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SAP Best Practices for Wholesale Distribution DE Scenario Overview W25 Inhouse Cash

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  • SAP Best Practices for Wholesale Distribution DE

    Scenario OverviewW25 Inhouse Cash

    SAP AG 2006 / W25 Inhouse Cash

    W25 In-House Cash OverviewSAP In-House CashOptimize your intra-group payment transactionsThe SAP In-House Cash application allows diversified companies to optimize their intra-group payment transactions by establishing an in-house bank. An In-House Cash Center is a virtual bank within the corporate group, with which each affiliated company having one ore more accounts. For the affiliated companies, the In-House Cash Center is just another house bank, which they use primarily to process payables and receivables involving other group companies. At the same time, you can set up accounts for external companies that are not associated with the group. This allows them to be included in the netting process.The In-House Cash Center is used to process all payments between company units, thus keeping cash resources within the group and optimizing how they are applied. This saves on the costs of external netting services and gives you greater flexibility when you process payment netting transactions.The SAP In-House Cash component allows companies with a diversified organizational structure to minimize the actual flow of cash and therefore reduce bank charges, interest expenses and losses resulting from delays in value-dating payments. It also helps to avoid many of the disadvantages associated with external clearing solutions, such as inflexible procedures with fixed dates and extra costs resulting from manual post processing. By managing accounts centrally, you can assure your company's ability to pay, optimize credit management, minimize interest expenses, and maximize interest revenues.

    SAP AG 2006 / W25 Inhouse Cash

    W25 In-House Cash OverviewW25 In-House CashThe SAP Best Practices scenario for FSCM in-house cash supports the optimization of cash flow within Wholesale companies by enabling the centralization of payments within a group of subsidiaries. In this scenario the parent company serves as an internal bank for the subsidiaries. All incoming and outgoing payments with external entities are processed through the In house cash center of the parent company. The In-House Cash Center is used to manage all payments between company units and thus keeping cash resources within the group and optimizing how they are applied.The W25 scenario focuses on the following processes:External Incoming payment via In-House CashExternal outgoing payment via In-House CashInternal payments

    SAP AG 2006 / W25 Inhouse Cash

    W25 In-House Cash OverviewBusiness ViewSAP In-House Cash is a solution for companies that operates globally to manage their intra-group and external payment transactions more efficiently.IHC is set up at the group headquartersIHC is a virtual bank where subsidiaries have current accountsThe In-House Cash Center is used to process all payments between company units, thus keeping cash resources within the group and optimizing how they are applied. controls payment transactions on a regional and global levelprocesses internal payment transactions on a cost-effective basisreduces the amount of external bank accounts neededoptimizes cross-border payment trafficautomates and standardizes business processescash resources are kept within the group

    SAP AG 2006 / W25 Inhouse Cash

    Current SituationInternal BankInternal BankSubsidiarySubsidiarySubsidiaryHead officeSubsidiarySubsidiaryRegion 1Region 2SubsidiaryUSAsiaVarious and ever-changing multi-national corporate group structures . . .. . . with a high volume of internal and external payment transactionsSubsidiary

    SAP AG 2006 / W25 Inhouse Cash

    Organizational entities: Operative subsidiaries 1,2,3...The IHC Center and the financial accounting department are situated within the head officeThe IHC Center (manages the subsidiary current accounts)The financial accounting department manages the chart of accounts and the general ledger balances. Corporate GroupSubsidiary 3Subsidiary 2Subsidiary 1Organization entities - Overview

    SAP AG 2006 / W25 Inhouse Cash

    Business View External Incoming paymentBusiness BenefitsBusiness BenefitsBank of In-House Cash centreSubsidiaryIHC centreRadically decrease of number of external bank accounts

    Automatic transfer of balances to Financial Accounting increases internal efficiency

    Reduction of costs of external incoming payment traffic

    Create internal statement of accounts(4)Bank statement posted in IHC centre.(3)Process customer invoice(1)Receive incoming payment(2)Bank sends an account statementReconcile and post internalStatement of account(5)Periodic sweeping of intercompany accounts

    SAP AG 2006 / W25 Inhouse Cash

    Process: External Incoming Payments via IHCExternal business partner Pmnt programOPHead officehouse bankExample: Partner pays subsidiary 1 Corporate Group

    SAP AG 2006 / W25 Inhouse Cash

    Business View External outgoing paymentBusiness BenefitsBusiness BenefitsBank of In-House Cash centreSubsidiaryIHC centreRadically decrease of number of external bank accountsMaximize interest gains. Provision of the latest data on the cash flows and account movementsAutomatic transfer of balances to Financial Accounting increases internal effiency

    Savings on international payment transactions

    Enables the company to optimize their foreign exchange positions and reduce currency exposureFramework for improvement in the efficiency of group payment processing

