FS242_EN_Col95

SAP AG 2010

FS242 Banking services from SAP-SAP Deposits Management for BankingFS242Banking services from SAP SAP Deposits Management for

Banking

Material number: 50098501 Version: 95

I n t e r n a l U s e S A P P a r t n e r O n l y I

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SAP 2008

Copyright 2010 SAP AG. All rights reserved.

Neither this training manual nor any part thereof maybe copied or reproduced in any form or by any means,or translated into another language, without the priorconsent of SAP AG. The information contained in thisdocument is subject to change and supplement without prior notice.

All rights reserved.

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SAP AG 2010

Course Prerequisites

Required Knowledge Fundamental Banking Knowledge SAP125 SAP Navigation 2005 FS240 Banking services from SAP Basics and Generics in Transaction

Banking

Recommended Knowledge SAP01 SAP Overview


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SAP AG 2010

Target Audience

This course is intended for the following audiences: Banking Consultants Project Team Members

Duration: 4 days

User notes y These training materials are not a teach-yourself program. They complement the explanations

provided by your course instructor. Space is provided on each page for you to note down additional information.

y There may not be sufficient time during the course to complete all the exercises. The exercises provide additional examples that are covered during the course. You can also work through these examples in your own time to increase your understanding of the topics.


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SAP AG 2010

Course Overview

Contents: Course Goals Course Objectives Course Content Course Overview Diagram


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SAP AG 2010

Course Goals

This course will prepare you to: Understand the key features and processes of Deposits Management module. Understand the key features and processes of Card Management module. Understand the key features and processes of Master Contract Management

module.


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SAP AG 2010

Course Objectives

After completing this course, you will be able to: Understand and configure the different deposits products and relevant financial

conditions: checking accounts, time deposits, savings accounts with notice, and savings schemes.

Execute the processes relevant for deposits products. Understand how the system handles the card master data and the

corresponding processes. Explain the concept of the account pools and how they serve different business

purposes. Configure special products for account pools. Understand the various options that are available for customers to support their

liquidity management processes: effective cash pooling and charge and interest compensation.

Know the basic functions and processes in the area of facilities. Explain the discounting functions: bundle pricing, discount and rebate

calculation . Explain the functions of overdraft protection.


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SAP AG 2010

Course Overview

Module: Deposits Management

Module: Card Management

Module: Master Contract Management

Conclusion

Preface

Appendices

Course Content


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SAP AG 2010

Course Overview Diagram

Unit 1: Demand Deposits

Unit 3: Notice Deposits: Savings Account with Notice

Unit 2: Time Deposits

Unit 4: Notice Deposits: Savings Scheme

Unit 6: Special Conditions

Unit 5: Special Orders



Unit 7: Card and Card Pool Products

Unit 8: Card Processing and Operations


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SAP AG 2010

Course Overview Diagram

Unit 9: Concept of Master Contract Management

Unit 11: Charge and Interest Compensation

Unit 10: Effective Cash Pooling

Unit 12: Facilities

Unit 13: Combined Statement

Unit 14: Bundle Pricing

Unit 15: Overdraft Protection



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SAP AG FS242 1-1

SAP AG 2010

Demand Deposits Overview: Functional Blocks

Product Configuration Financial Conditions/ Pricing

Item Management/Payment Services

Contract Management

Posting Control Processing/Exception Handling

Order Management/Business Operations

CurrencyConversion

Posting LockManagement Settlement

Master Contract Management

PoolingCombined Settlement

Credit Facilities/Global Limits

Billing and Invoicing Payment DistributionOpen Item

Management

FinancialCustomer

InformationManagement

Accounting

Collateral

Payment Distribution& Monitoring

Cash Flow

Cor

resp

onde

nce

Periodic Processing

ReportingDouble,Triple,

Quadruple Control

ArchivingInsurance

This is an overview of the functional blocks that are used in the operational business covered by banking services from SAP

banking services from SAP provides banks with core functions in banking Left: y Dark grey: NetWeaver tools that provide generic functions for banking services from SAP

Middle: y Light grey: Generic features & functions within banking services from SAP: These functions are used

for managing deposits, loans, cards, and master contracts (in SAP Deposits Management and SAP Loans Management for Banking) y Petrol: Special functions used for loans y Violet: Special functions used for master contracts

Right: Integration to other applications: y Applications within banking services from SAP (SAP Collateral Management for Banking,

Accounting) y Applications outside banking services from SAP (Insurance) y FS-BP is already integrated within banking services from SAP y Petrol, light grey: see above (middle) y Dark grey: see above (left)


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SAP AG FS242 1-2

SAP AG 2010

Demand Deposits: Course Overview Diagram




Unit 4: Notice Deposits: Savings Plan







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SAP AG FS242 1-3

SAP AG 2010

Demand Deposits: Objectives

After completing this unit, you will be able to: Recognize types of demand deposits Understand the basic features of current account contracts Define tolerated limits for an account Define access limits for an account Create a direct debit order Define the permitted combinations of transaction type groups and media Explain how to issue a balance confirmation for the account


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SAP AG FS242 1-4

SAP AG 2010

Demand Deposits: Business Example

Mr. Adams comes to the ABC bank to open a new current account. He

receives an tolerated limit of EUR 1,000.

He also requests a direct debit order to enable the direct payment of

his telephone bill.


