Background
The Central Finance 1909 version and later have central payments functionality. This article shows us how to implement central payment capabilities without a central finance SAP environment. Two alternative SAP landscapes (SE1 and BABUEHP7) using a single SAP Central Payments system are demonstrated in this article (ECCEHP8). This article will focus on and limit the use of the internal cash centre in the Source system (Central Payment system).
Use Case
Tom is the head of the Treasury division for a US-based company that operates internationally from various nations. A global template for the Finance & Treasury process had been implemented by Tom’s company, and it has been operational since 2018. Recently, Tom’s business bought a new business in Europe. The company that was acquired used a SAP system that had been operational for the previous five years. Tom wants to make sure that the newly acquired company’s Treasury procedure adheres to the established framework. The business would be affected by any change, though, as the system landscapes varied and a sizable number of users relied on the current environment. Tom meets with his IT architecture Neeraja to offer a solution, so the newly acquired company may use a worldwide template without interfering with business operations.
Business need
Tom intended to use the current system with only minor improvements to either system. Tom is limited by his budget if he chooses the new S4 HANA product of Central Finance and Central Payments. Tom hopes to have the most recent version of the S4 HANA system with Central Finance features in the upcoming years.
Utilized SAP In-House Cash Solution in two distinct SAP environments by recently acquired company (SE1 & BABUEHP7). There are both internal and external payments. The business also used the POBO (payment on behalf of) procedure.
Tom intended to use the POBO process and the DMEE and BCM approval procedures that are currently used in the global template for payments (ECCEHP8).
Fig. 1: The Central Payment Factory’s anticipated system architecture
Utilizing SAP
An answer has been found thanks to Neeraja IT architecture. By employing a remote function call, the two new system landscapes (SE1 and BABUEHP7) will connect to the central system ECCEHP8 (RFC). The books of sources systems account for the vendor/customer payments (SE1 & BABUEHP7). Using the current global template payment file structure and BCM approval process, payment to the vendor through the external banks will be carried out from the Central Payment system ECCEHP8. The central system ECCEHP8 will be used for accounting for payments.
The sending system’s accounting, the process phases, and the central payment system
- Account for vendor invoice in the source system, Accounting Entry
Expense Dr.
To Vendor Account Cr
2. The accounting entry has been posted, and payment runs have been posted.
clearing account for IHC Dr.
To Vendor Account Cr
3. Payment run produces IDOC PAYEXT, payment order is placed in the internal cash centre, and payment request is produced in response to the payment order.
4. As part of day-end processing, IHC will produce statements for its own cash banks. A financial entry will be published.
(113155) IHC Clearing Account Dr
To IHC Main bank account (113150) Cr
Account number for IHC Main (113150) Dr
In the IHC Receivable/Payable account (198010) Cr.
The central payment system and source system will be connected via RFC. From the source system to the central payment system, payment request (PAYEXT) IDOCs will be moved.
5. Updates to the Central Payment system will be made to PAYEXT IDOC.
6. In the “PAYRQ” table, Payment Request has been amended.
7. When a payment is requested, Payment Program F111 will process the payment. The details of a payment request, including
- Financial information for the vendor
- Reference to vendor invoice
- Reference for source system payments
8. The bank monitor is updated for the BCM payment batch.
9. The Central Payment system keeps track of the payment procedure.
IHC Payable/Receivable (198010) Dr.
To Bank Clearing Account Number (113102) Cr.
10. Creation of Payment Files Per Bank Requirements (Based on DMEE in Central Payment system)
11. gotten a financial statement from an outside bank
12. Post bank statements in the Central Payments system and make an accounting entry.
(113102) Bank Clearing Account Dr
To the principal bank account (113100) Cr
Fig: 3 (Vendor invoice in Company code 1300 in client SE1)
Fig. 5 (Client SE1 creates a payment order in the In House Cash Center “2000”).
Fig: 7(IDoc)
Fig: 8(Payment request of client SE1 created in ECCEHP8)
Fig: 09 (Vendor Invoice in client BABUEHP7)
Fig: 10 (Vendor payment in client BABUEHP7)
Fig. 11 (In House Cash Center “DBKE” client BABUEHP7 creates payment request 110)
Fig: 12 (Payment request from client BABUEHP7)
Fig:13 (Payment request from client BABUEHP7 transferred as payment request IDOC in client ECCEHP8)
Fig:14 (Payment request from client SE1 payment request payment processing in client ECCEHP8)
Fig:15 (IHC Bank statement publishing in SE1 client)
Fig:16 (IHC Bank statement posting in SE1 client)
Fig:17 (IHC Bank statement posting in SE1 client)
Fig:18 (GL bank clearing Account balance in client SE1)
Fig:19 (GL Main bank Account balance in client SE1)
(Fig. 20: Client SE1’s GL Receivables/Payables Account balance)
(Fig. 21) The balance of the GL Receivables/Payables Account in the Central Payment System is ECCEHP8.
Fig:22 (payment in ECCEHP8)
Fig:23(Payment updated in payment batch in bank monitor in ECCEHP8)
Disclaimer:
Depending on the needs of the client, accounting entries may alter. In order to align with central payment processing while taking into consideration payment requests handled from various clients, all accounting entries presented in the blog are for representational purposes only.
The S4 HANA Central Finance solution’s central payments functionality is not replaced by this solution. The S4 HANA Central Finance solution’s central payment capabilities provides numerous additional functionalities (such as open item clearing options). Before deploying the SAP Central payments capabilities of S4 HANA Central Finance, the solution described in this blog can be viewed as a preparatory step.
The SAP sandbox systems SE1, BABUEHP7, and ECCEHP8 that are shown in the blog are unrelated to any clients.
Conclusion
Payment requests can be forwarded to another Central SAP client after being processed in a SAP client utilising the In House Cash process. The receiving SAP system is capable of processing payment requests (making use of single instance connections with external banks). the following advantages with centralised payments from several SAP systems
- In terms of connectivity, the central system relates to external banks (avoid multiple connections with banks)
- In a central payment system, there is only one DMEE (payment file structure).
- Centralizing the BCM approval procedure