Payment Factory Concept
Companies looking for a payment factory can have multiple drivers. Some just want to centralize payment processes from a visibility perspective, some would like to optimize payment processes, and some focus on the entire automation of the payment process. All in all these are some of the main benefits of running a central payment factory based on SAP S/4HANA.
Payment centralization is the key step towards lowering cost for payment execution, optimizing payment processing, and increasing cash visibility. With this solution you gain full flexibility to centralize all payments including payments in name of, payments on behalf of, and internal payments in one solution. The focus is to bring companies into a position to be able to quickly change payment processes based on master data settings instead of technical configuration.
Payments are moving quickly towards being real-time, which requires a system that is able to interact with the bank integration channel like SAP Multi-Bank Connectivity in real time. The SAP payment factory supports real-time processing, but it also provides user interfaces to trigger real-time actions allowing a business user to easily request a cancellation of a payment, reprioritize payments ad hoc, or prevent payments to go out in the case of a critical situation of a bank, currency, or country.
Content Validation and Control
To lower rejection rates from banks, companies can validate payments already in the payment factory. During validation erroneous payments (such as incorrect IBAN or BIC code) and duplicates can be detected before the payments are submitted to the bank. To increase data quality, missing information can be enriched to increase the STP rates at the bank and therefore reduce costs reduce.
High Transactional Throughput
Payment volumes are significantly increasing, specifically in the B2C business. SAP S/4HANA Finance for advanced payment management is prepared to manage high-volumes of payments in all payment scenarios, and also covering classical scenarios with FI-CA as the initiating system.
SAP S/4HANA Finance for advanced payment management can handle error situations in a very flexible way. If an error is detected in the solution or a bank rejects a payment, the error situation can either be handled manually via a repair function, or handled completely automatically by reversing payments and informing the respective subsidiary or applying automatic corrections which are determined based on machine learning and earlier manual corrections. During manual repair, users can either change certain attributes or change other settings and reprocess payments without the need to reverse the entire process flow.
Monitoring, Reporting, and Analytics
To provide full visibility, SAP provides various levels of information within the payment factory. You can view detailed information on a single transaction and its entire lifecycle, visualized in a graphical process flow. The solution also provides high-level monitors of all payments and their statuses, leading towards analytical apps which allow business users to execute ad-hoc queries on the payments executed in the system. The analytical apps provide insights into questions such as how many transactions have been executed towards a specific bank (account), in which currency, or by which payment instrument, based on a snapshot or throughout a period of time.
Automation and Integration
A centralization really makes sense if it is easy to integrate with the central system and you increase the level of automation. This is fully achieved by implementing advanced payment management as the solution has an open architecture allowing subsidiaries to integrate via various channels with the solution. Other non-SAP solutions can also be easily integrated based on an API layer which has predefined integrations to SAP solutions, and can also work with third-party products integrated into the payment process.
A cornerstone of optimizing payment processing is adding flexibility to the payment routing. With the solution this payment routing is based on a flexible ruleset defined as master data. Users can define simple rules based on attributes of a payment like currency, payment type, and beneficiary bank, and rules can also include more sophisticated attributes like cut-off times, available amounts, percentage of business/share of wallet, and so on.
Central Format Handling
In an heterogeneous system landscape it becomes very challenging to keep each system up to date to generate the bank-specific payment format locally. Based on that, SAP's approach is to generate the target payment format in a central payment factory leveraging the information provided in the original payment format which has be sent to SAP S/4HANA Finance for advanced payment management, potentially with real-time lookups into the local systems for enrichment if required. With this the company has full control over the payment format generation, but only has one central place where the conversion takes place. For the format generation the standard mechanism via DMEEX is used. This is integrated into the solution.