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SAP AG FS242 1-5

SAP AG 2010

Demand Deposits: Table of Contents 1

Demand Deposits

Lesson 2: Current Account Features

Lesson 1: Demand Deposits Overview and Usage

1.2. Definition of Demand Deposits

1.1. Types of Deposits

1.3. Contract Characteristics

2.1. Tolerated Limit

2.2. Access Limits

1.4. Product Configuration

2.4. Transaction Type Groups/ Media

2.3. Direct Debit Order

2.5. Balance Confirmation

2.6 Credit Standing Review


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SAP AG FS242 1-6

SAP AG 2010


Demand Deposits



1.2. Definition of Demand Deposits

1.1. Types of Deposits




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SAP AG FS242 1-7

SAP AG 2010

Demand Deposits Overview and Usage: Types of Deposits

CurrentAccount

CheckingAccount

TimeDeposits

DemandDeposits

Fixed-TermDeposits

SavingsScheme

Special Conditions

Notice Deposits

Savings Account

with Notice

SavingsAccount

Special Orders

Demand Deposits y Examples for Demand Deposits:

- Current Account/Checking Account (identical functions in banking services from SAP) Deposited funds can be withdrawn at any time without any notice to the depository institution Allows customers to distribute money directly to others Offers the facilities for arranging standing orders, direct debits, etc. Checking Account (used mainly in the USA) allows the account holder to use personal checks in

place of cash to pay debts - Savings Account (also known as Instant Access Savings, for example, in Great Britain)

Enables immediate withdrawals without notice Offers higher interest than current accounts Cannot be used for direct debits or paying bills, and most do not offer check books or cash cards

Notice Deposits y Examples for Notice Deposits:

- Savings Account with notice Offers higher interest than current accounts No fixed maturity


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SAP AG FS242 1-8

Access to the funds is restricted as all or part of the deposit is subject to notice If withdrawals are made without prior notice, the customer is usually penalized with an interest

penalty - Savings Scheme (also known as Installment Savings Scheme)

Payment agreement with the customer for a fixed period, for example, a minimum monthly installment of EUR 100 for 25 years

Access to funds is restricted as all or part of the deposit is subject to notice Increasing bonus for the amount saved each year

Fixed-Term Deposits y Time Deposit

- Funds deposited at a financial institution for a fixed period of time - Interest rate is fixed for the complete term - Fixed term can range from a few days to a few years - Money can be withdrawn after the term has ended


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SAP AG FS242 1-9

SAP AG 2010

Demand Deposits Overview and Usage: Definition of Demand Deposits

Used for business operations and payment transactions, for example, money transfers, standing orders, direct debits.

Credit interests: low or no interest at all

Can be overdrawn

Can offer tolerated limits

The purpose is to build up capital and property

Not normally used for business operations or payment transactions

Offers higher credit interest than current accounts

Normally cannot be overdrawn

Demand Deposits

Current Account / Checking Account Savings Account

You can withdraw the funds from demand deposits at any time.

Checking Accounts are used mainly in the USA. The account holder uses personal checks in place of cash.

From a technical perspective, the current account, checking account, and savings account products are very similar. The only differences are in the activation of some of the product attributes (for example limits) that are described on the following pages.


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SAP AG FS242 1-10

SAP AG 2010

Demand Deposits Overview and Usage: Contract Characteristics 1

Current Account .. .. .. .. ..

Basic Data Business Partner Correspondence Recipient Financial Conditions Settlement Limits Access Limits Bank Statement Balance Confirmation Account Closure Transaction Type Groups/ Media Features Direct Debit Order Credit Standing Review Posting Data Events Related Contracts Management Data Additional Management Data Payment Details

Current /Checking Account: Account Master Data

Current Account/ Checking Account:

In the product configuration (Customizing), you need to activate the attributes that are listed in the figure above.

The highlighted attributes are particularly relevant for Current Accounts. Current Account features are described in detail in Lesson 2.


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SAP AG FS242 1-11

SAP AG 2010

Savings Account .. .. .. .. ..

Demand Deposits Overview and Usage: Contract Characteristics 2

Basic Data Business Partner Correspondence Recipient Savings Book Contract Relationships Dependent Card Financial Conditions Settlement Access Limits Bank Statement Balance Confirmation Account Closure Transaction Type Groups/ Media Features Posting Data Events Related Contracts Management Data Additional Management Data Payment Details

Savings Account: Account Master Data

Savings Account: In the product configuration (Customizing), you need to activate all attributes that are listed in the figure

above. The highlighted attributes are particularly relevant for Savings Accounts: Savings Book A savings book can be issued for a savings account if required. If this is the case, you

do not send a bank statement to the customer. Dependent Card A savings card can be issued for savings account if required. If this function is

chosen, the card can be created automatically as soon as the account is created. If this attribute is active, the Contract Relationships tab page also appears in the account master data.

Access Limits This attribute allows you to restrict access to funds on the account. For example, you can limit the number of bank transfers per month, or limit the number and/or value of cash withdrawals by using a savings card.

Transaction Type Groups/ Media You can limit the permitted transaction types, and the media by which the transactions are carried out, for example, online banking, text messages, call centers, and so on.

Minimum Deposit You can define the minimum deposit amount (for each currency) that must always be deposited on the account (Note; This is only the product configuration setting that is not visible in the account master data). On the other hand, you need to deactivate some current account attributes. These include, for example, limits, direct debits, standing orders, and credit standing reviews. Some of the attributes listed above, such as Savings Book and Minimum Deposit, are also typical attributes of Notice Deposits. They are discussed in detail in Unit 3. The focus of this unit is the current account product.


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SAP AG FS242 1-12

SAP AG 2010

Demand Deposits Overview and Usage:Product Configuration

Attribute 1Attribute 2Attribute 3Attribute 4Attribute 5

Product

Limits Access Limits Balance Confirmation Transaction Type Groups/ Media Direct Debit Order Credit Standing Review

Limits Committed Limit Tolerated Limit Minimum/ Maximum Settings for Limits

Seasonal Limits Extra Amount Access Limits (Turnover-based) Access Limits (Counter-based) Balance Confirmation Transaction Type Groups/ Media Direct Debit Order Credit Standing Review Standing Order Control Indicator for Limit

Current Account .. .. .. .. ..

Product attributes:

Limits and Seasonal Limits You can permit overdrafts by defining various account limits Extra Amount This is a small amount that you can specify in addition to the available amount Access Limits (Turnover-based and Counter-based) You can restrict the money flow by the

definition of access limits

Balance Confirmation You can issue the account balance confirmation for the customer Transaction Type Groups/ Media - You can limit the permitted transaction types and the medium by

which the transactions can be carried out

Direct Debit Order You can store data for the direct debit order procedure Credit Standing Review You can store the periodicity and the other data for the standing review Standing order - You need to activate the Standing Order feature for the account product. You cannot

create a standing order for the account, unless this feature is enabled in the underlying account product. For information about how to create a standing order, refer to the unit Item Management and Payment Services in the course module Generic Functions and Features.

