In-House Cash - Central Payments

This Business Scenario Map is designed to show you how three parties - a bank of treasury, a global treasury center, and a subsidiary - use the business Internet to settle subsidiary payables to external business partners. The map illustrates the benefits of collaboration. Information is shared quickly and easily between business partners. This reduces the communication effort. The result is a streamlined business process that saves time and money.

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Value Potentials	Business Benefits
	Direct overview and full control of the liquid funds on each intercompany account
Saving of Global2000 Enterprises from Currency Exchange in 2002: $ 75 Billion*	Save on currency translation charges
	Savings on international payment transactions
	Enables the company to optimize their foreign exchange positions and reduce currency exposure
Global2000 enterprises can save $12 billion if they settle both inter-company and third-party payments more effectively*	Framework for improvement in the efficiency of group payment processing

Bank of Treasury Center

Global Treasury Center

Subsidiary

Execute central payments

Create external bank statement

Debit intercompany account

Create central payment file

Create internal statement of account

Periodic sweeping of intercompany account

Process external vendor invoice

Create external vendor payment file

Reconcile and post internal statement of account

Source:
*Killen & Associates, Inc.

The value potentials shown in this table have been reported by selected SAP customers or independent third parties as referenced herein. However, there is no guarantee that such value potentials can be realized in any particular customer-specific business processes, and SAP does not make any representations and disclaims any liability as to the appropriateness of the referenced value potentials for any specific customer situation.
©SAP AG 2008

Business Benefits	Value Potentials
Radically decrease of number of external bank accounts
Maximize interest gains.
Provision of the latest data on the cash flows and account movements
Automatic transfer of balances to Financial Accounting increases internal effiency


In-House Cash - Central Payments Central payments is the term used for settling subsidiary payables to external business partners by means of payments via the Global Treasury Center. Example: A subsidiary pays an external partner via the Global Treasury Center. The Global Treasury Center receives a payment order from a subsidiary instructing the Treasury Center bank to make the payment. At the same time, the Global Treasury Center debits the internal current account of the subsidiary. A file containing the payment information is subsequently sent to the Treasury Center bank which in turn, creates and sends a bank statement back to the Global Treasury Center. Processing the bank statement from the Treasury Center bank automatically triggers the posting of the turnovers in Financial Accounting and generates the statement of account for the subsidiary, clearing the original due payment. When payments are made to an external partner, cash only flows from the Treasury Center bank to the business partner's bank. By serving as a centralized, virtual in-house bank, SAP In-House Cash helps the customer to streamline its payment processes.