SAP Consolidated Payables Link

SAP Custom Development SAP Consolidated Payables Link CUSTOMER Document Version: 100 <08-05-2013> SAP Consolidated Payables Link 100 1

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SAP Consolidated Payables Link... 5 1 Data Exchange... 10 1.1 Business Process... 11 2 Payment Advices Generation at Corporate... 12 2.1 Process Outbound Message Logging... 13 2.1.1 Creating and Formatting Payment Advice... 14 2.1.2 Sending Payment Advice and Receiving Acknowledgement... 17 3 Payment Status Update Processing at Corporate... 18 3.1 Process Inbound Message Logging... 19 3.1.1 Processing Payment Status Update... 20 4 Reconciliation Statement Processing at Corporate... 21 4.1 Process Payment Reconciliation Statement... 22 5 Corporate Message Cockpit... 23 5.1 Resending/Reversing Payment Advices... 24 5.2 Viewing Payment Advice Messages, Status, and Logs... 25 6 Reconciliation Cockpit... 26 6.1 Executing RCON... 27 SAP Consolidated Payables Link 100 4

SAP Consolidated Payables Link Product Information SAP SAP Consolidated Payables Link Release 1.0 Based on SAP ECC 6.0 Documentation Published May 2013 Consolidated Payables Link is a corporate-to-bank connector for US Bank. This provides a straight-through processing capabilities for SAP ECC implementations to inform US Bank (hereafter referred to as the Bank) of their fund transfers. US Bank can send their proprietary reconciliation statementsrcon1 for Payment Plus Instructions and other notifications to help you reconcile your account books. The solution includes the following business scenarios: Creating and formatting Payment Advices Sending Payment Advices Processing of Payment Status Updates from the bank at Corporate Processing of Reconciliation statements from the bank at Corporate Payment Message Cockpit The US Bank banking application requires payment advices and payment status confirmations to be transmitted in ISO20022 message formats and reconciliation statements (for Payment Plus only) in US Bank Proprietary formatrcon1. The solution also enables you to centrally manage, track, and report vendor payments processed through this platform. This solution is provided as an add-on to SAP ECC 6.0. SAP Consolidated Payables Link 100 5

Implementation Considerations The solution architecture requires the following components: SAP ECC with minimum one instance on version as described in the table given below. Lower release versions are subjected to change request and technical feasibility. Support Package for Software Components Product Version SAP_APPL SAP_BASIS SAP_AP SAP ECC 6.0 600 SP21 700 SP26 700 SP27 SAP ECC 6.0 EHP2 602 SP11 700 SP26 700 SP27 SAP ECC 6.0 EHP3 603 SP10 700 SP26 700 SP27 SAP ECC 6.0 EHP4 604 SP11 701 SP11 700 SP27 SAP ECC 6.0 EHP5 605 SP08 702 SP11 700 SP27 SAP ECC 6.0 EHP6 No prerequisites for EHP6 SAP Consolidated Payables Link 100 6

Integration The following table provides an overview of the integration points with standard SAP functions and modules along with the purpose. Integration With Automatic Payment Transactions (transactionf110) With Payment Medium Workbench (PMW) and Data Medium Exchange Engine (DMEE) With Account Statement Entry (transaction FF.5) With Payment or Order Remittance Advice (EDI820) Purpose To generate payment instructions for the payment documents created by transaction F110 These instructions will be sent to the bank. To configure the message formats for generating your payment instructions in the relevant ISO20022 CGI V3- based XML format from the output of the standard payment run (transactionf110) To process the bank statements for reconciling your accounts A type of Electronic Data Interchange (EDI) document used in the exchange of transaction information between trading partners The solution is designed to use standard SAP programs, features, and functions for creating and sending payment instructions to the bank using procedures and steps as described in this document. The solution expects payment documents to be created from thef110 Payment Run. The following figure illustrates the solution architecture: SAP Consolidated Payables Link High-level Solution Architecture SAP Consolidated Payables Link 100 7