Control Indicator for Limit You can activate or deactivate the limit check for an account. You can find this attribute in the product tree under Cross Control Attributes Control Indicator for Limit.


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SAP AG FS242 1-13

SAP AG 2010


Demand Deposits Accounts



2.1. Tolerated Limit

2.2. Access Limits

2.4. Transaction Type Groups/ Media

2.3. Direct Debit Order

2.5. Balance Confirmation

2.6. Credit Standing Review


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SAP AG FS242 1-14

SAP AG 2010

Current Account Features: Overdraft Limits 1

Limit Types

The amount exceeding the balance that the account holder can withdraw The limit amount is usually agreed upon with the account holder The customer pays debit interest for the used limit amount

Committed limit

This amount can be withdrawn in addition to the credit balance and any committed limit

The account holder is not usually notified of this limit The customer pays overdraft interest for the utilized portion of the tolerated limit The overdraft interest rate is usually higher then the debit interest rate

Tolerated limit

Limit Check Indicator

To activate the limit check for the account, you need to select the Limit Check Indicator (Limit Check = 001 Active) on the Limit tab page in the account master data.

If the indicator is deactivated, the limits are not checked, even though they have been defined. If this is the case, the system permits unlimited withdrawals.


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SAP AG FS242 1-15

SAP AG 2010


Limit Types

This limit is granted in addition to the committed limit or the tolerated limit It has a validity period This applies to a one-time or recurring period within the seasonal limits validity; For

example, a company may need an increased limit at the end of every month It is always linked to the the account limit: committed or tolerated limit Multiple seasonal limit agreements can exists simultaneously

Seasonal Limit:

A small amount that you can specify in addition to the available amount (internal) It is taken into account by posting control if payment transactions are delivered

externally

Extra Amount

Seasonal Limits If multiple seasonal limits are valid simultaneously, the seasonal limit category is used to define whether

the system includes the sum of all seasonal limits or only the highest seasonal limit. This means there are two categories of seasonal limits:

Additional seasonal limit - The system adds the amount of the seasonal limit to the total number of all valid seasonal limits based on the same limit category. This limit category can also be used to reduce account limits (committed limit or tolerated limit).

Integrated seasonal limit - The system checks all the valid seasonal limits of the integrated category and determines the seasonal limit with the highest amount. The system adds this amount to the valid account limits (committed and /or tolerated limit). The seasonal limits of the integrated category cannot be used to reduce existing seasonal limits.

Extra Amount You can specify the extra amount in the account product configuration. It cannot be changed and is also

not visible in the account master data. Extra Amount is taken into account by posting control if payment transactions are delivered externally. It

provides a small additional overdraft allowance for an account, and as a result it lets you avoid manual processing of payments that only slightly exceed the account limit.

For each currency, you can define : y An Extra Amount (or Minimum extra amount if you have specified an extra percentage rate) y An Extra Percentage Rate You can define an extra amount as a percentage rate of the total credit

limits (such as the committed limit and tolerated limit) y Maximum Extra Amount You use this to limit the extra amount if you have specified an extra

percentage rate.


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SAP AG FS242 1-16

SAP 2010


Example: Account Limits

t

Amou

nt (E

UR

)

1,000

1,200

AugJul Sept Oct Nov Dec Jan

2,200

1,700 Available Limit forthe account

Committed limit

Tolerated limit

Seasonallimit valid from 07/15 to 08/31

Seasonal limit valid from 10/01 Seasonal

limit valid each Dec.

0

Example: Account Limits

The total available account limit consists of:

Committed limit = EUR 1,000 Tolerated limit = EUR 200 Seasonal limits: y Seasonal limit valid from July 15th to August 31st = EUR 1,000 y Seasonal limit valid from October 1st = EUR 500 y Seasonal limit valid each December = EUR 1,000

Note: The seasonal limits in the figure above are from the Integrated category. It means that if there are multiple seasonal limits valid at the same time, only the highest limit amount is taken into account, and added to the sum of committed and tolerated limits:

y MAX (Seasonal limit valid each December = EUR 1,000; Seasonal limit valid from October 1st = EUR 500) = EUR 1,000


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SAP AG FS242 1-17

SAP AG 2010

Current Account Features: Tolerated Limits

Account Balance Today

Balance of Future Items

Original Subject to Final Payment Balance

Additionally Available Amount

Prenote Balance

Committed Limit

Tolerated Limit

Extra Amount

Minimum Deposit

Tolerated Limits increase the Available Amount of the account

Available Amount

+ EUR 4,000.00

EUR 0.00

EUR 0.00

EUR 0.00

EUR 0.00

+ EUR 1,000.00

+ EUR 100.00

+ EUR 10.00

- EUR 0.00

Available Amount EUR 5,110.00

The Available Amount is the amount that someone authorized to access an account can utilize. In the example, the account balance of EUR 4,000 is increased by the sum of the committed limit (EUR

1,000), the tolerated limit (EUR 100), and the extra amount (EUR 10). As a result, the available amount is EUR 5,110.


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SAP AG FS242 1-18

SAP AG 2010

Current Account Features: Access Limits 1

An access limit is the value-related or volume-related restriction of turnovers for an account within a defined period.Definition:

Access limits are defined as: Turnover class based (for example, an account for a minor,

direct debit liability) Counter based (for example, number of ATM withdrawals)

Access limits are based on the balance category Credit balance / debit balance

Access limits are calculated based on a comparison date Posting date / value date

You can define the number of periods, the period unit, and limit amount in the account contract

Characteristics

When an access limit has been exceeded, the processing of the item is controlled by posting control rules.

Result

Access limits are required in item processing for the access limit check. banking services from SAP checks whether the posting amount or the number of postings would result in

exceeding the Access Limit that is defined on the account. You can set the Access Limit Check indicator in the configuration of each transaction type.

If the Access Limit is exceeded by an additional turnover (turnover-based access limits) or counter (counter-based access limits), processing of the item is controlled accordingly. banking services from SAP generates an error message that is evaluated by the posting control rules.


