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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 moreIntraday bank statement (IBS) reporting, a service that your house bank can provide your company, enables your cash manager to understand which debits and credits have cleared on your bank accounts throughout the current day. We explain how to implement it in SAP.
Compared to intraday bank statement reporting, end-of-day (EOD) bank statement reporting is only available the next calendar day. The information therefore always comes too late to be meaningful for cash management decisions – apart from providing an opening bank balance for the next day.
So, why would a Treasury typically start implementing IBS reporting in its cash management processes?
This article will now only focus on the cash management side; the IBS reconciliation process may be discussed another time. If you like to know more about bank reconciliation using intraday statements, feel free to reach out to us. We have a pre-developed solution that we can implement at your side.
There are a few design considerations that need to be looked at before attempting to implementing this solution in SAP.
Ultimately, the goal here is to receive and upload intraday bank statements throughout the day and to load cash movement data into your SAP system. This cash-relevant data needs to be made visible through the cash management reports so that the cash manager can better estimate EOD balances and make intelligent decisions related to funding accounts or investing excess funds.
We will now go into detail on how to setup intraday statement reporting and assume that the basic FI-CO settings for e.g. the company code are already in place. We also assume that the EOD bank statement process has already been implemented. To learn how to set this up, please read this article on virtual accounts.
Cash Management
It is important to understand that intraday statement data is converted into so called ‘Memo Records’ once loaded in SAP. These memo records can be visualized in the cash management reports (FF7AN/FF7BN). We will now explain the necessary settings on the cash management report section to ensure that the intraday data can be made visible in these cash management reports.
Define planning levels
First, we need to define a planning level; a label that is assigned to all cash movements as reported on the intraday statement. The planning level is used to structure the data in the cash management reports.
The level is a two-digit label, freely definable. We set it to C1.
The sign we need to set to blank as cash movements reported on this level can be both positive and negative.
The source will be ‘BNK’. This ensures that this planning level is reported on both ‘cash position’ and ‘liquidity forecast’ in the FF7AN/FF7BN reports.
The descriptions are freely definable. We define it as ‘INTRADAY’.
Define planning types
A planning type is a label under which a ‘memo record’ is stored on the SAP database. A planning type is subsequently linked to a ‘planning level’ to ensure the underlying data can be visualized in the cash management reports.
First, we define the planning type label: we set it identical to the planning level; C1 and link it to planning level C1.
We need to define an archiving category. This defines the data retention period of the memo records. If the period is exceeded and the reorganization program is executed; the memo record data will be cleansed.
The auto-expiry option defines whether the memo record will expire automatically and becomes invisible in the cash management report output. This needs to be enabled. The idea here is that the intraday statement data will be superseded by the EOD statement data once this is loaded after midnight next calendar day. To ensure we do not double count identical cash movements from both sources, the intraday data needs to be expired.
Also, a number range and description need to be entered. No specific functional considerations are needed here.
Define grouping and maintain headers
A ‘grouping’ is a label that is used to structure the cash management report data in a meaningful manner for the user. The grouping can be selected in the cash management reports and is going to dictate how the data is shown to the user.
We will configure a grouping ‘CASHPOS’.
Maintain structure
Under the grouping we can now maintain the structure of the cash management data. For our report, we are including two components. The first component is the planning level., the second will be the GL account under which we record our bank account balances. This is the GL account we typically maintain in the house bank account data (table T012K, transaction FI13, NWBC).
For the first component we are going to add an entry as follows:
The grouping we set to ‘CASHPOS’.
The type we set to ‘E’ for planning level. Now we can define a planning level that is going to be relevant to our cash management report output.
We set the selection to C1 (our intraday planning level we defined earlier).
This setting will ensure all cash management data as stored under C1 planning level is going to be selected in the report output.
For the second component we are going to add an entry as follows:
The grouping we set to ‘CASHPOS’.
The type we set to ‘G’ for GL Account. Now we can define the bank GL account that is going to be relevant for our cash management report output.
The selection we are going to set to a GL account is saved in our bank account entry in table T012K.
This setting will ensure all cash management data as stored under the GL account and relevant for our bank account will be selected in the report output.
The combination of these two lines is going to ensure that we will only see the C1 data for our one bank account. We can add multiple lines to increase the scope of the reports output.
We should now be in good shape to import our first intraday statements. We could download these statements from our electronic banking platform. Also, we could be in a situation where we already receive them through some automated H2H interface or even through SWIFT. In any case, the statements need to be imported in SAP. This can be achieved through e.g. transaction code FF.5. The most important parameters to understand here are the following:
Once these parameters are maintained in the import variant, the system will start to load the statements and generate the required postings.
Transaction code: FF.5
Now we can check if the memo records are updated in table FDES.
Subsequently, we can check the FF7BN report for grouping ‘CASHPOS’ and observe the output.
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
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