used for transferring the payment item to banking services from SAP, - synonym for channel contain information for the ordering party and/or recipient of the payment specifies the date from which the bank customer can access the amount from postings of subject to final payment receipts is a unique reference to mandates for each vendor (payment recipient) related to Technical References and Business References specifies a freely definable characteristic that can be used for customer-specific enhancements
Payment Item: Methods and Status 10 1. Create Payment Item 2. Check Formal check and Material check 3. Reaction 1. Payment item can reach SAP BaS from external systems or can be created directly in BaS through dialog. 2. After entering into the system every payment item is first subject to checks: formal checks (ex: check of posting dates, account existence) and material checks (ex: check of limits, locks). Relevant checks that must be performed during the posting process should be activated in the system. 3. If formal and material checks found error system responds according to the set of rules, one of which is sending this item to post-processing. From post-processing following actions are possible: In Post-Processing Post Return Reject Posted Returned Deleted Reverse Adjust Redirect Transfer Post Reversed Status Method
Agenda: Item Management and Payment Services 11 Agenda 1 Payment Item 2 Further Item Types 3 Balance and Key Figures 4 Payment Transaction Orders 5 Integration with Payment Transfer Systems
Further Item Types 12 Information Item Item Relevant for Settlement Item for Debit Position Is an item saved for information purposes only (for example, interest penalty or debit position items) Does not result from payment transactions Is not transferred to the general ledger Does not affect the account balance or available amount Can be either relevant for settlement or debit position Non-Balance Changing Turnovers Accrual / Deferral Legacy Data Transfer Accrual/ deferral of interest and charges, Legacy data transfer, Individual value adjustments Determine which interest and charges have been accrued between the last settlement and the defined key date The revenues and expenses are posted as non-balance-changing turnover and transferred to the general ledger A legacy data transfer is used to transfer payment items and account balances from a legacy system to banking services from SAP up to the going-live date
Agenda: Item Management and Payment Services 13 Agenda 1 Payment Item 2 Further Item Types 3 Balance and Key Figures 4 Payment Transaction Orders 5 Integration with Payment Transfer Systems
Balance and Key Figures: Account Balances 14 Account Balance - is the amount that results from the difference between the debit side and credit side of an account. In banking services from SAP, balances can either be based on the value date of the account flows, or the posting date. These are called value date-based or posting date-based balances respectively. Period balance is used for the period specified in the calculation; starting with the starting balance zero Aggregated balance is used for the period specified in the calculation and includes the aggregated balance of the previous period Turnover is used to calculate the balance for the specified period, not including the balances Account Balance Posting Date- Based Balance Value Date- Based Balance Balance Basis: Turnover Aggregated Balance Period Balance
Balance and Key Figures: Counters 15 Counter Is a business object in banking services from SAP that is used to record the number of posting items for each account Counter can measure in whole numbers only The reading increased by one for each relevant posted item Reversed posting items decrease the counter readings Counters can be used in the definition of settlement conditions
Balance and Key Figures: Turnover Classes 16 Turnover Classes: Group turnovers according to different criteria, for example: salary deposits, transaction charges, loan repayment, etc. The specific value resulting from each turnover group is called flexible balance The turnovers for an account are generated when you post payment items The criteria that determine which turnovers in an account are selected and grouped is defined in a flexible balance for each turnover group Turnover classes are assigned to an account either at: product level assigning relevant turnovers to the product in customizing condition level assigning relevant turnovers to the condition type in the customizing or in the application Turnover Classes: Access Limits Access limit is a value-related restriction of turnovers of a certain turnover class or counters for an account within a defined period. It can be defined depending on turnover class or counter: Counter-based, for example: the account has an access limit of maximum 15 ATM debit turnovers per day, which means customer can execute maximum 15 ATM withdrawals per day Turnover-based, for example: the account has an access limit of EUR 10.000 per day, which means customer s transaction cannot exceed 10,000 within one day. This can be used to check for money laundering
Agenda: Item Management and Payment Services 17 Agenda 1 Payment Item 2 Further Item Types 3 Balance and Key Figures 4 Payment Transaction Orders 5 Integration with Payment Transfer Systems
Payment Transaction Orders 18 Payment Transaction Orders Payment Order Standing Order Forward Order Payment Order: Is a business object that depicts a payment order to execute a bank transfer, collection authorization or check deposits Consist of two or more payment items: ordering party item and recipient item(s). Payment Order Transfer from account 4110 to account 4120 of EUR 300,00 Payment Item 1 Ordering party Payment Item 2 Recipient Acc.:4110-300,00 Acc.:4120 +300,00
Payment Transaction Orders 19 Standing Order: Is a payment order that is generated periodically to debit (standing debit memo) or credit (standing bank transfer) one or more recipient accounts With fixed or variable amounts Standing Order with Variable Amount: A special type of standing order in which amounts are transferred to one or more recipient accounts on a specific execution date, depending on the account balance on that date Distinction of variable standing order: Complete execution Partial (percentage) execution in case of multiple recipients Amount restrictions: Base amount The minimum amount (in the transaction currency) that is to remain on the account after the standing order is executed Minimum amount A recipient-specific minimum amount for the standing order. If an amount is lower than the minimum transfer amount, it is not posted Maximum amount A recipient-specific maximum amount for the standing order Execution in end-of-day mass run
Payment Transaction Orders 20 Forward Order: Is a payment order that is not executed immediately, but in the future on a certain execution date. When executed the forward order becomes a payment order The forward order does not create any reserve items or future items during the creation process Account closure is not possible if a forward order exists In Customizing, the maximum number of days for creating a forward order before the execution date ca be defined.
Agenda: Item Management and Payment Services 21 Agenda 1 Payment Item 2 Further Item Types 3 Balance and Key Figures 4 Payment Transaction Orders 5 Integration with Payment Transfer Systems
Integration with Payment Transfer Systems 22 Payment Engine (FS-PE) is a single-payment operations platform that can connect to multiple internal and external payment channels. This component can be used to verify, sort, and clear payment transactions. The graph below shows the integration scenario of Payment Engine with Banking Services.
Item Management and Payment Services 23 The central point in BaS payment services are payment items and payment orders. Payment item is a one-sided turnover on an account resulting in the debit or credit posting. Payment items have mandatory and optional attributes. Mandatory attributes include: transaction type that characterizes payment transaction and assigned to each generated posting, account identification of ordering party and recipient, posting and value dates, transaction amount and currency, and medium for a transaction. Payment item posting triggers formal and material checks, failure of which causes further processing according to the set of rules. Further item types consist of information items and non-balance changing turnovers. Information items are items saved for information purposes, however they can be cleared during the settlement and offset by credit postings. Non-balance changing turnovers do not change balance of the account, but determine accrued revenues and deferred expenses. Payment transaction order consists of two or more payment items, where one is ordering party payment item and the rest recipient payment items. Payment transaction orders classified into payment orders, standing orders, and forward orders. Standing orders are orders that executed constantly on the periodic basis. Forward orders are orders with posting and value dates in the future.