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SAP AG FS242 1-19

SAP AG 2010


Turnover-Based Access Limits

Access Limit Type No. of Period Period Unit Limit Amount Currency

PL001 ATM Withdrawal 1 Week (7 days) 2,000 EUR

PL002 POS Transaction 1 Month (30 days) 10,000 EUR

Access Limit Type No. of Period Period UnitCounter Reading

AC001 Cash Withdrawal 1 Calendar day 5

AC002 Funds Transfer 1 Calendar month 10

Counter-Based Access Limits


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SAP AG FS242 1-20

SAP AG 2010


t1 t2 t

= Access Limit

Period Acct Limit

Posting 1

Posting 2

Posting 3

Posting 4

Posting 1

Posting 2

Posting 3

Amou

nt

Exceeding the Access Limit will be interpreted by

Posting Control Rules

Posting 4

Posting 5

The Access Limit is notexceeded.

No posting error according to the Access Limit

Posting 5

t0

This is an example of using turnover classes for access limit. Access limits can be used, for example, to limit the available funds if this is an account for minors. The adolescent is allowed to withdraw the specified amount of money within a specified period of time, for example, EUR 100.00 in each calendar month.

One or more turnover classes can be assigned to an access limit. banking services from SAP checks whether the posting amount would result in exceeding the Access

Limit that is defined on the account.

If the access limit is exceeded by an additional turnover, processing of the item is controlled accordingly. The system generates an error message that is interpreted by the posting control rules.


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SAP AG FS242 1-21

SAP 2010

Current Account Features: Direct Debit Order 1

DD Order Payment Recipient Max. Debit Amount Currency DD Ref. No.

000001 Telecom 250 EUR 667 890 331

000002 Telecom 500 EUR 171 908 252

Direct Debit Order A direct debit order is an instruction that an account holder (payer) gives to his or her bank

allowing the payee to make collections directly from his or her account. The money transfer is initiated by the beneficiary (payee).

Usage Direct debits and direct debit orders are typically used to make recurring payments for credit

card or utility bills. Unlike standing orders, which require the amounts to be fixed, direct debits can be used for varying amounts; the payee can simply specify a different amount each time.

Direct Debit Authorization

A payee must be authorized to collect funds from the payer's account. There are two methods for setting up the authorization:

Collection authorization procedure (also called direct debit in some countries) only involves the payer and the payee. The payer simply authorizes the payee to collect the amounts due from his or her account. As the payer's bank is not involved, it can not check the payee's authorization, so other safeguards are required.

Direct debit order procedure also involves the payer's bank. It requires the payer to instruct his or her bank to honor direct debit notes from the payee. The payee is then notified that he or she is now authorized to initiate direct debits transfers from the payer.

Within banking services from SAP you can store the authorization details for the direct debit order in the account master data (payer side). Payment recipient (also called payee) can be restricted by the:

y Direct debit order number that specifies the sequential number of a direct debit order. The system assigns this automatically when you create a new direct debit order.

y Payment recipient that specifies the name or an alias of the presenter of the debit who is authorized to collect funds from this account as part of the direct debit order.

y Maximum amount that specifies the maximum permitted amount that the payment recipient can collect using debit collection from the account of the paying party as part of the direct debit order. Entering the maximum debit amount is optional.

y Reference number of the direct debit order that is optional. It gives the bank additional information.


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SAP AG FS242 1-22


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SAP AG FS242 1-23

SAP 2010


Underlying Transaction

Flow of Funds

Initiation

Advices bank to authorize: Allowed payees Allowed debit amounts

Direct Debit

Direct Debit Order

Payees BankPayers Bank

PayeePayer

Informa

tion ab

out

the au

thoriza

tion

For the direct debit order procedure, the payee undertakes to collect funds only from the accounts of paying party (payer) with whom debit collection has been agreed upon. The payee must also have given his bank (in this case the collecting bank) a corresponding direct debit order. The payer has no right of objection.


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SAP AG FS242 1-24

SAP 2010


Underlying Transaction

Collection Authorization

Flow of Funds

Initiation

Direct Debit

Collection Authorization Procedure

Payees BankPayers Bank

PayeePayer

"

Rig

htof

ob

ject

ion

For the collection authorization procedure the payee undertakes only to present debit collections for due payables if he has written collection authorization. The account holder (payer) authorizes a particular payee to collect the money directly from his or her account.

The payer can advice his bank to reject the transaction, if it comes from the not authorized payee.


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SAP AG FS242 1-25

SAP AG 2010

Current Account Features: Transaction Type Groups/ Media

Transaction Type Group/Medium Matrix Controls which payment services are available for an account Is predefined in the product configurator Lets you activate or deactivate combinations of transaction type groups and media in the

account master data: Changeable combinations open padlock Not changeable combinations closed padlock

Transaction Type Groupfor Posting Check

Media

Internal Document Internet

0100 Bearer Check

0400 Debit Collections

1100 Credits from Bank Transfers

You define the default values for the permitted combinations of transaction type groups and media in the product configuration.

In the account master data, you can deactivate (red traffic light) or activate (green traffic light) all changeable combinations of transaction type groups and media (open padlock). You have the following options:

y You can activate or deactivate individual combinations of transaction type groups and media by changing the traffic light in the respective matrix element.

y You can simultaneously activate or deactivate all the media assigned to a particular transaction type group by changing the traffic light for the transaction type group.

y You can simultaneously activate or deactivate all the transaction type groups assigned to a particular medium by changing the traffic light for the medium.

y You can activate or deactivate the entire matrix in one step by changing the traffic light for the matrix.


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SAP AG FS242 1-26

SAP AG 2010

Current Account Features: Transaction Type Groups/ Media

Characteristics Current AccountsTime

DepositsNotice

DepositsUsed as transactional account yes no no

Collection authorization/ direct debit order possible

yes no no

Standing orders possible yes no no

Availability of funds immediate on maturity according to notice rules

Access to funds:

Savings book no no yes

Savings card no no yes

Debit card yes no no

Check payments yes no no

Productcharacteristics


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SAP AG FS242 1-27

SAP AG 2010

Current Account Features:Balance Confirmation

A Balance Confirmation is a legally binding letter sent to customer that includes the following data: Balance of the account on the day the letter was generated Interest results since the last balance confirmation letter (optional)

Usage

In some countries there is a legal requirement for tax authorities to provide a customer with balance confirmation at the end of each fiscal year.

