This is Blog #15 in our Record to Report Blog Series. You can find the complete series outlined HERE.
This blog provides additional detail to support last week’s blog:
R2R Series Blog #14: Run Centralized Payment Operations on SAP S/4HANA Finance: A Platform Built for the Future | SAP Blogs
Author: Josef Schlenkrich, Product Manager SAP S/4HANA Payments and Bank Communication
At SAP, we are simplifying your communication with banks by offering various options for bank communication to meet individual customer requirements. This blog is not meant as a replacement of the documentation, it is rather an extension of the documentation. This blog post will focus on the comparison of the various communication options, also providing guidance so that you can make the right business decision for your company.
You may have noticed that we currently have three ways to communicate with banks. These include:
There are numerous reasons for this. You’re probably asking yourself – which option should I be using?
If your company is very small with a very limited number of house banks, you can use the Bank Integration with File Interface (1EG). In this scenario, files are handled manually to exchange information about payments and bank statements with your bank.
Key Process Flows:
Pros:
Cons:
If your company is very small with a very limited number of house banks, you can use the Bank Integration with File Interface (1EG). In this scenario, files are handled manually to exchange information about payments and bank statements with your bank.
If your company has a decent number of house banks and you’re running a 3rd party solution for the monitoring and approval of payments, you can implement the scope item Application Interface to Retrieve Payment Files (Scope Item 2YM). This scope item provides a basic SOAP service to send outgoing payment files to banks. This scope item does not provide direct bank communication.
Key Process Flows:
Mandatory Knowledge:
Cons:
Because of all the topics above, SAP highly recommends using SAP Multi-Bank Connectivity (16R), providing direct bank communication and an out-of-the-box service managed by SAP. For the inbound communication, such as receiving bank statements, customers should use the communication scenario Finance – Account Receivable Bank Statement Integration (SAP_COM_0316). This communication scenario is related to the scope item Bank Integration with File Interface (Scope Item 1EG).
If you are looking for an out-of-the-box service of bank communication, irrespective of the number of banks you have, you can opt for SAP Multi-Bank Connectivity (Scope Item 16R). With SAP Multi-Bank Connectivity, SAP establishes the connections with your banks to automatically send payment instructions and receive status notifications, bank statements, and lockbox messages. Leveraging the monitoring capabilities, you can supervise the status of all payment instructions and see which bank statements are received and which expected bank statements are still missing. The payment monitoring is available with Advanced Cash Operations (Scope Item J78).
In addition, SAP Multi-Bank Connectivity allows you to automate other types of messages, such as bank services billing (camt.086) and deal confirmations (MT300 and MT320). You can even manually process other messages, such as images of scanned checks, which are not yet automated via a bank message monitor. The integration with your bank(s) is fully managed by SAP leveraging direct bank integrations, EBICS or SWIFT. During the onboarding you decide on an integration option for each bank with our onboarding team. If you decide to go for a direct integration and there is no standard integration with that bank available yet, SAP will get in touch with your bank to establish an individual host-2-host connection.
Key Process Flows:
Pros:
Considering the pros and cons listed above, SAP highly recommends leveraging SAP Multi-Bank Connectivity (16R) as a standard solution, as this offers an out-of-the-box service provided and updated by SAP.
Feedback
Don’t hesitate to share your thoughts, ideas or questions about the Bank Communication Blog with us in the comments section below. We will do our best to answer them all swiftly.
Also check out: Cash and Corporate Treasury Management Software | SAP
R2R Series Blog #1: Record to Report Blog Series Kick Off | SAP Blogs
R2R Series Blog #2: How to increase process efficiency in the financial close leveraging SAP’s Modern Finance and Risk Platform | SAP Blogs
R2R Series Blog #3: Why did the accountant cross the road? | SAP Blogs
R2R Series Blog #4: Ignite Your Growth of Bottom Line with SAP S/4HANA GR/IR | SAP Blogs
R2R Series Blog #5: Hard Close, Fast Close, Soft Close and Continuous Accounting | SAP Blogs
R2R Series Blog #6: Build vs Buy – 3rd Party Data Integration for SAP Central Finance | SAP Blogs
R2R Series Blog #7: Market Overview – SAP Contract and Lease Management | SAP Blogs
R2R Series Blog #8: Make your SAP S/4HANA for Central Finance implementation a success | SAP Blogs
R2R Series Blog #9 Automated Revenue Management | SAP Blogs
R2R Series Blog #10: Why You Need SAP Account Substantiation & Automation by BlackLine if you’re running SAP S/4HANA | SAP Blogs
R2R Series Blog #11: How SAP Account Substantiation and Automation by BlackLine Complements SAP Treasury Management | SAP Blogs
R2R Series Blog #12: Improving Compliance & Controls with SAP GRC & SAP Account Substantiation and Automation by BlackLine | SAP Blogs
R2R Series Blog #13: Modern Entity Closing using SAP S/4HANA Cloud for Advanced Financial Closing as a Cloud-based Hub | SAP Blogs
R2R Series Blog #14: Run Centralized Payment Operations on SAP S/4HANA Finance: A Platform Built for the Future | SAP Blogs
(Please note, this blog was reposted with permission from Josef: Payments and Bank Communication in S/4HANA Cloud | SAP Blogs)
Okumaya devam et...
