Three major benefits of S/4 HANA Bank Account Management
With house bank accounts treated as master data instead of configuration objects including the latest enhancement, the bank account subledger concept, SAP S/4HANA Bank Account Management (BAM) aims to shift responsibility of bank account management life cycle from the technical teams to the cash and banking teams.
Bank accounts can now be created and maintained by the cash and banking responsible team, giving them more control over the timing of opening or closing of an account as well as expediting the overall process and limiting the number of users involved in the maintenance of the accounts.
Figure 1 – Launchpad BankApplications
The advantages of using the full version of BAM are multiple, but below we highlight three of the main reasons full BAM is a must have for the companies using one or multiple SAP environments.
Maintenance of bank account data can trigger workflows based on the organization’s requirements and the approval processes in place. With the workflows the segregation of duties can be enforced when maintaining a bank account.
Even though workflows are not a new functionality in S/4HANA, the fact that workflow templates are available and can be amended by defining preconditions, step sequences and recipients improves the approval process of bank accounts.
The workflows can be created and activated as completely new ones or based on the already existing templates . You can create a new workflow by copying an existing one and updating the parameters according to the new requirements.
All the requests to release or approve bank account changes are available as of S/4HANA 2020 in the My Inbox for Bank Accounts app, the dedicated inbox app where users can check the status of each request initiated by the users themselves or sent to them and act upon.
Easy data replication
One of the challenges multiple organizations have, especially those operating various SAP environments, is data synchronization and replication. We often come across situations when banks, house banks and bank accounts are not maintained in all relevant environments creating data inconsistencies and making processes more difficult than they already are.
One of the ways of avoiding these types of situations is by replicating banks, house banks and bank accounts from production to quality assurance and to development environments using standard Idocs.
Figure 2 – Bank data replication in S/4 HANA
If the organization is operating on multiple SAP and non-SAP instances and running processes in a S/4 HANA side-car solution, the challenge of maintaining banks, house banks and bank accounts grows exponentially. Distributing the data via Idocs will not only keep all the systems coordinated, it will also decrease the amount of manual work and avoid situations when processes fail because of delays in keeping the data up to date in all relevant environments.
Figure 3 -Bank data replication across multiple environments
Simple way of managing cash pools
Cash pooling structures can easily be set up by the user and in this way the BAM solution is integrated with the process of making cash management transfers.
Even though the cash pooling and cash concentration in S/4HANA are managed using five different apps (shown in the figure below), the actual structure of the cash pool is defined directly in the Manage Bank Accounts app (Cash Pool tab).
Figure 4 – Five apps to manage cash pooling and cash concentration in S/4HANA
In the Cash Pool tab, the user can define the cash pool structure as per each company’s requirements. It is important to keep in mind the fact that a bank account can be assigned only to two different cash pools: once as the header account of a cash pool, and once in a different cash pool, as a subaccount.
The cash pools created in the system are not restricted to one company code but can be defined using various currency accounts belonging to multiple company codes. For each of the bank accounts included in a cash pool, a target balance as well as a minimum transfer amount can be defined in the Cash Pool tab of the Manage Bank Accounts app, with the mention that both (target balance as well as minimum transfer amounts) must be defined in the bank account currency.
During the cash concentration process, when bank transfers are generated, the payment methods defined in this tab will be picked up. Therefore, if required, two different payment methods can be assigned; the first for the structure where the bank account is acting as a header account and the second for the one where the account in scope is a subaccount. To pick them up from the drop-down list, the assigned payment methods must be initially setup in the system.
Maintaining banks, house banks and bank accounts can be a difficult task especially in large organizations operating with different SAP and non-SAP environments. It can be time-consuming; it can involve multiple people from different parts of the organization (IT, master data, cash and banking etc.) and it can easily be prone to errors and mismatches if not correctly maintained and synchronized. Having one single source of truth for the bank accounts – which is easy to maintain, user-friendly, with appropriate controls in place and reporting capabilities, easy to replicate the data across different environments and which allows the user to create and maintain not only the bank accounts but also the cash pool structures – can save time, resources and simplify processes.