Prerequisites:

To issue a balance confirmation, you need to activate the following product attributes: y Correspondence Recipient y Balance Confirmation.


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SAP AG FS242 1-28

SAP AG 2010

Current Account Features: Credit Standing Review

A Credit Standing Review lets you adjust account master data such as limits, conditions, and access limits on a periodic basis, depending on the credit standing data of the account holder.

Credit standingof a customer

Account #1223345

Credit standingreview data

BP

Account #1223345Credit Standing

Review process Adjustment of relevant account master data

You use the Credit Standing Review to change the account master data (such as limits, conditions, or access limits) based on the account holders credit standing data. The process runs periodically according to the credit standing data of the contract. There you can also find indicators to control which data is to be changed.

You can execute a Credit Standing Review for a single account, choose: SAP Menu Financial Services Account Management Account Credit Standing Review Check Credit Standing Review for an Account.

Or you can execute this function as mass run. Choose: SAP Menu Financial Services Account Management Periodic Tasks Credit Standing Review Execute Credit Standing Review for Accounts.

This process is executed by three user exits (BAdIs), of which the first two have a sample implementation:

y The first to get the credit standing data form a business partner master data y The second to calculate the new master data for an account y There is also a third customer exit that enables the implementation of additional functions for other

data.


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SAP AG FS242 1-29

SAP AG 2010


Demand Deposits


Lesson 3: Check Management

Appendix: Configuration

Lesson 1: Introduction


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SAP AG FS242 1-30

SAP AG 2010

Appendix: Configuration 1

You can maintain the following settings:

Tolerated Limits You can adjust the names of limits according to your requirements. It is also possible to

create and implement additional customer-specific types of limits.

Access Limits You need to define the turnover classes-based access limits and counter-based access limits.

Tolerated Limits:

y SAP IMG Financial Services Account Management Product Management Limits Edit Description of Standard Limit Categories

y SAP IMG Financial Services Account Management Product Management Limits Edit Customer Limit Categories

Access Limits:

y SAP IMG Financial Services Account Management Item Management Basic Features Turnover Classes for Flexible Account Balances Edit Access Limit Types y SAP IMG Financial Services Account Management Item Management Basic Features

Counters Edit Access Limit Types Credit Standing Review:

y SAP IMG Financial Services Account Management Contract Management Account Business Add-Ins (BAdIs) General BadIs Credit Standing Review for Accounts.


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SAP AG FS242 1-31

SAP AG 2010

Appendix: Configuration 2

BAdIs for Credit Standing Review for Accounts

3 BAdIs necessary to implement to run the Credit Standing Review process IMG ->Account Management -> Contract Management -> Account -> Business AddIns ->

General BAdIs ->Credit Standing Review for Accounts.


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SAP AG FS242 1-32

SAP AG 2010

Demand Deposits: Unit Summary

You should now be able to: Recognize types of demand deposits Understand the basic features of current account contracts Define tolerated limits for an account Define access limits for an account Create a direct debit order Define the permitted combinations of transaction type groups and media Explain how to issue a balance confirmation for the account


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SAP AG FS242 1-33


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SAP AG FS242 1-34

Exercise Data Sheet

Key to Icons in Exercises and Solutions

Exercises

Solutions

Objectives

Business Example

Hints and Tips

Warning or Caution


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SAP AG FS242 1-35

Data Used in Exercises Type of Data Data in Training System Contract Manager RTXX

Business Partner CUST_XX

Reference Interest Rate FED

EONIA

Payment Transaction Area RTXX

Bank Posting Area RTXX

Products CURRACCT1 current account CURRACCT5 current account

ACC_INT internal account

TD_1M_PRV - 1 Month Time Deposit

SAVACCT1 - Savings Account with Notice

SAVSCHEM1 - Savings Scheme

SAVCARD1 - Savings Card (Card Product)

DEBICARD Debit Card

CREDICARD Credit card

TR_ECP1 Effective Cash Pooling zero balancing

TR_ECP2 Effective Cash Pooling target balancing

TR_ECP3 Effective Cash Pooling trigger balancing

TR_IC_NP Notional Pooling

TR_IC_MP Margin Pooling

TR_FAC1 Facility

TR_FAC2 Facility with Combined Settlement

TR_BPR Bundle Pricing

TR_ODP - Overdraft Protection

TR_CST Combined Statement

Bank Country DE

Currency EUR


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SAP AG FS242 1-36

Exercises

Unit: Demand Deposits Lesson: Current Account Features

When you have completed this exercise, you will be able to:

Create a new current account product

Create a current account

Maintain direct debit order details

Maintain access limit details.

Mr. Adams comes to the ABC bank to open a new current account. The bank gives him an overdraft limit of EUR 1,000.

He also requests a direct debit order to enable the direct payment of his telephone bill.

1-1 Create a new account product with the name ##CURR_ACC and description ##Current Account for Training. Use the latest version of the CURRACCT1 -product as a template product. Change the following attributes in your new product:

Define the committed limit: EUR 4000

Increase the tolerated limit to EUR 1000

Release all media for all transaction types (checks, collection authorizations, debit memos, and so on)

Activate your new product.

1-2 Create a current account. Use business partner CUST_XX or your own business partner . Use account product: ##CURR_ACC and currency EUR. Configure the following parameters:

Grant the customer a limit of EUR 5,000

Account settlement on the monthly basis

Check if the appropriate settlement conditions are assigned

Save the account and note the account number.

1-3 Maintain direct debit order details: The customer allows the collection of a maximum of EUR 300 by New Mobile company.


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SAP AG FS242 1-37

1-4

The customer is allowed no more than 3 cash withdrawals at the bank counter each week.

Maintain the following access limit for your account:


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SAP AG FS242 1-38

Solutions

Unit: Demand Deposits Lesson: Current Account Features

1-1 Create a new account product ##CURR_ACC.

To reach the Customizing level, enter transaction SPRO in the command field, and choose Enter. Choose . You are now in Customizing.

In the structure tree, choose Account Management Product Management Product Definition Account Products Create Account Product. Enter the following data:

Field Name Value

New Product ##CURR_ACC

Template Product Use the input help to select the CURRACCT1 product, and confirm with . You can use this product as a template for your new product.

