Overview of SAP Bank Communication Management

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SAP ERP and Bank Communication Management
SAP Bank Communication Management helps in implementing various level of approval workflows for payments made from an organization before processing that payment with the bank. An example can be a workflow approval made by a payment manager for a payment that is due to a supplier. Once the manager approves this outflow of cash, the AP person can initiate this transaction with the bank

Payments that are to be initiated are grouped together in a payment run and these batches are triggered for workflows. SAP BCM monitors both the incoming and outgoing workflows to track the cash flow within an organization. Therefore, the banking process is streamlined with Fiori reports for a clear communication with the bank.

 

The payment program (F110 or F111) runs and allows the download of payment media file that can be uploaded and to an intermediate system which helps in the transmission of the payment file to and from the bank. This payment file generated is in the bank’s required format (MT100 or ISO 20022 XML). This process also allows encryption of the payment file before transmitting to the bank for payment.

SAP Bank Communication Management has the following benefits

Payment workflows via SAP Bank Communication Management can be between SAP system or non-SAP system.

 

Payment Scenario between non-SAP system 

If payments are processes from a non-SAP system, then the payment media file that is generated is the bank’s required (ISO 20022 XML) format is sent for approval through SAP BCM system.

SAP NetWeaver Process Integration

 The below flow represents a new offering for Payment Factory to implement a non-SAP payment

The accounting entries are tracked in sources system (non-SAP), only payment is processed via the SAP BCM using BCM Connector.

SAP New Offering in BCM

The process steps for implementing this non-SAP Payment are as follows:

  1. Payment processed in non-SAP system and Payment medium (ISO 200 222 XML) file generated.
  2. Payment medium (ISO 200 222 XML) file interfaced into SAP.
  3. SAP will convert the payment medium file (ISO 200 222 XML) into a payment batch (using function modules). For other payment medium format where function modules are not available, custom function module must be written.
  4. Non-SAP Payment medium will be created as a batch in bank monitor.
  5. Non-SAP Payment medium batch available for approval in bank monitor.
  6. Non-SAP Payment medium batch is approved or rejected.
  7. On approval of the batch, payment medium file will be encrypted and sent to the service provider for further processing.

 

 

 

Payment Scenario between SAP system

If the payments are processes in an SAP system then the payment liabilities are created in the SAP system and the corresponding processing of these payments is also done in the SAP system with the help of SAP Bank Communication Management for workflows. The approved file is then digitally encrypted and sent to bank.

The processing of SAP BCM can be achieved via the scope item J60 in SAP S/4HANA Cloud

  • Securely connect with encryption between SAP S/4HANA or SAP ERP (Digital Core) and SAP Multi-Bank Connectivity and the connected financial institutions/banks
  • Forward payment instructions to banks in local required format
  • Receive status notification for payment instructions to tract every payment
  • Receive bank statements in standard formats namely MT940, CAMT.053 and BAI2Receive lockbox messages BAI2

SAP BCM can be achieved as a scope item activation when you use SAP S/4HANA Cloud. This scope item is J60 (Accounts Payable) and 1EG (Bank Integration with File Interface). The image below shows the process flow of SAP Bank Communication Management achieved through payment program in SAP S/4HANA Cloud.

Post the payment program step the scope item 1EG (Bank Integration with File Interface) can be used to complete the payment medium download and upload of bank statement steps.

  1. J60 (Accounts Payable) – This creates the BCM batch and sends it for approvals
  2. 1EG (Bank Integration with File Interface)- Helps in bank interface by creating the required payment medium file – downloads and uploads

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