IS 604: Contemporary Issues in IS Banking Enterprise Systems

Transcription

1 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:

2 Agenda Session III Agenda 1 B 2 tec Company Overview 2 Introduction to SAP Banking Services 3 SAP Business Partner 4 Contract Management 2

3 Periodic Processing Correspondence Contract Management 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

4 Back-Office Mid-Office Front-Office Contract Management 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

5 Contract Management 5 GOALS OF THIS UNIT Understand basics of organizational management concept used in SAP Banking Services Define organizational management concept from perspectives of bank and account Understand the basics of contract components

6 Agenda: Contract Management 6 Agenda 1 Organizational Management 1.1 Overview 1.2 Organizational Structure 1.3 Account Structure 1.4 Bank Posting Area 1.5 Posting Dates 2 Contract Management 2.1 Contract Components 2.2 Time Dependency

7 Organizational Management: Overview 7 In the center of the transactional banking is a contract* between the bank and the customer. To handle the contract a bank needs: product (template for a contract), contract managing organizational unit (it also represents organizational structure) and business partner (defined as account holder, card holder and/or others). *Contract = Account

8 Organizational Management: Overview 8 Organizational management can be viewed from two perspectives: Organization of the bank (organizational structure/ hierarchy) An organizational structure depicts the hierarchy in which the various organizational units in enterprise are arranged. Organizational units are functional units, which represent within banking services from SAP, for example, the branches or subsidiaries of a bank where contracts can be managed. Organization of the accounts To process all business transactions bank needs customer accounts and internal accounts. General ledger serves as a complete record of all business transactions. The central task of general ledger accounting is to provide comprehensive picture for external accounting, e.g. balance sheet statement, statement of profits and losses. Organizational Structure of Bank / Hierarchy Organizational Structure of Accounts

9 Organizational Management: Organizational Structure 9 For every organizational unit infotypes can be managed, which mirror a logical set of data records that describe the organizational unit. If an infotype is not defined for the organizational, unit the necessary information can be derived from the higher organizational units in the hierarchy. Bank Posting Area defined Calendar defined Example: The highest organizational unit in the org. hierarchy (headquarters) has defined infotypes. For the lower level organizational unit (subsidiary) infotype Bank Posting Area was not defined separately, but instead the value is derived from the superordinate org. unit. Bank Posting Area derived Calendar defined Organizational unit - is used to depict structures (admin. or account.) and can have assigned infotypes Internal Account Customer Account Infotypes are: Address Contract-managing unit Bank key, bank country Bank posting area Public holiday calendar

10 Organizational Management: Account Structure 10 Internal Account Customer Account Suspense accounts (CpD) Payment items that could not be assigned to any other account are posted here as a result of posting control Profit and loss clearing accounts Foreign exchange (FOREX) position accounts After a currency conversion, the system automatically generates a posting for payment items on two forex position accounts. One is an interim posting on the forex position account in the transaction currency, and the other is an interim posting on the forex position account in the account currency. Cash accounts Reference account, for example, for account closure For example: Current account Loan account Time deposit account Savings account IS 540 Management of Enterprise Systems

11 Organizational Management: Account Structure 11 Bank Identification Identification of Financial Institute unique identification number valid for all banks worldwide (ex: SWIFT code) Bank Identification Code DE Bank Key unique country-specific number for a bank Bank Country two character long abbreviation of the bank country Account Identification Internal account identification number (GUID) automatically generated unique key External account identification number composed amongst others of the account number, automatically or manually generated number Bank Account Contract ID (BAC) customer-specific contract identification

12 Organizational Management: Account Structure 12 Bank and Account Identification BANK A BANK B 500,00 EUR Bank Code: DE Bank Code: DE Customer Account AAA External ID: DE Internal ID: 82HE223HE888382FA89324HFB2839D8 Customer Account BBB External ID: DE Internal ID: 2FE36C78F9A11DDD9EB300145E5B1206 EUR - 500,00 EUR + 500,00 Internal account identification number (GUID): automatically generated unique key (for example, 82HE223HE888382FA89324HFB2839D8) External account identification number: composed amongst others of the account number which is an automatically or manually generated number (for example, ) Bank Account Contract ID (BAC): customer-specific contract identification IS 540 Management of Enterprise Systems

13 Organizational Management: Bank Posting Area 13 Bank Posting Area is important for all business transactions, since it controls posting calendar (posting dates) and provides links to accounting settings. An account contract inherits these details from contract managing organizational unit, which created and manages the contract. General Ledger Bank Posting Area controls: Posting calendar for the calculation of valid posting dates Internal Account Customer Account postings Current posting date for payment transactions Current posting date for closing tasks Accounting settings The units to be processed during mass processing