Product Version Use the input help to select the active product version, and confirm with .

Confirm your entries with .

In the Product Description field, enter a product name for your new product: ## Current Account for Training. In the field Valid From, enter 01.01.2000. Confirm your entry with

. You are now in a structure tree in which you can change individual attributes for the product.

To define the committed credit limit, choose: Used Attributes Limits Committed Limit Committed Limit Amount. In the Proposed Value table, change the credit limit amount for the EUR currency to 4000, and confirm your entries with .

To raise the tolerated limit, choose Used Attributes Limits Tolerated Limit Toerated Limit Amount. In the Default Value table, change the tolerated limit amount for the EUR currency to 1000, and confirm your entries with .

To release the media for all transaction types, choose the following path in the structure tree: Used Attributes Transaction Types/Media Postings Transaction Type


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SAP AG FS242 1-39

Groups/Media. In the matrix that appears, set all the rows to green if necessary (at the start of the row), and confirm your entries with . Save your product with .

Activating the new product

Choose Account Management Product Management Product Definition Account Products Change Account Product.

Choose your newly created product ##CURR_ACC. Confirm the entry with .

Choose and then to activate your new product and allow it to be used. Your product has now been activated.

Save your entries with . Click to return to the basic menu.

1-2 To create an account, choose:

SAP Menu Financial Services Account Management Account Account Master Data Create Account

Enter the following data on the initial screen:

Field Name Values

Contract Start 01.01.200X

Contract Manager RT##

Account Number Assigned by the system

Product ##CURR_ACC

Account Holder ID CUST_XX or your own BP

To confirm your entries, choose Enter . On the Basic Data tab page enter and check the following:

Field Name Values

Contract Purpose Training

Contract Currency EUR

Choose .

Go to the Settlement tab page and choose End-of-the-Month as the periodicity.

On the Financial Condition tab page, check that the valid interest conditions for current accounts have been assigned.

On the Limits tab page, enter the following:

Field Name Values

Committed Limit 5000

Limit Currency EUR


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SAP AG FS242 1-40

Limit Check Indicator Active

Note the number of the new account.

To save the account, choose Save .

1-3 Maintain direct debit order details:

SAP Menu Financial Services Account Management Account Account Master Data Change Account

Field Name Values

Bank Country DE

Bank Key Your Bankkey

Account Number Your account number

To confirm your entries, choose Enter . On the Direct Debit Order tab page, enter the following:

Field Name Values

DD order no. Assigned by the system

Payment Recipient New Mobile Company

Max Debit Amount 300

Currency EUR

1-4 Maintain the following access limit for your account: The customer is allowed no more than 3 cash withdrawals at the bank counter each week.

On the Access Limits tab page, got to Access Limits (Counter Based)Area enter the following:

Field Name Values

Access Limit Type AC0001 Cash Withdrawals

No. of Periods 1

Period Unit Weeks

Counter 3

To save, choose .


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SAP AG FS242 1-41


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SAP AG FS242 2-1

SAP AG 2010

Time Deposits Overview: Functional Blocks

Product Configuration Financial Conditions/ Pricing

Item Management/Payment Services

Contract Management

Posting Control Processing/Exception Handling

Order Management/Business Operations

CurrencyConversion

Posting LockManagement Settlement

Master Contract Management

PoolingCombined Settlement

Credit Facilities/Global Limits

Billing and Invoicing Payment DistributionOpen Item

Management

FinancialCustomer

InformationManagement

Accounting

Collateral

Payment Distribution& Monitoring

Cash Flow

Cor

resp

onde

nce

Periodic Processing

ReportingDouble,Triple,

Quadruple Control

ArchivingInsurance

This is an overview of the functional blocks that are used in the operational business covered by banking

services from SAP banking services from SAP provides banks with core functions in banking Left: y Dark grey: NetWeaver tools that provide generic functions for banking services from SAP

Middle: y Light grey: Generic features & functions within banking services from SAP: These functions are used

for managing deposits, loans, cards, and master contracts (in SAP Deposits Management and SAP Loans Management for Banking) y Petrol: Special functions used for loans y Violet: Special functions used for master contracts

Right: Integration to other applications: y Applications within banking services from SAP (SAP Collateral Management for Banking,

Accounting) y Applications outside banking services from SAP (Insurance) y FS-BP is already integrated within banking services from SAP y Petrol, light grey: see above (middle) y Dark grey: see above (left)


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SAP AG FS242 2-2

SAP AG 2010

Time Deposits: Course Overview Diagram




Unit 4: Notice Deposits: Savings Plan







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SAP AG FS242 2-3

SAP AG 2010

Time Deposits: Objectives

After completing this unit, you will be able to: Understand the basic features of the time deposit product Create a time deposit account Describe the life cycle of a time deposit Explain the available options for interest usage during the term and at the end

of term Understand the options available for the additional deposits or for the reduction

of deposited funds Explain the renewal function Execute full repayment and account closure of a time deposit account.


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SAP AG FS242 2-4

SAP AG 2010

Time Deposits: Business Example

Michael Adams has an unexpected stroke of luck. His rich aunt, Francesca Armstrong, leaves him an inheritance of EUR 50,000. Overwhelmed by his newly-found wealth, he contacts his bank adviser who recommends depositing the money in a time deposit account for the time being. Michael Adams follows this advice and opens a time deposit account for 1 month.

A few weeks later, Michael Adams is still wondering what to do with his small fortune. He simply cannot decide. Therefore, the time deposit is extended for another 30 days (renewal).

Michael Adams finally comes to a decision: He donates the money to the city zoo. On the day of maturity, the time deposit account is closed and the fundsare transferred to his current account.


