Facilitate the Data Exchange Between Headquarters and Subsidiaries with SAP In-House Cash

  • by Juergen Weiss, SEPA-Now Consulting
  • December 5, 2010
Become familiar with the most important business configuration settings of SAP In-House Cash. Get a step-by-step introduction to how to prepare both the subsidiary systems and the in-house cash center for the key business processes of SAP In-House Cash. Understand the setup of the principal master data for SAP In-House Cash.
Key Concept
SAP In-House Cash allows corporate cash and treasury management departments to set up a payment factory and to centralize their payment flows. One of the challenges is that the business processes of SAP In-House Cash span multiple financial components and require a broad set of business and technical skills.

SAP In-House Cash can help corporate treasurers or cash managers obtain a faster overview of their liquidity position and achieve a higher degree of transparency of their cash flows. Multinational organizations can centralize their group cash flows and establish in-house banks. SAP In-House Cash is one of the least known SAP applications, partly because it is separately licensed and primarily appropriate for global companies that are less centralized. It requires different settings in both the central SAP In-House Cash system as well as in the connected subsidiary SAP ERP Financials systems. I’ll provide a step-by-step introduction into the most important business configuration settings making you familiar with the necessary sequence of the system setup.

Note
For other references about SAP In-House Cash and in-house banks, see my previous Financials Expert articles “Optimize Your Corporate Payment Transactions with SAP In-House Cash” and “How ALE and IDocs Affect SAP In-House Cash Configuration,” posted in November 2009 and March 2010, respectively, as well as Aylin Korkmaz’s article “In-House Cash Center Manages Payment Processes,” from May 2004.

Business Configuration in the Satellite Systems

In my previous Financials Expert articles, you learned that SAP In-House Cash is based on tight integration between two SAP systems: the central SAP In-House Cash system and the SAP ERP Financials systems of the subsidiaries that are connected via Application Linking and Enabling (ALE). These satellite systems normally trigger their own payments and receive account statements from their house banks. In the case of SAP In-House Cash, all payment transactions are routed via the central SAP In-House Cash system. I have focused so far only on the technical settings, but there are three elementary business configurations that are mandatory in each subsidiary system that you want to connect to your in-house cash center (IHCC):

  • Define new payment methods for SAP In-House Cash payments per country and company code (depending on the types of payment processes you use) so that the satellite system can send payments to the IHCC
  • Create the IHCC as the new house bank and assign the relevant bank accounts of the company code
  • Configure the electronic bank statement settings to receive statements from the IHCC
Note
An IHCC is a virtual bank created by the headquarters of a global company to process all payment transactions between subsidiaries and external business partners.

These are the necessary configuration settings to support the most important payment processes of SAP In-House Cash: internal payments, central outgoing payments, and central incoming payments.

Juergen Weiss

Juergen Weiss works in the functional area of SAP Financial Supply Chain Management. As part of SAP’s product management team, he was globally responsible for the Financial Supply Chain Management applications, including Electronic Bill Presentment and Payment, Dispute Management, Collections Management, Credit Management, Treasury and Risk Management, Bank Relationship Management, and In-House Cash as well as Accounts Payable and Receivable.

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