Blog
Grip on your EVE SOT
Over the past decades, banks significantly increased their efforts to implement adequate frameworks for managing interest rate risk in the banking book (IRRBB). These efforts typically focus
Find out moreThe most recent S/4HANA Finance for cash management completes the bank account management (BAM) functionality with a bank account subledger concept. This final enhancement allows the Treasury team to assume full ownership in the bank account management life-cycle.
But one stumbling block was left in the design: each bank account master requires a dedicated set of general ledger (G/L) accounts, on which the balances are reflected (the master account) and through which transactions are posted (clearing accounts). Very often organizations define unique GL account for each house bank account (alternatively, generic G/L accounts are sometimes used, like “USD bank account 1”), so creation of a new bank account in the system involves coordination with two other teams:
Due to this maintenance process dependency, even with the new BAM, the creation of a new house bank account remained a tedious and lengthy process. Therefore, many organizations still keep the house bank account management within their IT support process also on S/4HANA releases, negating the very idea of BAM as master data.
To overcome this limitation and to put all steps in the bank account management life cycle in the ownership of the treasury team completely, in the most recent S/4HANA release (2009) SAP has introduced a new G/L account type: “Cash account”. G/L accounts of this new bank reconciliation account type are used in the bank account master data in a similar way as the already established reconciliation G/L accounts are used in customer and vendor master data. However, two new specific features had to be introduced to support the new approach:
In the same release, there are two other features introduced in the bank account management:
The impact of this new design on treasury process efficiency probably makes you already excited. So, what does it take to switch from the old to the new setup?
Luckily, the new approach can be activated on the level of every single bank account in the Bank account management master data, or even not used at all. Related functionalities can follow both old and new approaches side-by-side and you have time to switch the bank accounts to the new setup gradually. The G/L account type cannot be changed on a used account, therefore new G/L accounts have to be created and the balances moved in accounting on the cut-over date. However, this is necessary only for the G/L account masters. Outstanding payments do not prevent the switch, as the payment would follow the new reconciliation account logic upon activation. Specific challenges exist in the cheque payment scenario, but here SAP offers a fallback clearing scenario feature, to make sure the switch to the new design is smooth.
Over the past decades, banks significantly increased their efforts to implement adequate frameworks for managing interest rate risk in the banking book (IRRBB). These efforts typically focus
Find out moreWhile SAC is a planning tool to be considered, it requires further exploration to evaluate its fit with business requirements and how it could unlock opportunities to potentially streamline
Find out moreAfter the collapse of Credit Suisse and the subsequent orchestrated take-over by UBS, there are widespread calls for increasing capital requirements for too-big-too-fail banks to prevent
Find out moreThis article provides a thorough comparison of the Survival Analysis and Migration Matrix approach for modeling losses under the internal ratings-based (IRB) approach and IFRS 9. The optimal
Find out moreThe Zanders purpose Our purpose is to deliver financial performance when it counts, to propel organizations, economies, and the world forward. Recently, we have embarked on a process
Find out moreTo fully leverage the benefits of this technology, it’s essential to understand and address security threats when implementing blockchain solutions. As a decentralized distributed
Find out moreThe start of the migration from the SWIFT FIN format to the new ISO 20022 XML format, which is a banking industry migration that must be completed by November 2025. Whilst at this stage
Find out moreIn today’s world, supply chain disruptions are consequences of operating in an integrated and highly specialized global economy. Along with affecting the credit risk of impacted
Find out moreLarge systemic financial institutions have to show that they are resolvable during times of great stress. In this article, we discuss a specific requirement for resolution planning: the
Find out moreA 19th century book on Indian proverbs1 contains a story about a man who went on a journey with his son: “He came to a stream. As he was uncertain of its depth, he proceeded to sound
Find out moreWith the potential of Blockchain technology to transform businesses, we aim to guide our clients through the complexities of this technology and help them leverage it to improve their
Find out moreLate last year, ChatGPT emerged online as the next phase in this fast-growing and exciting technological space. Many of us tried it out already, and I have yet to meet anyone who is not left
Find out moreThis article may help SAP system owners re-think or change their approach towards bespoke custom solutions in the system. Over the past 14 years, my colleagues and I
Find out moreThe Federal Council in Switzerland wants to make sure that the Swiss financial sector will play a leading role in sustainability. To help accomplish this, it published an action plan in
Find out moreAn increasing number of policy makers and regulators have embedded the recommendations in industry guidance and laws. In this article we summarize the TCFD recommendations, taking into account
Find out moreToday’s interest rates are positive, the yield curve relatively flat and, in some currencies, even (slightly) inverse. The rise in interest rates poses a significant challenge for banks.
Find out moreWith every improvement, fraudsters look for and find new opportunities to exploit. When the opportunity arises, some people see a big incentive or pressure to commit fraud, and most will be
Find out moreMore simply put, the EBA was asked to investigate whether the current prudential framework properly captures environmental and social risks. In response, the EBA published a Discussion Paper
Find out moreThese risks stem from the transition towards a low carbon economy and from the physical risks of damages due to extreme weather events. To address climate-related financial risks within the
Find out moreIn the below overview, we present an overview of the main ESG-related publications from the European Commission (EC), the European Central Bank (ECB), and the European Banking Authority (EBA).
Find out more