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SAP AG FS242 2-5

SAP AG 2010

Time Deposits: Table of Contents 1

Lesson 2: Creating a Time Deposit

Time Deposits

Lesson 1: Time Deposits Overview and Usage

1.1. Definition of Time Deposits

2.1. Time Deposit Agreement


2.2. Financial Conditions


1.4. Life Cycle

2.3. Payment Reference Account


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SAP AG FS242 2-6

SAP AG 2010


Time Deposits

Lesson 3: Fixing Phase

Lesson 4: Maturity of a Time Deposit

4.2. Calling a Time Deposit

4.3. Renewal

4.4. Closure of a Time Deposit

4.1. Actions at the End of Term

3.1. Functions

3.2. Latest Start of Term

3.4. Term Variant

3.5. Deposits and Withdrawals

3.3. Grace Period


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SAP AG FS242 2-7

SAP AG 2010


Lesson 2: Creating a Time Deposits

Time Deposits


1.1. Definition of Time Deposit



1.4. Life Cycle




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SAP AG FS242 2-8

SAP AG 2010

Time Deposits Overview and Usage: Definition of Time Deposit 1

CurrentAccount

CheckingAccount

TimeDeposits

DemandDeposits

Fixed-TermDeposits

SavingsScheme

Special Conditions

Notice Deposits

Savings Account

with Notice

SavingsAccount

Special Orders

Demand Deposits y Examples of Demand Deposits:

- Current Account/Checking Account (identical functions in banking services from SAP) Deposited funds can be withdrawn at any time without any notice to the depository

institution

Enables customers to distribute money directly to others

Offers the facilities for arranging standing orders, direct debits, and so on.

Checking Account (used mainly in the USA) allows the account holder to use personal checks in place of cash to pay bills

- Savings Account (also known as Instant Access Savings, for example, in Great Britain) Enables immediate withdrawals without notice

Offers higher interest than current accounts

Cannot be used for direct debits or paying bills, and most do not offer check books or cash cards


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SAP AG FS242 2-9

Notice Deposits y Examples of Notice Deposits:

- Savings Account with notice Offers higher interest than current accounts

No fixed maturity

Access to the funds is restricted as all or part of the deposit is subject to notice

If withdrawals are made without prior notice, the customer is usually penalized with an interest penalty

- Savings Scheme (also known as Installment Savings Scheme) Payment agreement with the customer for a fixed period, for example, a minimum

monthly installment of EUR 100 for 25 years

Access to funds is restricted as all or part of the deposit is subject to notice

Increasing bonus for the amount saved each year

Fixed-Term Deposits y Time Deposit

- Funds deposited at a financial institution for a fixed period of time - Interest rate is fixed for the complete term - Fixed term can range from a few days to a few years - Money can be withdrawn after the term has ended


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SAP AG FS242 2-10

SAP AG 2010

Time Deposits Overview and Usage: Definition of Time Deposit 2

Time Deposit

A specific amount of money deposited at a financial institution for investment purposes.

Withdrawals prior to maturity are often subject to penalties.

Funds are deposited for a predetermined term; for example: 1, 2, 3 6, ... 12 months/ years 1, ... 30, 60, 90, 180 days

The interest rates are set according to the term in interest days (30, 60, 90 180 days) and the amount of deposited capital.

The interest rate is fixed for the complete term.

Fixed capital

Fixed term

Fixed interest rate

Definition Time deposit represents an amount of money invested by a customer at a fixed rate for an agreed fixed term. Time deposits usually pay higher interest rates than savings accounts, and the rate of return is guaranteed if the deposit remains in the account for the entire term. The interest rates can be defined as: y Percentage amount, for example: 1.23 % y Reference interest rate, for example: EURIBOR 0.5%. In this case, the reference interest rate (but not

its value) is fixed at the term start, for example, EURIBOR, LIBOR.


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SAP AG FS242 2-11

SAP AG 2010

Time Deposits Overview and Usage:Definition of Time Deposit 3

Characteristics Current AccountsSavings

AccountsTime

DepositsNotice

DepositsUsed as a transactional account yes no no no

Funds availability immediate immediate on maturity according to noticeNotice period no no no yes

Fixed maturity no no yes no

Credit interest no / low higher high high

Penalty for early withdrawal no no yes yes

Overdrafts yes no no no

Savings book/savings card no yes no yes

Debit cards yes no no no

Only for private individuals no yes no yes

Productcharacteristics


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SAP AG FS242 2-12

SAP AG 2010

Time Deposits Overview and Usage:Contract Characteristic

Basic Data Business Partner Correspondence Recipient Time Deposit Financial Conditions Settlement Combined Statement - Participant Account Closure Transaction Type Groups/ Media Features Posting Data Events Management Data Payment Details

Time Deposit: Account Master Data

Time DepositAccount .. .. .. .. ..

Time Deposit Account: In the product configuration (Customizing) you need to activate the relevant attributes: Time Deposit A set of attributes that enables the functions specific for time deposit product. Financial Conditions You can specify the credit interest rate and penalty conditions for early

withdrawals, if required. Settlement Enables the interest calculation for the time deposit product. You can either calculate the

interest only at the end of term, or also within the term based on the defined settlement periodicity. In both cases the settlement starting date is synchronized with the start of term of the time deposit.

Transaction Type Groups/ Media You can limit the types of transactions allowed, and the medium by which the transactions can be carried out, for example, online banking, text messages, call center, and so on.

Payment Details You can specify the reference account for the time deposit account.


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SAP AG FS242 2-13

SAP AG 2010

Time Deposits Overview and Usage:Product Configuration

Attribute 1Attribute 2Attribute 3Attribute 4Attribute 5

Product

Time Deposit .. .. .. ..

Time Deposit Settlement Financial Conditions Transaction Type Groups/ Media Payment Details

Time Deposit Settlement: Synchronize Period Financial Conditions Transaction Type Groups/ Media Settlement Payment Details Payment Details

Product Attributes: Settlement: Synchronize Period y The settlement starting date is synchronized with the start of term of the time deposit. At the end of

term, settlement is called up as part of end-of-term processing for time deposits. You can choose from the following values:

- 02 Time Deposits: The start date is synchronized with the start of term of the time deposit. The next period end is recalculated based on the time period settings. If you have set Month or Year in the period unit, the system also synchronizes the period key dates.

- 03 No Periodic Settlements: Periods are not taken into account and a settlement is only run at the end of term of the time deposit agreement. There is no periodic settlement run.


