Liquidity Optimization with SAP Central Payments.

Dear,

Integration has always been the key word for SAP; 30 years ago we integrated Departments of Companies, 20 years ago we integrated Companies in Companies Groups, 10 years ago we integrated Companies Groups with other Companies Groups with intergroup processes.

Integration facilitates sharing information which is the basic requirement for efficiency, but implementing a fully integrated system presents challenges.

The best example of the SAP integration capabilities is the Single Global SAP System Instance Architecture which reduces Operational Costs and Increases Visibility of the Business Processes.

Implementing a Single Global SAP System Instance has become a common objective in most organizations but it requires time and budget due to organizational and cultural issues, Acquisitions, Merges, etc.

For this reason SAP has developed alternatives for partial integration technologies of business processes, which provide more limited efficiency than a Single Global System Instance, but require much less effort to implement.

SAP Central Finance is a great achievement in this area, and Central Payments a very good example of it.

The basic idea of the Central Payments functionality is integrating the Accounts Receivable and Accounts Payable business processes of a Companies Group in a Central Finance System, but keeping other business processes in the Local Satellite Systems, reducing the integration effort and speeding the integration project up.

This approach is compatible with the Global System Instance one, so the Program Manager can build a roadmap in which some affiliated companies are fully integrated and in others the integration is limited to the AP & AR functionalities in a first stage, followed by a full integration later in time.

When we enable the Central Payment functionality in a Company Code the System replicates the Open Items from the satellite system to the Central Finance System, and sets the status Technically Cleared in the Open Item of the satellite system, then the clearing process continues in the Centralized System.

SAP Central Payments also supports the integration with non-SAP System, but in this case the replication and technical clearing functionalities of the satellite system Open Items must be provided by a third-party or developed during the implementation project.

Building a Centralized Payments System has many advantages, amongst others.

• Liquidity Optimization.- With this approach we can have a Companies Group vision of the cash position. With this information the Central Treasury department can calculate the net liquidity gaps & surpluses of the group reducing the financial costs and improving the management of the short-term investment opportunities. This vision is limited to the short-term liquidity position, as commitments (sales orders, purchase orders, etc.) are not integrated in the current version of Central Payments.

• Additionally, we can implement In-House-Cash and Bank Communication Management functionalities on top of the Central Payments System for managing the intra-group lending requirements and reducing banking commissions and operational costs.

• Opens the gate for the Central Implementation of the newest SAP Leonardo most visionary functionalities like SAP Machine Learning Cash Application, deploying the capabilities of machine learning intelligence for the companies group open items and payment matching process.

Looking forward to reading your opinions.

K. Regards,

Ferran.

www.capitency.com

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Ferran.frances@capitency.com