Advanced Bank Account Management Overview
With Advanced Bank Account Management, cash managers and bank accountants can manage the bank and account master data centrally and maintain signatories in multiple bank accounts. The result of the maintenance can be activated with different control patterns.
Cash managers and bank accountants can also view the bank and bank account related master data with reports and fact sheets, and look at an annual review.
Bank Account Contract Type
Bank Account Management provides master data for all kinds of bank accounts which are under the control of Treasury and Cash Management processes. It involves accounts under a contractual relationship with an external counterparty (aka "Bank"):
Examples here are current accounts, deposit accounts, sweep accounts held at (classical) banks, and accounts held at a PSP (payment service provider).
The concept Bank Account Contract Type enables you to control major feature differences and enable customers to control UI and process settings for the different contract types.
The Contract Type represents the contractual nature of different kinds of bank accounts, where this contractual nature influences semantics for the following:
- Logical key
- Mandatory contractual fields
- Major status lifecycle
The Account Type is a substructure of the contract type. It allows customer to make specific settings within a contract type. It is used in the following:
- Custom field control
- Custom workflow control
The Bank Account Type is in consequence a substructure of the Bank Account Contract Type. In the example above, the Bank Account Contract Type "Technical Account" defines a certain set of predefined semantics and lays out the lifecycle of all attached accounts / account types.
The Bank Account Type in turn is linked to the Bank Account Contract Type, steers the authorization, is a customer entity and can be administered through configuration.
Bank Account Reconciliation Accounts
If your company runs payment processes involving bank accounts, you need to set up corresponding G/L accounts so that your company’s payment transactions are also recorded in General Ledger Accounting. To be able to run your payment processes, you need to assign each of your house bank accounts to a G/L account acting as a reconciliation account. In addition, for each payment method supported for a house bank account, you need a separate G/L account. This means that for each of your house bank accounts, you first need to assign a "main" G/L account which in turn is connected to one open-item managed clearing account per payment method.
Depending on the type of G/L account used for the house bank connection, one set of G/L accounts is sufficient for multiple house banks or a new set of G/L accounts has to be created each time a new house bank is to be connected.
You can use two ways of creating the required sets of G/L accounts:
- Bank Reconciliation Accounts
- Balance Sheet Accounts
Depending on the type of G/L account you want to assign to your house bank account, refer to either of the following procedures to assign a G/L account to the house bank account.
Bank Reconciliation Accounts:
You can simplify your payment processes by creating new house bank accounts and connecting them to a new type of G/L account, that is, a bank reconciliation account. A G/L account with this new G/L account type can be assigned to more than one house bank account. In other words, you can cut down on the number of G/L accounts needed by creating just one bank reconciliation account and assigning it to several house bank accounts.
Balance Sheet Accounts:
Create the required reconciliation account and clearing accounts with balance sheet accounts as their G/L account types. Using this approach, you usually need to create a new set of G/L accounts every time you set up a new house bank account connection.
The Bank Account Reconciliation approach is designed to be a further option for customers to run their business.
There is no need to migrate or move from the known Balance Sheet Approach to the Bank Reconciliation Ledger. Since you control the method through master data settings in the House Bank Account an individual approach for each House Bank Account is possible. Thereby a side-by-side approach is feasible. This also implies that no big-bang solution must be implemented as customer have to option to gradually move to the Bank Account Reconciliation, if desired.
Furthermore, there is also no disruption when it comes to the payment processes itself. All payment related apps in the SAP S/4HANA Cloud system work as known. There is no new app or parallel payment process established when using the Bank Reconciliation Ledger.
Manage Banks Functionality
The two Manage Banks apps offer a wide array of functionality to manage bank data in the SAP S/4HANA Cloud, public edition.
Master Data Specialists use the app Manage Banks - Bank data to upload external bank directories to store public bank data in the SAP S/4HANA Cloud system. Individual corporate data can be enhanced by the Manage Banks - Cash Management app where additional information for business partners or house banks is maintained.
Pain Points and SAP Benefits
Typically, organizations lack a centralized process for bank relationship management. Inconsistent processes across subsidiaries create challenges in terms of overall governance, audit, and transparency.
Furthermore, processes are frequently not harmonized and lack integration with related processes, such as payment management.
SAP S/4HANA Cloud and Advanced Bank Account Management help enterprises to run more effectively by breaking down silos, reducing manual effort, and standardizing processes.
The solution enables organizations to effectively manage bank accounts and bank account relationships.
Integration with Bank Communication Management
The solution provides user-defined groups, which help users to group bank accounts according to the specialized requirements of end users.
The signatories maintained in the Bank Relationship Management master data can be integrated with Bank Communication Management (BCM) payment approval so that it simplifies signatory management, which was previously maintained in the release strategy of the BCM component payment approval.
The solution provides predefined workflow steps for the approval process of opening, changing, and closing bank accounts. This workflow process is also flexible enough for customers to change or redefine the steps as required.
The bank account review process helps customers to easily manage and review bank accounts on a yearly or quarterly basis. Cash managers can initiate the review process and internal company contacts perform the review to finish the workflow. The cash manager can then quickly analyze the review processes for the bank accounts.
The solution provides the Upload and the Download Bank Accounts functionality to help the customers to migrate bank accounts or make mass changes to bank accounts. Customers can download all bank accounts into a Microsoft Excel file, make a mass change, and upload the file again to the system.
The above offerings facilitate simplified and auditable bank account management processes. Organizations are thereby enabled to streamline the process of opening, maintaining, and closing accounts. Reduced effort to administrate workflows and reports results in reduced costs overall in the Cash Management area.