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SAP AG FS242 2-14

SAP 2010

Time Deposits Overview and Usage: Life Cycle 1

Fixing PhaseFixing Phase Maturity PhaseMaturity PhaseInvestment PhaseInvestment Phase

Account opening Recording and

maintenance of account master data

Funds transfer

The system calculates the term

Funds transfer Closure of

contract

System date monitoring and status change

Maintenance of new creation master data

FixingStart of Term

Time Deposit CreationMaster Data Renewal

WithdrawalClosure.Call Date

The time deposit life cycle consists of three phases:

The life cycle of a time deposit agreement (and the time deposit account) is divided into three phases: The preliminary phase begins at the start of the contract for the time deposit account and ends at the

end of the first day of the fixing phase. The fixing phase begins on the actual start of term and ends at the end of term. During this phase, the

agreed contract amount and the conditions are fixed, which means that they do not change. The maturity phase begins at the end of term of the time deposit agreement. During this phase, you can

change the data of the time deposit agreement, such as the standard declaration of intent or the contract amount for a subsequent agreement.

In banking services from SAP there are various functions that can be used to manage time deposits: Create/change/display a time deposit Fix a time deposit Lock/unlock a time deposit Call a time deposit Renew a time deposit Close a time deposit


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SAP AG FS242 2-15

SAP 2010

Time Deposits Overview and Usage: Life Cycle 2

Fixing PhaseFixing Phase Maturity PhaseMaturity PhaseInvestment PhaseInvestment Phase

FixingStart of Term

Time Deposit CreationMaster Data Renewal

Withdrawal/ Closure.Call Date

Notice of Maturity

Confirmation of Creation

Correspondence for Withdrawal (Termination)

Confirmation of Renewal

At each phase in the time deposit life cycle, the system creates the appropriate correspondence for the customer.

Correspondencecreation:

Confirmation of Settlement

Correspondence for Time Deposits Confirmation of creation: If the time deposit has been created for the customer (that is, it has been

fixed successfully), a letter to the customer can be issued automatically confirming the creation of the deposit.

Notice of maturity: This reminds the customer that his or her time deposit contract is going to expire. When the time deposit agreement is created, you can determine if the notice of maturity should be sent to the customer. In Customizing (Product Configurator), you also specify how many days before the end of the agreement the system creates the notice of maturity.

Confirmation of Settlement: You can also send a confirmation of interest calculation to the customer. Confirmation of Renewal: If the time deposit has been renewed, a letter confirming the renewal can be

issued automatically.

These setting are optional in the product configuration. You can activate or deactivate the creation of different correspondence types for a time deposit product as desired/required.


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SAP AG FS242 2-16

SAP AG 2010


Lesson 2: Creating a Time Deposit

Time Deposits


2.1. Time Deposit Agreement

2.2. Financial Conditions

2.3. Payment Reference Account




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SAP AG FS242 2-17

SAP AG 2010

Creating a Time Deposit: Time Deposit Agreement 1

Start of term

Contract amount Action at end of term

Interest usage Rate lock period

Term duration

A Time Deposit Agreement represents the agreement between the bank and a customer to deposit

a specified amount of money for a given period of time. It includes the contract details, such as the contract amount, term duration, and start of term.

An account can only contain one current time deposit agreement. This means that the terms of different time deposit agreements for the same account cannot overlap.

The components of a time deposit agreement are explained in detail on the following slides.


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SAP AG FS242 2-18

SAP AG 2010


Start of term Can be on or after the account opening date

Term duration, for example: 1, 2, 3 ... months 30/60/90/180 interest days 1, 2, 5 ... years

End of term: Determined dynamically based on the term duration or Specified as a fixed date which allows to define irregular

periods, for example 09/12/2009 11/07/2009

In the time deposit product (Customizing) you can define: Minimum contract term Maximum contract term

Start of term

Term duration


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SAP AG FS242 2-19

SAP AG 2010


In the time deposit agreement you define the contract amount agreed upon with the customer.

In the time deposit product (Customizing) you can define: Minimum contract amount for each currency Maximum contract amount for each currency

Renewal (identical amount/increase/partial repayment) Full repayment Open (wait for instructions from the customer)

Administrative bank decisions With account closure after full repayment Without account closure after full repayment

Action at end of term

Contract amount


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SAP AG FS242 2-20

SAP AG 2010


Example: System responses for Action at end of term if no follow-up time deposit agreement exists

Con

trac

t Set

ting

Stan

dard

Dec

lara

tion

of In

tent Identical

renewal

Full repayment

Availability on due date

None Explicit customer request

Identicalrenewal

Full repayment

Full repayment -

Availability on due date

Full repayment

Time Deposit Agreement SettingFull Repayment

The Standard Declaration of Intent specifies how the system is to respond if there is no future time

deposit agreement number. The standard declaration of intent applies to the complete time deposit and cannot be defined individually for each time deposit agreement. You can choose from the following: y Identical renewal y Full repayment y Availability on due date

Full Repayment specifies whether the system is to make a full repayment when the time deposit is called or whether it has already been made. The full repayment cannot be changed if there is a time deposit agreement with status future. The following values are available for the full repayment: y None - This is the default value. y Explicit Customer Request - If you choose value Explicit customer request, a full repayment is made

instead of a renewal when calling time deposits. You use the Full Repayment attribute, if you want, for example, to execute a full repayment after the agreement has been renewed several times (Standard Declaration of Intent = Identical Renewal). y Standard Declaration of Intent - If there is no time deposit agreement with the status future when you

call up time deposits and the standard declaration of intent is full repayment, the system makes the full repayment and sets this value. This value must not be set in the product definition.


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SAP AG FS242 2-21

SAP AG 2010


You can define how to deal with earned interest during the term and at the end of term:

Capitalization on the time deposit account Transfer to a reference account

Calculation of Capital Yield Tax: Yes / No Immediately / At the term end

Rate lock period enables you to lock the interest rate for several days, and if the time deposit agreement is fixed within that period, the locked rate will take effect for the entire term.

Used to keep the interest rate agreed upon with the customer when the contract was signed, if the time deposit is to be fixedat a later time.

Interest usage

Rate lock period

Interest usage It is possible to specify what happens with the calculated interest within the term and at the term end: Interest Usage During the Term specifies how the system deals with the interest accrued for a deposit

between the start of term and the end of term. The following

Documents

FS242_EN_Col95