SAP Financial Supply Chain Management (SAP FSCM), a set of applications in the SAP ERP Financials solution, offers an in-house cash solution for managing those payments: the SAP In-House Cash application.

With SAP In-House Cash you can: Improve your credit position Open up new strategic investment options Gain improved advantage in external markets Ensure solvency of subsidiaries Aggregate deal size to amortize or reduce risk

SAP In-House Cash enables you to maximize interest accrual and cash surplus, while giving you a centralized view of subsidiary and group transactions. At the same time, you can minimize: Exposure during cash crunches Netting process times Bank transfer and transaction costs Currency exchange and value date losses Physical cash transfers Administrative overhead

SAP Solution Brief SAP ERP Financials

FINANCIAL SUPPLY CHAIN MANAGEMENT WITH SAP IN-HOUSE CASHA Virtual Bank for the Way You Do Business Today

Companies today face extra or-

dinary pressures to conduct busi-

ness in a smarter, leaner,

and more economic way. In an

increasingly global economy,

that means streamlining financial

processes across organizational

boundaries and international

borders. The number of corporate

groups has increased and clusters

of subsidiaries conduct business

with each other and with external

partners often across interna-

tional borders. This has created

a new business climate in which

managing intragroup and external

payments efficiently is more

important than ever.

The Power of Concentration: In-House Banking

Means Fewer External Banks

SAP In-House Cash helps companies to streamline payment processing among subsidiaries and with external business partners. By serving as a centralized, in-house virtual bank, SAP In-House Cash slashes netting process times, while reducing costs associated with currency exchanges and bank transfers. Most compelling, SAP In-House Cash eliminates losses due to value dating, maximizes cash positions for group entities, and increases net interest gains.

By providing a centralized view into the liquid funds and payment transactions of all participating subsidiaries, SAP In-House Cash supports critical decision making for improved investment strategies. Subsidiaries can pay internal entities without the need for physical cash transfers between their own internal accounts or with external banks. Groups gain improved credit positions for better terms in external money markets. By carrying out payment orders when individual subsidiaries experience cash flow bottlenecks, SAP In-House Cash assures continued solvency a vital hedge in uncertain times.

SAP In-House Cash has all the functions required to completely centralize worldwide payment transactions, while being highly adaptable to decentralized or hybrid organizational structures. SAP In-House Cash addresses all types of organizations, including subsidiaries and their affiliates, head offices, house banks used by head offices, and external business partners and their house or partner banks.

Using the functions of SAP In-House Cash, you can: Calculate and debit interest and charges Grant current account overdrafts to subsidiaries Generate bank statements for subsidiaries Automate intragroup payment transactions Automate incoming and outgoing payments for external

partners and partner banks Pay receivables for subsidiaries

Control Payment Transactions Regionally and

Globally

For a subsidiary, the in-house cash center based on SAP In-House Cash is a virtual bank that serves as a house bank, which processes both internal and external payments. Using SAP In-House Cash, the in-house cash center manages one or more current accounts for each subsidiary in a group and keeps the accounts in any currency. The subsidiary keeps one or more accounts with the in-house cash center as if it were a house bank.

The head office manages the financial accounting software (which could be the SAP Financials for Banking package or other soft-ware) and the in-house cash center. The in-house cash center is located centrally, so the parent company (or another organiza-tional unit) manages the current accounts. Like a house bank, the in-house cash center creates and dispatches bank statements to the subsidiaries. This reduces the float or transfer time for a payment from the ordering party to the recipient, thereby eliminating the value date differences between subsidiaries.

Because SAP In-House Cash handles payments between subsidiaries without using external banks, you avoid the associated transfer fees. You gain increased control over cash flow, while subsidiaries reduce netting process times.

Earn a Better Return on Financial Information

As part of SAP ERP Financials, SAP In-House Cash delivers on-demand reports for instant financial analyses. Postprocessing and many other functions can be automated, reducing staff hours spent closing books at the end of a day, month, quarter, or year.

Maximize Interest Gains

SAP In-House Cash enables you to maximize net interest income and to disperse that income to subsidiaries. Interest calculations can be based on several methods. Extra-credit interest earned by a larger group from external money markets can be passed on to subsidiaries. You can opt to charge debit interest below that of the house bank, thereby improving the net interest income of subsidiaries, and apply an overdraft interest rate if the balance exceeds the internal overdraft limit.

Gain Advantages in External Money Markets

SAP In-House Cash helps you improve your position in external money markets by maximizing your credit position, gaining better interest rates and terms through larger deal sizes, and amortizing risks over multiple subsidiaries. You can also trim the number of bank accounts needed and reduce losses due to exchange rate fluctuations. Central cash management reduces costs and improves size advantage in external money markets. With larger credit amounts in the accounts of the in-house cash center, you may gain access to investment strategies previously unavailable.

Your Own Business: An Untapped Competitive Edge

SAP In-House Cash delivers powerful benefits: Streamlined internal and external payment transactions Reduced currency exchange and value date losses Maximized interest gains Hedges against cash flow difficulties Increased competitive position in external money markets

Multinational organizations must tap every possible advantage to maximize market position and revenues. Because SAP In-House Cash manages accounts centrally, you have a direct view of all payment transactions in your group and of the liquid funds available in the accounts of all subsidiaries. If cash is tight for a particular subsidiary, the in-house cash center can ensure its payment obligations are met. Meanwhile, it can grant current

account overdrafts on short notice, ensuring individual subsidiaries remain solvent amidst dynamic market conditions. In todays unpredictable global economy, streamlining business across all kinds of borders is essential. With SAP In-House Cash, that necessity can be leveraged as a new source of competitive strength.

For More Information

To learn more about how SAP In-House Cash can streamline payment processing, visit our Web site at www.sap.com/financials.

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SAP In-House Cash is powered by the SAP NetWeaver platform. SAP NetWeaver unifies technology components into a single platform, allowing organizations to reduce IT complexity and obtain more business value from their IT investments. It provides the best way to integrate all systems running SAP or non-SAP software.

SAP NetWeaver also helps organizations align IT with their business. With SAP NetWeaver, organizations can compose and enhance business applications rapidly using enterprise services. As the foundation for enterprise service-oriented architecture (enterprise SOA), SAP NetWeaver allows organizations to evolve their current IT landscapes into a strategic environment that drives business change.

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