This blog provides additional detail to support last week’s blog:
R2R Series Blog #14: Run Centralized Payment Operations on SAP S/4HANA Finance: A Platform Built for the Future | SAP Blogs
Author: Josef Schlenkrich, Product Manager SAP S/4HANA Payments and Bank Communication
At SAP, we are simplifying your communication with banks by offering various options for bank communication to meet individual customer requirements. This blog is not meant as a replacement of the documentation, it is rather an extension of the documentation. This blog post will focus on the comparison of the various communication options, also providing guidance so that you can make the right business decision for your company.
Three Ways of Bank Communication
You may have noticed that we currently have three ways to communicate with banks. These include:
- Bank Integration with File Interface (1EG)
- Application Interface to Retrieve Payment Files (2YM)
- Bank Integration with SAP Multi-Bank Connectivity (16R)
There are numerous reasons for this. You’re probably asking yourself – which option should I be using?
Comparing the Three Ways of Bank Communication
Bank Integration with File Interface (Scope Item 1EG)
If your company is very small with a very limited number of house banks, you can use the Bank Integration with File Interface (1EG). In this scenario, files are handled manually to exchange information about payments and bank statements with your bank.
Key Process Flows:
- Download the payment instruction file created by your back-end system
- Upload the bank statement from the bank to SAP S/4HANA Cloud
Pros:
- You don’t need any additional SAP S/4HANA Cloud license
- You don’t require Advanced Cash Operations (Scope Item J78)
Cons:
- You’re responsible for the bank communication and the remedy of defects
- Very manual and hence error-prone process
- High risk of fraud, because files can be manipulated
If your company is very small with a very limited number of house banks, you can use the Bank Integration with File Interface (1EG). In this scenario, files are handled manually to exchange information about payments and bank statements with your bank.
Application Interface to Retrieve Payment Files (Scope Item 2YM)
If your company has a decent number of house banks and you’re running a 3rd party solution for the monitoring and approval of payments, you can implement the scope item Application Interface to Retrieve Payment Files (Scope Item 2YM). This scope item provides a basic SOAP service to send outgoing payment files to banks. This scope item does not provide direct bank communication.
Key Process Flows:
- Retrieve payment medium files from SAP S/4HANA Cloud and send them to banks.
Mandatory Knowledge:
- Deep knowledge of the Data Medium Exchange Engine (DMEE) or Extended Data Medium Exchange Engine (DMEEX)
- Decent experience with web services
- Familiarity with the payment and bank statement formats, depending on your requirements
- Pros:
- Potential flexibility
Cons:
- It’s a priced item, Advanced Cash Operations (Scope Item J78) is required
- You need to submit a request and get approval from SAP to activate the Application Programming Interface (API)
- You’re in charge of the integration project. This leads to higher effort and cost
- You must develop your own encryption mechanisms between the middleware and the bank
- You must plan for operation maintenance for the integration scenario è This leads to higher effort and cost
- You require self-managed middleware
- Depending on your requirements, the average implementation project takes at least 2 to 3 months
- This scope item will not be enhanced in future releases and is excluded from future developments
- This scope item will not support additional message types, such as payment status
Because of all the topics above, SAP highly recommends using SAP Multi-Bank Connectivity (16R), providing direct bank communication and an out-of-the-box service managed by SAP. For the inbound communication, such as receiving bank statements, customers should use the communication scenario Finance – Account Receivable Bank Statement Integration (SAP_COM_0316). This communication scenario is related to the scope item Bank Integration with File Interface (Scope Item 1EG).
