IS 604: Contemporary Issues in IS Banking Enterprise Systems · Chair of Information Systems IV (ERIS) Institute for Enterprise Systems (InES) IS 604: Contemporary Issues in IS Banking

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:

Agenda – Session III

IS 604 Banking Enterprise Systems

2

Agenda

1 B2tec Company Overview

2 Introduction to SAP Banking Services

3 SAP Business Partner

4 Contract Management

5 Product Configuration

6 Financial Conditions & Pricing

7 Order Management

8 Item Management & Payment Services

9 …

3 Item Management and Payment Services

Co

rre

spo

nd

en

ce

Pe

riod

ic

Pro

cessin

g

Double,

Triple,

Quadruple

Control

Archiving

Product Configuration

Accounting

Financial Conditions/Pricing

Contract Management

Financial

Customer

Information

Management

Reporting

Collateral

Insurance

Order Management/

Business Operation

Posting Control Processing/

Exception Handling

Open Item Management

Combined Settlement

Payment Distribution & Monitoring

Master Contract Management

Posting Lock

Management Settlement

Currency

Conversion

Cash Flow Item Management/

Payment Services

Billing and Invoicing Payment Distribution

Pooling

Credit Facilities


Item Management and Payment Services 4 F

ron

t-O

ffic

e

Mid

-Off

ice

Ba

ck-O

ffic

e

Contact Advisory Offer Deal Mainte

nance

Create BP

Create

Account

Maintain

BP

Maintain

Account

Settle

Account

Create

Product Maintain

Product

Maintain

Conditions

Create

Conditions Assign

Product

Define Ind.

Conditions

Manage

Payments

Maintain Product

Pricing List

Create Product

Pricing List

Account

Settlement

Posting

Control

Business

Processes

Business

Events

Business

Transactions

Book on internal

accounts Reporting

Account

Closure

Current account life-cycle

Order

Management

Payments


Item Management and Payment Services


5

Understand the functions of payment items and

payment transaction orders

Explain the usage of information items and non-

balance changing turnovers

Define types of account balance basis and

relevance of dates

Overview of integration of deposit management in

banking services from SAP with payment engine

GOALS OF THIS UNIT

Agenda: Item Management and Payment Services 6

Agenda

1 Payment Item

2 Further Item Types

3 Balance and Key Figures

4 Payment Transaction Orders

5 Integration with Payment Transfer Systems


Payment Item 7

Payment Item is a one-sided turnover on an account and represents debit or credit posting. It can consist of one or more

payment item positions on the same item identification.

Ordering Party Item – item that is posted on the account of the ordering party. An ordering party item can

always be both a credit and a debit. They can be initiated both internally and externally.

Example: customer has withdrawn money from his account through ATM machine result is an ordering party payment

item with debit posting to the account

Recipient Item – item that is posted on the account of the recipient. Here, both a credit and a debit can be

involved that can be internally or externally initiated, too.

Example: customer transferred money from his current account to his savings account this transfer results in two

payment items: one ordering party item with debit posting to the current account and one recipient item with credit posting

to the savings account.

Routing Item – are postings of the payment system to routing accounts

Example: recipient account specified in the bank transfer does not exist transfer results in the generation of the routing

item with posting to suspense account until further processing

Turnover Item – are postings with no ordering party or recipient characteristic.

Example: time deposit account settlement results in generation of turnover item with credit posting of incurred credit

interests to time deposit account

Ordering Party Item Recipient Item Routing Item Turnover Item


Payment Item: Attributes 8

Mandatory Attributes

Transaction Type

Account Identification

Posting Date

Value Date

Amounts

Medium

• characterizes payment transactions

• assigned to each posting generated by the system

• can be configured

• specifies the date, on which a payment item is posted

• it can be determined from BS as a default value or

individually

• specifies the date for which a payment item is relevant for

interest calculation

• determined on the basis of value date condition and

depends on customizing settings

Bank Country/ Bank Key/ Account Number/ IBAN/ Currency/ ..

• medium – from customer to ordering item bank

• payment method – from ordering bank to recipient bank

• Amount in Transaction Currency

• Amount in Account Currency


Payment Item: Attributes 9

Optional Attributes

Payment Method

Payment Form Numbers

Sending Applications

Payment Notes

Date Subject to Final

Payment

Mandate ID

Further References

Origin

specifies the way that recipient items are transferred by payment

transactions

specify a one to 20-digit number for a payment form; it checks an

existing payment form or whether it has already been cashed

specify the application used for transferring the payment item to

banking services from SAP, - synonym for channel

contain information for the ordering party and/or recipient of the

payment

specifies the date from which the bank customer can access the

amount from postings of subject to final payment receipts

is a unique reference to mandates for each vendor (payment

recipient)

related to Technical References and Business References

specifies a freely definable characteristic that can be used for

customer-specific enhancements


Payment Item: Methods and Status 10

Status

Method

In Post-Processing

Post Return Reject

Posted Returned Deleted

Reverse Adjust Redirect Transfer Post

Reversed


1. Payment item can reach SAP BaS from external systems or can be created directly in BaS through dialog.

2. After entering into the system every payment item is first subject to checks: formal checks (ex: check of posting dates,

account existence) and material checks (ex: check of limits, locks). Relevant checks that must be performed during the

posting process should be activated in the system.