    Create internal statement of accounts(6)Bank statement posted in IHC centre.(5)Process external vendor invoice(1)Bank sends an account statementReconcile and post internalStatement of account

    Create external vendorPayment file(2)Debit intercompany and clearing partner account(3)Create central payment file(4)Execute payment to vendorPeriodic sweeping of intercompany accounts

    SAP AG 2006 / W25 Inhouse Cash

    In-House Cash Process: External outgoing paymentExternal business partnerHead officehouse bankExample: Subsidiary 1 makes a payment to an external partner Corporate Group

    SAP AG 2006 / W25 Inhouse Cash

    Business View Internal paymentBusiness BenefitsBusiness BenefitsSubsidiarySubsidiaryIHC centreFree selection of payment conditions Any surplus cash can be used for financing purposes within the group, thereby curbing the margin between debit and credit interest ratesCredit can be granted to subsidiaries in need of financial assistance

    No physical payments are made since the payments are processed via internal accountsManaging the accounts centrally eliminates any bank transfer charges Larger investments for the subsidiaries at attractive interest rates. Improvement in the interest revenueLiquid funds remain within the group without incurring any value-date losses

    Customer O/I clearing and reconciliation

    Reconcile and post internal statement of account

    Process customer invoice(1)Process external vendor invoice(2)Create external vendorPayment file(3)Debiting/Crediting intercompany accounts(4)Create internalstatement of accounts for the subsidiaries(5)Periodic sweeping of intercompany accounts

    SAP AG 2006 / W25 Inhouse Cash

    In-House Cash Process: Internal PaymentPmnt ProgramExample: Subsidiary 1 makes a payment to Subsidiary 2 Corporate GroupSubsidiary 3Subsidiary 2Subsidiary 1

    SAP AG 2006 / W25 Inhouse Cash

    In-House Cash : Technical OverviewIHC Bank statementEDIIncoming paymentsBank statementG/LRFCIDOCPayment programFinancial Accounting

    PAYRQElectronic bank statementGeneral LedgerBAPIIDOCIDOCEDIOutgoing paymentsHouse bankHouse bank

    SAP AG 2006 / W25 Inhouse Cash

    Copyright 2006 SAP AG. All Rights ReservedNo part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.Microsoft, Windows, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, and Informix are trademarks or registered trademarks of IBM Corporation.Oracle is a registered trademark of Oracle Corporation.UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc.HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc.JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. MaxDB is a trademark of MySQL AB, Sweden.SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

    The information in this document is proprietary to SAP. No part of this document may be reproduced, copied, or transmitted in any form or for any purpose without the express prior written permission of SAP AG.This document is a preliminary version and not subject to your license agreement or any other agreement with SAP. This document contains only intended strategies, developments, and functionalities of the SAP product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that this document is subject to change and may be changed by SAP at any time without notice.SAP assumes no responsibility for errors or omissions in this document. SAP does not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this material. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or non-infringement.SAP shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. This limitation shall not apply in cases of intent or gross negligence.The statutory liability for personal injury and defective products is not affected. SAP has no control over the information that you may access through the use of hot links contained in these materials and does not endorse your use of third-party Web pages nor provide any warranty whatsoever relating to third-party Web pages.