14 Organizational Management: Posting Dates 14 For every business transaction, which triggers posting the bank needs a fixed date in the system. Posting calendar divides all days in the fiscal year into working and non-working days. Posting Item Depending on how Payment Item was created system uses: Payment Item generation ways Externally by payment engine Internally by payment order Posting Date for Payment Transaction Default date of payment items that are posted in the context of payment transactions, internal and external. Cash payments, credits from bank transfer Posting Date for End-of-Day- Processing Default date of payment items that are normally posted in the end-of-day processing old posting date transactions. Settlement postings, effective cash pooling postings Internally by additional applications/ processes that generate payment item Example: Cash withdrawal by customer from ATM causes posting of debit payment item with posting date for payment transactions. Settlement of the customer s time deposit account at the month end triggers posting of credit interest with the posting date for end-of-day processing

15 Agenda: Contract Management 15 Agenda 1 Organizational Management 1.1 Overview 1.2 Organizational Structure 1.3 Account Structure 1.4 Bank Posting Area 1.5 Posting Dates 2 Contract Management 2.1 Contract Components 2.2 Time Dependency

16 Contract Management 16 In the center of the transactional banking is a contract between bank and customer. To handle the contract bank needs: product (template for a contract), contract managing organizational unit (it also represents organizational structure) and business partner (defined as account holder, card holder and/or others).

17 Contract Management: Contract Components 17 Every contract in Banking Services from SAP is created based on an already pre-defined template representing a product. Each product consist of a certain combination of attributes, which define product functions and fields.

18 Contract Management: Contract Components 18 Every contract is based on a product, while a product belongs to certain product category. Depending on the product category (account, card, card pool, or master card product category) a contract is characterized by further attributes. Some of these attributes are identical across the product categories. From the user interface perspective these attributes (basic master data) are grouped and organized in separate contract elements (tabs), as for example separate tab for Basic Data, Business Partner, Financial Conditions and so on. Contract Product Category Account Card Card Pool Master Contract Basic Master Data

19 Contract Management: Contract Components 19 Example of a current account contract: The listed attributes (master data) on the SAP GUI represent separate tabs in the contract. The contract is based on the account product. Contract Product Category Account Account Card Card Pool Master Contract Account Master Data Basic Data Business Partner Correspondence recipient Financial conditions Settlement Limits Access limits Bank statement Balance confirmation Account closure Transaction Type Groups/Media Features Direct Debit Order Credit Standing Review Posting Data Events Related Contracts Management Data Additional Management Data Payment Details

20 Contract Management: Contract Components 20 Example of a current account contract: Account Master Data: Basic Data Business Partner Correspondence recipient Financial conditions Settlement Limits Access limits Bank statement Balance confirmation Account closure Transaction Type Groups/Media Features Direct Debit Order Credit Standing Review Posting Data Events Related Contracts Management Data Payment Details Basic Data tab presents data on account identification details, the product based on, contract currency, contract status and etc. Financial Conditions tab shows any condition groups that were assigned to the contract, for example: Settlement conditions credit interest 2%, debit interest 5% Transaction conditions ATM withdrawal charge EUR 2 Event conditions account holder change EUR 30, account closure charge EUR 50 In Bank Statement tab specifies information regarding bank statement recipient, periodicity, channels, medium and format. Events tab presents information on business-related events for the contract. Every event refers to certain time during the life-cycle of the contract, for example: Account opening Account creation in the system Last account change Account closure

21 Contract Management: Time Dependency 21 Time dependency in the contract refers to the time-dependent assignment of contract data to a particular contract. The user can have a contract record displayed for any date (current, future or past) For example: when account was created ( ) the initial value of the account limit was EUR 2,000.00; in May 2010 the limit was increased till 5, The current date is August 1 st 2010, but with the valid-on display possibility user can display contract for any specific date: Valid-on = Limit = EUR 2, Valid-on = Limit = EUR 5, Extended creation is possible Extended creation refers to changes to the contract master data retrospectively or prospectively. For example: user can change account limit in the way that the change is valid and takes place only at some point of time in the future. Similarly the change can be made in the past. However not all contract attributes can be changed anymore after the contract has been used. Currency and Contract Start Date can be changed only provided that contract has status active, not used. Some contract elements use different concept of time-dependency. For these contract elements validity is specified not through valid-on while changing the contract, but instead validity period is maintained directly when changing that contract element. For example: Time deposit agreement Individual conditions Seasonal limits

22 Contract Management 22 In Banking Services from SAP the organizational structure is depicted via organizational units and infotypes. Organizational units represent functional units in the organizational hierarchy, while infotypes represent logical set of data which describe org. units (such as address,, bank country, calendar, bank postings area, etc.). Bank Posting Area is an infotype which controls posting calendar, posting dates for payment transactions and end-of-day processing. To process all business transactions a bank needs except customer accounts also internal accounts, for example: suspense account to handle erroneous payments, Forex accounts to handle internal clearing during currency conversion process. Any contract/account is based on a template, which is represented by a product. And product consists of attributes, which define product functions and fields that will be later available in the contract/account. Attributes are grouped and organized in the separate tabs within the account.