3. If formal and material checks found error system responds according to the set of rules, one of which is sending this item to

post-processing. From post-processing following actions are possible:

1. Create

Payment Item

2. Check

Formal check and Material check 3. Reaction


Agenda

1 Payment Item






Further Item Types 12

Information Item

Is an item saved for information purposes only (for example, interest penalty or debit position items)

Does not result from payment transactions

Is not transferred to the general ledger

Does not affect the account balance or available amount

Can be either relevant for settlement or debit position

Non-Balance Changing Turnovers

Accrual/ deferral of interest and charges, Legacy data transfer, Individual value adjustments

Determine which interest and charges have been accrued between the last settlement and the defined

key date

The revenues and expenses are posted as non-balance-changing turnover and transferred to the general

ledger

A legacy data transfer is used to transfer payment items and account balances from a legacy system to

banking services from SAP up to the going-live date


Item Relevant for Settlement Item for Debit Position

Accrual / Deferral Legacy Data Transfer


Agenda

1 Payment Item






Balance and Key Figures: Account Balances 14

Account Balance

Posting Date-

Based Balance

Value Date-

Based Balance

Balance Basis:

Turnover Aggregated Balance Period Balance


Account Balance

- is the amount that results from the difference between the debit side and credit side of an account.

In banking services from SAP, balances can either be based on the value date of the account flows, or the

posting date. These are called value date-based or posting date-based balances respectively.

Period balance is used for the period specified in the calculation; starting with the starting balance ‘zero’

Aggregated balance is used for the period specified in the calculation and includes the aggregated

balance of the previous period

Turnover is used to calculate the balance for the specified period, not including the balances

Balance and Key Figures: Counters 15

Counter

Is a business object in banking services from SAP that is used to record

the number of posting items for each account

Counter can measure in whole numbers only

The reading increased by one for each relevant posted item

Reversed posting items decrease the counter readings

Counters can be used in the definition of settlement conditions


Balance and Key Figures: Turnover Classes 16

Turnover Classes: Group turnovers according to different criteria, for example: salary deposits, transaction charges, loan

repayment, etc.

The specific value resulting from each turnover group is called ‘flexible balance’

The turnovers for an account are generated when you post payment items

The criteria that determine which turnovers in an account are selected and grouped is defined in a flexible

balance for each turnover group

Turnover classes are assigned to an account either at:

product level – assigning relevant turnovers to the product in customizing

condition level – assigning relevant turnovers to the condition type in the customizing

or in the application

Turnover Classes: Access Limits Access limit is a value-related restriction of turnovers of a certain turnover class or counters for an account

within a defined period. It can be defined depending on turnover class or counter:

Counter-based, for example: the account has an access limit of maximum 15 ATM debit turnovers per

day, which means customer can execute maximum 15 ATM withdrawals per day

Turnover-based, for example: the account has an access limit of EUR 10.000 per day, which means

customer’s transaction cannot exceed 10,000 within one day. This can be used to check for money

laundering



Agenda

1 Payment Item






Payment Transaction Orders 18

Payment Transaction Orders

Payment Order:

Is a business object that depicts a payment order to execute a bank transfer,

collection authorization or check deposits

Consist of two or more payment items: ordering party item and recipient item(s).

Payment Order

Transfer from account 4110 to account 4120 of EUR 300,00

Payment Item 1

Ordering party

Payment Item 2

Recipient

Acc.:4110 -300,00 Acc.:4120 +300,00


Payment Order Standing Order Forward Order


Standing Order: Is a payment order that is generated periodically to debit (standing debit memo) or credit (standing bank

transfer) one or more recipient accounts

With fixed or variable amounts

Standing Order with Variable Amount: A special type of standing order in which amounts are transferred to one or more recipient accounts on a

specific execution date, depending on the account balance on that date

Distinction of variable standing order:

Complete execution

Partial (percentage) execution in case of multiple recipients

Amount restrictions:

Base amount

The minimum amount (in the transaction currency) that is to remain on the account after the standing order is executed

Minimum amount

A recipient-specific minimum amount for the standing order. If an amount is lower than the minimum transfer amount, it

is not posted

Maximum amount

A recipient-specific maximum amount for the standing order

Execution in end-of-day mass run



Forward Order:

Is a payment order that is not executed immediately, but in the future on a certain

execution date.

When executed the forward order becomes a payment order

The forward order does not create any reserve items or future items during the

creation process

Account closure is not possible if a forward order exists

In Customizing, the maximum number of days for creating a forward order before

the execution date ca be defined.



Agenda

1 Payment Item






Integration with Payment Transfer Systems 22

Payment Engine (FS-PE) is a single-payment operations platform that can connect to multiple internal and external payment

channels. This component can be used to verify, sort, and clear payment transactions. The graph below shows the integration

scenario of Payment Engine with Banking Services.


Item Management and Payment Services 23

The central point in BaS payment services are payment items and payment

orders. Payment item is a one-sided turnover on an account resulting in the

debit or credit posting.

Payment items have mandatory and optional attributes.

Mandatory attributes include: transaction type that characterizes payment

transaction and assigned to each generated posting, account identification of

ordering party and recipient, posting and value dates, transaction amount and

currency, and medium for a transaction.

Payment item posting triggers formal and material checks, failure of which

causes further processing according to the set of rules.

Further item types consist of information items and non-balance changing

turnovers.

Information items are items saved for information purposes, however they can be

cleared during the settlement and offset by credit postings.

Non-balance changing turnovers do not change balance of the account, but

determine accrued revenues and deferred expenses.

Payment transaction order consists of two or more payment items, where one

– is ordering party payment item and the rest – recipient payment items.

Payment transaction orders classified into payment orders, standing orders,

and forward orders.

Standing orders are orders that executed constantly on the periodic basis.

Forward orders are orders with posting and value dates in the future.


Documents

IS 604: Contemporary Issues in IS Banking Enterprise Systems · Chair of Information Systems IV (ERIS) Institute for Enterprise Systems (InES) IS 604: Contemporary Issues in IS Banking