Features Payment Advice Generation US Bank requires the payment document files created as part of the accounts payables for the different operations at the corporate to be in V3 CGI compliant format Customer Credit Transfer Initiation V3 pain001.001.03. The system supports the creation and exchange of messages between you and the bank in the following formats: Credit instructions sent to the Bank using pain.001.001.03 (v3 CGI compliant format Customer Credit Transfer Initiation v03); for more information on implementation steps and details for processing CGI ISO20022 Credit Transfer, see 1665873. Acknowledgement and status update messages from the bank using pain.002.001.02 (v2 CGI compliant format Payment Status Report v02). For more information, refer to Payment Advices Generation at Corporate [Page 11]. Payment Status Update The payment instructions sent by your ECC system are received by the Bank, and the Bank forwards the payment advice to bank applications. These applications, as a part of their further processing, create a check, send for automated clearing, or send to other banks or for transfers between accounts of the same bank. On payment file reception, the bank system sends the status of the file reception to your ECC system. For more information, refer to Payment Status Update Processing at Corporate [Page 17]. Corporate Message Cockpit A Corporate Message Cockpit is required to view files exchanged between you and the Bank. A new transaction (/USC2B/MSG_COCKPIT) is provided to view these files. This cockpit maintains the history and current status of payment advices transacted between your system and that of the Bank. For more information, refer to Corporate Message Cockpit [Page 22] Reconciliation Cockpit This cockpit is integrated within the Corporate Message cockpit provided to view the reconciliation files received from the Bank. A new transaction (/USC2B/RCON1_COCKPIT) is provided to view these files. The cockpit provides the capability to track the payment status of Payment Plus instructions issued to the Bank. This cockpit shows the data at the following levels: Payment Plus instructions that are delivered by your system to the Bank Payment Plus instruction debited by the merchant For more information, refer to Reconciliation Cockpit [Page 25]. SAP Consolidated Payables Link 100 8

Prerequisites For the solution Consolidated Payables Link and its component processes to function, the following objects must be available in the system: Vendor master records. SAP ECC customizing for Payment Medium Workbench is set up with all paymentrelated settings, which includes US Bank relevant payment methods. DMEE is configured to process identified file format ISO CGI Pain.001.001.03. Necessary file transmission channels are pre-configured in both SAP ECC and US bank systems for communication. SAP ECC 6.0 without enhancement packs SAP Basis 700 Support Pack 25, SAP_APPL Support pack 20, SAP_AP Support pack 26 (Per SAP Note 1600482). Connection between ECC 6.0 and US Bank banking systems supporting requisite ISO 20022 and US Bank Proprietary formats. SAP Consolidated Payables Link 100 9

1 Data Exchange Processing your credit instructions involves the following data exchange between your system and that of the bank: Instruction messages are sent from your SAP ECC to the bank. Acknowledgement messages and status update messages are sent from the bank to your SAP ECC. Bank statements (RCON1) for your Payment Plus instructions are sent from the bank to your SAP ECC. There is no specific data exchange as the solution creates a text file in your configured directory. Message Formats The solution supports the exchange of messages in the following ISO 20022 formats: pain.001.001.03: Message format used for initiating credit instructions. pain.002.001.03: Message format for acknowledgement and status updates from the bank. Reconciliation messages are (RCON1) integrated with your message cockpit to view the reconciliation files received from the Bank. Message Format pain.001.001.03 Data The following credit-instructions types (payment methods) are supported for transmission: Local payments Domestic ACH Domestic and international payments wire (all domestic wire transfers are for USD only) Check Payment Plus USD only pain.002.001.03 Acknowledgement and status messages for instructions sent using pain.001.001.03 Reconciliation Messages (RCON1) Payment Plus instructions that are delivered by Corporate to the bank Payment Plus instructions debited by the merchant SAP Consolidated Payables Link 100 10

