SAP S/4HANA Treasury Business Partner Design and Maintenance

A SAP S/4HANA Treasury Business Partner (BP) is the master data object that represents a counterparty in a corporation's treasury transactions, including banks, financial institutions, and internal subsidiaries. Additionally, business partners are essential in SAP S/4HANA for recording information related to securities issues, such as shares and funds.

The SAP Treasury Business Partner (BP) serves as a fundamental treasury master data object, utilized for managing relationships with both external and internal counterparties across a variety of financial transactions; including FX, MM, derivatives, and securities. The BP master data encompasses crucial details such as names, addresses, contact information, bank details, country codes, credit ratings, Legal Entity Identifiers (LEIs), settlement information, authorizations, withholding tax specifics, and more. 

Treasury BPs are integral and mandatory components within other SAP Treasury objects, including financial instruments, cash management, in-house cash, and risk analysis. As a result, the proper design and accurate creation of BPs are pivotal to the successful implementation of SAP Treasury functionality. The creation of BPs represents a critical step in the project implementation plan. 

This section outlines the key considerations for professionally designing and maintaining BPs within SAP Treasury, and highlights the areas where consultants need to align with business users to ensure the smooth creation and maintenance of BPs.

Business Partners Structure

The structure of BPs may vary depending on a corporation's specific requirements. Below is the most common structure of treasury BPs: 

• Group BP represents a parent company, such as the headquarters of a bank group or corporate entity. Typically, this level of BP is not directly involved in trading processes, meaning no deals are created with this BP. Instead, these BPs are used to reflect credit ratings, support limit utilization in the credit risk analyzer, and enable reporting.
• Transactional BP represents a direct counterparty used for booking deals. Transactional BPs can be divided into two types: 
  • External BPs represent banks, financial institutions, and security issuers. 
  • Internal BPs represent subsidiaries of a company. 

Business Partners Naming Conventions

It is important to define a naming convention for the different types of BPs, and once defined, it is recommended to adhere to the blueprint design to maintain the integrity of the data in SAP. 

Group BP ID: Should have a meaningful ID that most business users can understand. Ideally, the IDs should be of the same length. For example: ABN AMRO Group = ABNAMR or ABNGRP, Citibank Group = CITGRP or CITIBNK. 

External BP ID: Should also have a meaningful ID, with the addition of the counterparty's location. For example: ABN AMRO Amsterdam – ABNAMS, Citibank London – CITLON, etc. 

Internal BP ID: The main recommendation here is to align the BP ID with the company code number. For example, if the company code of the subsidiary is 1111, then its BP ID should be 1111. However, it is not always possible to follow this simple rule due to the complexity of the ERP and SAP Treasury landscape. Nonetheless, this simple rule can help both business and IT teams find straightforward solutions in SAP Treasury. 

The length of the BP IDs should be consistent within each BP type. 

Treasury Business Partners' Maintenance

1- BP Creation

Business partners are created and maintained via the Fiori app Manage Business Partner Master Data (F3163), which has become the standard entry point in S/4HANA. The classic transaction code BP remains available for on-premise systems. During creation, various details are entered to establish the master data record, including basic information such as name, address, and contact details, as well as specific financial data such as bank account information, settlement instructions, WHT, authorizations, credit rating, and tax residency country.

Consider implementing an automated tool for creating Treasury BPs. LTMC Migration Cockpit has been deprecated; the current SAP standard option for newer SAP S/4HANA releases is the Fiori-based Migrate Your Data app, or SAP Master Data Governance (MDG) where centralized approval workflows are a priority. At Zanders, we have a pre-developed solution to create complex Treasury BPs, covering both SAP ECC and the latest S/4HANA releases, designed to remain clean-core compliant for clients on S/4HANA Cloud.

2- BP Amendment

Regular updates to BP master data are crucial to ensure accuracy. Changes to addresses, contact information, or payment details should be promptly recorded in SAP. SAP Joule now allows users to query duplicate flags conversationally during amendment, helping to identify inconsistencies before release.

3- BP Release

Treasury BPs must be validated before use. This validation is carried out in SAP through a release workflow procedure. We strongly recommend activating such a release workflow for BP creation and amendment, and assigning BP release to a person who is not authorized to create or amend BPs. BP amendments are often performed by the Back Office or Master Data team, while BP release is typically handled by Middle Office or an independent Master Data Governance team.

4- BP Hierarchies

Business partners can have relationships as described, and the system allows for the maintenance of these relationships, ensuring that accurate links are established between various entities involved in financial transactions. 

5- Alignment

During the Treasury BP design phase, it is important to consider that BPs will be utilized by other teams in a form of Vendors, Customers, or Employees. SAP AP/AR/HR teams may apply different conditions to a BP, which can have an impact on Treasury functions. For instance, the HR team may require bank details of employees to be hidden, and this requirement should be reflected in the Treasury BP roles. Additionally, clearing Treasury identification types or making AP/AR reconciliation GL accounts mandatory for Treasury roles could also be necessary.  

Transparent and effective communication, as well as clear data ownership, are essential in defining the design of the BPs. 

Conclusion 

The design and implementation of BPs require expertise and close alignment with treasury business users to meet all requirements and consider other SAP streams.

At Zanders, we have a strong team of experienced SAP consultants who can support you in designing BP master data, developing clean-core-compliant tools to create and amend BPs, and meeting strict treasury segregation of duties requirements as well as the client's IT rules and procedures.