SAP Multi-Bank Connectivity (Scope Item 16R)
If you are looking for an out-of-the-box service of bank communication, irrespective of the number of banks you have, you can opt for SAP Multi-Bank Connectivity (Scope Item 16R). With SAP Multi-Bank Connectivity, SAP establishes the connections with your banks to automatically send payment instructions and receive status notifications, bank statements, and lockbox messages. Leveraging the monitoring capabilities, you can supervise the status of all payment instructions and see which bank statements are received and which expected bank statements are still missing. The payment monitoring is available with Advanced Cash Operations (Scope Item J78).
In addition, SAP Multi-Bank Connectivity allows you to automate other types of messages, such as bank services billing (camt.086) and deal confirmations (MT300 and MT320). You can even manually process other messages, such as images of scanned checks, which are not yet automated via a bank message monitor. The integration with your bank(s) is fully managed by SAP leveraging direct bank integrations, EBICS or SWIFT. During the onboarding you decide on an integration option for each bank with our onboarding team. If you decide to go for a direct integration and there is no standard integration with that bank available yet, SAP will get in touch with your bank to establish an individual host-2-host connection.
Key Process Flows:
- Connect securely with encryption and signatures between SAP S/4HANA Cloud and SAP Multi-Bank Connectivity and the connected financial institutions or banks
- Forward payment instructions to banks in local format
- Receive status notifications for payment instructions
- Receive bank statements in standard formats, such as MT940, MT942, camt.052, camt.053, camt.054, BAI2, CSB43, CFONB
- Receive BAI2 lockbox messages
- Send and receive MT300 and MT320 messages
- Receive camt.086 fee reports
- You have the option to process other messages manually
- The list of supported formats is not complete and will be continuously enhanced and updated in future releases.
Pros:
- Connects securely with encryption and signatures between SAP S/4HANA Cloud and SAP Multi-Bank Connectivity and the connected financial institutions or banks
- Managed integration by SAP
- Reduced time and effort of implementation
- Reduced time and effort of maintenance
- Automation of messages sent and received
- Option to mix integration channels like direct bank integration, EBICS and SWIFT, out of one service
- Advanced Cash Operations is not vital for the use of SAP Multi-Bank Connectivity. If you want to use payment monitoring, you will need Advanced Cash Operations (J78) as this is not supported with Basic Cash Operations (BFB).
- Cons:
- It’s a priced item
Conclusion: Our Recommendation
Considering the pros and cons listed above, SAP highly recommends leveraging SAP Multi-Bank Connectivity (16R) as a standard solution, as this offers an out-of-the-box service provided and updated by SAP.
Feedback
Don’t hesitate to share your thoughts, ideas or questions about the Bank Communication Blog with us in the comments section below. We will do our best to answer them all swiftly.
Calls to action:
To learn more about related solutions check out this on demand event:
SAP Treasury and Working Capital Management Live | TAC Events
Also check out: Cash and Corporate Treasury Management Software | SAP
And check out the rest of our series:
R2R Series Blog #1: Record to Report Blog Series Kick Off | SAP Blogs
R2R Series Blog #2: How to increase process efficiency in the financial close leveraging SAP’s Modern Finance and Risk Platform | SAP Blogs
R2R Series Blog #3: Why did the accountant cross the road? | SAP Blogs
R2R Series Blog #4: Ignite Your Growth of Bottom Line with SAP S/4HANA GR/IR | SAP Blogs
R2R Series Blog #5: Hard Close, Fast Close, Soft Close and Continuous Accounting | SAP Blogs
R2R Series Blog #6: Build vs Buy – 3rd Party Data Integration for SAP Central Finance | SAP Blogs
R2R Series Blog #7: Market Overview – SAP Contract and Lease Management | SAP Blogs
R2R Series Blog #8: Make your SAP S/4HANA for Central Finance implementation a success | SAP Blogs
R2R Series Blog #9 Automated Revenue Management | SAP Blogs
R2R Series Blog #10: Why You Need SAP Account Substantiation & Automation by BlackLine if you’re running SAP S/4HANA | SAP Blogs
R2R Series Blog #11: How SAP Account Substantiation and Automation by BlackLine Complements SAP Treasury Management | SAP Blogs
R2R Series Blog #12: Improving Compliance & Controls with SAP GRC & SAP Account Substantiation and Automation by BlackLine | SAP Blogs
R2R Series Blog #13: Modern Entity Closing using SAP S/4HANA Cloud for Advanced Financial Closing as a Cloud-based Hub | SAP Blogs
R2R Series Blog #14: Run Centralized Payment Operations on SAP S/4HANA Finance: A Platform Built for the Future | SAP Blogs
(Please note, this blog was reposted with permission from Josef: Payments and Bank Communication in S/4HANA Cloud | SAP Blogs)
Okumaya devam et...