    1The development of R/3 functions for the aftermarket was announced during the public launch of the SAP Automotive Solution Map. The automotive business focuses on activities such as buying and selling new and used vehicles and spare parts, vehicle modification, service, warranty processing, and financing.Release 2.0 of SAP Automotive will map the typical processes of an importer. The core development in this release is the Vehicle Locator, which is intended to be an initial step towards R/3 functions that can be used both in an R/3 System and through an Internet application. The entire structure of the trade will be mapped in future releases. The Vehicle Locator is a workbench running on an importer's SAP R/3 System. The Vehicle Locator functions can not only be executed by users working for the importing company, but also by users of the individual dealers assigned to the importer. Using the Vehicle Locator, the importer can enter planned vehicles in his system without creating a purchase order. All planned vehicles, representing the complete pipeline, are shown as entries in a central vehicle database. Based on this information, different functions such as search, reservation, or assignment to a sales order are available. Using the Internet interface, a dealer can log onto the importer's R/3 System and work with the functions assigned to him. All the dealer needs on site is a Web browser. The process of selling a vehicle is kicked off by qualifying the customer's wishes. In direct conversation with the customer, the sales representative determines which vehicle the customer wishes to purchase. The customer chooses the car model, the year, the features, the color, the interior design and special features offered by the manufacturer or the dealer. If a new vehicle is configured (that is, if the dealer does not search the inventory for existing cars), the overall configuration should not only be accompanied by a price calculation, but also by a technical feasibility check. After completing the vehicle configuration, the customer data is entered, a used car trade-in is taken into account, if applicable, and customer discounts are applied. Both the dealer price and the retail price can be displayed. In the end, the sales representative can try to locate the desired vehicle by searching the importer's pool of vehicles in stock. In the vehicle database, both the importer and the dealer have access to current status information for all vehicles through status messages such as: Ordered Scheduled In production Production completed Transport/delivery (location) Transportation planning Monitoring incoming transports (vessels) Parking space requirements planning Vehicle tracking allows the importer and the dealer to check at any time where a vehicle is located and for when the delivery is scheduled. It is, therefore, possible to recognize delays early and communicate them to the customer.The development of R/3 functions for the aftermarket was announced during the public launch of the SAP Automotive Solution Map. The automotive business focuses on activities such as buying and selling new and used vehicles and spare parts, vehicle modification, service, warranty processing, and financing.Release 2.0 of SAP Automotive will map the typical processes of an importer. The core development in this release is the Vehicle Locator, which is intended to be an initial step towards R/3 functions that can be used both in an R/3 System and through an Internet application. The entire structure of the trade will be mapped in future releases. The Vehicle Locator is a workbench running on an importer's SAP R/3 System. The Vehicle Locator functions can not only be executed by users working for the importing company, but also by users of the individual dealers assigned to the importer. Using the Vehicle Locator, the importer can enter planned vehicles in his system without creating a purchase order. All planned vehicles, representing the complete pipeline, are shown as entries in a central vehicle database. Based on this information, different functions such as search, reservation, or assignment to a sales order are available. Using the Internet interface, a dealer can log onto the importer's R/3 System and work with the functions assigned to him. All the dealer needs on site is a Web browser. The process of selling a vehicle is kicked off by qualifying the customer's wishes. In direct conversation with the customer, the sales representative determines which vehicle the customer wishes to purchase. The customer chooses the car model, the year, the features, the color, the interior design and special features offered by the manufacturer or the dealer. If a new vehicle is configured (that is, if the dealer does not search the inventory for existing cars), the overall configuration should not only be accompanied by a price calculation, but also by a technical feasibility check. After completing the vehicle configuration, the customer data is entered, a used car trade-in is taken into account, if applicable, and customer discounts are applied. Both the dealer price and the retail price can be displayed. In the end, the sales representative can try to locate the desired vehicle by searching the importer's pool of vehicles in stock. In the vehicle database, both the importer and the dealer have access to current status information for all vehicles through status messages such as: Ordered Scheduled In production Production completed Transport/delivery (location) Transportation planning Monitoring incoming transports (vessels) Parking space requirements planning Vehicle tracking allows the importer and the dealer to check at any time where a vehicle is located and for when the delivery is scheduled. It is, therefore, possible to recognize delays early and communicate them to the customer.The development of R/3 functions for the aftermarket was announced during the public launch of the SAP Automotive Solution Map. The automotive business focuses on activities such as buying and selling new and used vehicles and spare parts, vehicle modification, service, warranty processing, and financing.Release 2.0 of SAP Automotive will map the typical processes of an importer. The core development in this release is the Vehicle Locator, which is intended to be an initial step towards R/3 functions that can be used both in an R/3 System and through an Internet application. The entire structure of the trade will be mapped in future releases. The Vehicle Locator is a workbench running on an importer's SAP R/3 System. The Vehicle Locator functions can not only be executed by users working for the importing company, but also by users of the individual dealers assigned to the importer. Using the Vehicle Locator, the importer can enter planned vehicles in his system without creating a purchase order. All planned vehicles, representing the complete pipeline, are shown as entries in a central vehicle database. Based on this information, different functions such as search, reservation, or assignment to a sales order are available. Using the Internet interface, a dealer can log onto the importer's R/3 System and work with the functions assigned to him. All the dealer needs on site is a Web browser. The process of selling a vehicle is kicked off by qualifying the customer's wishes. In direct conversation with the customer, the sales representative determines which vehicle the customer wishes to purchase. The customer chooses the car model, the year, the features, the color, the interior design and special features offered by the manufacturer or the dealer. If a new vehicle is configured (that is, if the dealer does not search the inventory for existing cars), the overall configuration should not only be accompanied by a price calculation, but also by a technical feasibility check. After completing the vehicle configuration, the customer data is entered, a used car trade-in is taken into account, if applicable, and customer discounts are applied. Both the dealer price and the retail price can be displayed. In the end, the sales representative can try to locate the desired vehicle by searching the importer's pool of vehicles in stock. In the vehicle database, both the importer and the dealer have access to current status information for all vehicles through status messages such as: Ordered Scheduled In production Production completed Transport/delivery (location) Transportation planning Monitoring incoming transports (vessels) Parking space requirements planning Vehicle tracking allows the importer and the dealer to check at any time where a vehicle is located and for when the delivery is scheduled. It is, therefore, possible to recognize delays early and communicate them to the customer.