A Practical Guide to Advanced Payment Management with In-House Banking

2.1   Configuration elements

First, we will cover the key configuration elements relating to the advanced payment management module. For each configuration element in this section, SAP PCE screenshots are shown. Key advanced payment management configuration is covered in Chapter 6.

A clearing area is the highest organizational element in advanced payment management. A company can have one or more clearing areas based on business requirements and reporting needs. In a PCE system, the clearing area is defined in the IMG under Financial Supply Chain Management • Advanced Payment Management • Basic Configuration • Organization • Define Clearing Area (see Figure 2.1).

Figure 2.1: Defining the clearing area

Format, medium, and channel are key elements specified in the converter, which is used to import data into the Input Manager in advanced payment management or output data through the Output Manager. These three fields are freely definable in customizing by following menu path Financial Supply Chain Management • Advanced Payment Management • External Interfaces • File Handler • Basic Configuration • Setup Converter. The configuration is explained in detail in Section 6.1.5.

The format, medium, and channel fields drive the determination of the inbound converter, which defines how the data is processed in advanced payment management. These fields are used to distinguish the payments sent through advanced payment management. An explanation of these fields is as follows:

• Format—indicates the format of incoming payment messages. Examples of formats are ISO message types, MT message types, CSV, text, etc.
• Medium—describes how a payment is received. Examples of mediums are file (uploaded from the application or local server), SAP Multi-Bank Connectivity, manual creation, etc.
• Channel—defines the system that initiated the message. Examples of channels are Human Resources, Treasury, subsidiaries, etc.

As previously mentioned, there are inbound and outbound converters. The inbound converters are specified in the Input Manager and indicate to advanced payment management the format of the inbound file and the type of data it contains. An outbound converter takes the payment information just processed in advanced payment management and converts it to an external format specified in the clearing agreement. The output converter is specified in the clearing agreement.

In a Cloud Private Edition system, the converters are defined in the IMG under Financial Supply Chain Management • Advanced Payment Management • External Interfaces • File handler • Basic configuration • Set Up Converter • Define Converter (new) (see Figure 2.2).

Figure 2.2: Defining converters

A file handler is a combination of configuration and data storage. A file handler consists of:

• Input Manager—this receives the incoming payment messages into advanced payment management and maps the external format to an internal meta-format and an ISO20022 representation. An inbound converter is referenced in the Input Manager and determines how to convert the data into inbound payment orders.
• Output Manager—this converts the internal business objects into an external format. An inbound converter is referenced in the Output Manager and determines how to convert the internal outbound payment orders into a payment message or file.
• File Handler Database (FHDB)—this is a database holding the payment data. The inbound format converter converts only the required data from the imported payment message to the internal meta format. The Input Manager uses the FHDB to store data that is not required for further payment transaction processing, but which could be required for later outbound format generation. The data stored in FHDB can be displayed at any time if it is necessary to investigate what was sent in the incoming message.

An in-house bank is an internal bank through which a company makes payments for various entities that are participants of the in-house bank. Keep in mind that when SAP uses the term in-house banking it refers to the in-house bank functionality in advanced payment management versus the in-house bank functionality in the In-House Cash module.

In a Cloud Private Edition system, the bank areas are defined in the IMG under Financial Supply Chain Management • Advanced Payment Management • In-House Bank • Define Bank Areas for Account Management (see Figure 2.3).

Figure 2.3: Defining the bank area

Transaction code DMEEX configuration in SAP is essential for creating payment files and is used by advanced payment management to create the outbound files. With advanced payment management, the payment format can be assigned in the clearing agreement (master data), or in the configuration of converter attributes.