1.1 Business Process The overall business process of this development is categorized into following major business processes, Payment Advices Generation at Corporate Payment Advices Status Update Processing at Corporate Reconciliation Statement Processing at corporate (for Payment Plus instructions only) Corporate Message Cockpit at Corporate to track and report transactions between bank and Corporate RCON1 messages cockpit to track payment status and reconciliation of payment plus instructions Prerequisites You have configured the master data required by the bank. You have configured your payment methods in Customizing under Financial Supply Chain Management > Consolidated Payables Link for US Bank. You have configured your instruction message formats in Customizing under Financial Supply Chain Management > Consolidated Payables Link for US Bank. You have maintained the Customizing settings for the payment medium format USC2B/CGI_XML_CT. Required Objects In order to support the corporate-to-bank connectivity process and all of the related components it is important to note the following objects are necessary within the system. US Bank-relevant house bank data Payment methods DMEE payment formats Application server file directories for payment file operations SAP Consolidated Payables Link 100 11

2 Payment Advices Generation at Corporate To enter a vendor invoice or customer invoice for payment, you use the standard SAP programs Enter Vendor Invoice or Generate Purchase Order (PO) Invoice respectively (transactionsfb60/miro). To execute the payment runs corresponding to the vendor invoices or customer invoices you have entered, you use the program Automatic Payment Transactions (transactionf110). On execution of the payment run and creation of the messages, the instructions meant to be sent to the bank (based on the payment method selected for the bank) are processed by the solution and transferred. Payment advice generation is a two-step process. 1. You create a Payment Advice (Creating and Formatting Payment Advice [Page 13]). 2. You send the payment advice and receive acknowledgement (Sending Payment Advice and Receiving Acknowledgement [Page 16]). SAP Consolidated Payables Link 100 12

2.1 Process Outbound Message Logging Given below is the process for Outbound Message Logging: Process 1. When a payment run for vendor open items is executed, payment advices are created and sent to Payment Medium Workbench (DMEE engine) for formatting and transfer to the Bank. 2. After the payment information is formatted, the custom processing routine creates a unique identification GUID for each payment advice file created for status processing and stores it in a custom database along with other information such as the SAP Payment Advice number. 3. Each payment advice file is uniquely identified by its group ID generated during payment information formatting in DMEE Engine. 4. At the end of the payment run, the formatted file is placed in pre-configured server directories by DMEE routines. SAP Consolidated Payables Link 100 13

2.1.1 Creating and Formatting Payment Advice Creating a Payment Advice is a two-step procedure: Creating an invoice Executing a payment run Invoice creation, which is the first step of creating a payment advice, involves three sub-steps: Creating an invoice Creating a goods receipt purchase order (only for MM invoices) Creating a document Procedure Creating an Invoice Invoices can be created for an FI or for MM invoices: 1. Create an invoice for FI. a. Go to Enter Vendor Invoice (transactionfb60). b. For the first time, you will be prompted to specify a company code; enter the appropriate company code and choose Continue. c. On the Basic data tab page, enter vendor account, G/L account number, invoice date, amount to be paid, and currency. d. On the Payment tab page, choose C-Check from F4 help. Note the invoice details you have entered; for example, vendor account, payment method, and so on. e. Select the house bank from F4 Help. If a house bank is provided, it will be taken into consideration otherwise, the default house bank will be considered. f. Enter details on the other tab pages as per your daily-operations procedures. g. Choose the Simulate pushbutton; verify the invoice details on the Document Overview screen that is displayed, and choose (Save). Your document will be created and its number will be displayed on the status bar. 2. Create an invoice with Purchase Order. a. Go to Create Purchase Order (transactionme21.) b. Enter the PO number in the Standard PO field. c. Fill in the vendor details. The system will navigate to the Org. Data tab. d. In the Org. Data, complete the Purchasing Org, Purchasing Group, Material, PO Quantity, Net Price, and Plant fields. e. Fill the G/L account number and cost center. SAP Consolidated Payables Link 100 14

f. Choose Save. g. Choose Enter. A PO will be created and an information message will be displayed showing generated PO number. Your document will be created and its number will be displayed on the status bar. 3. Create a Goods Receipt Purchase Order. a. Go to Goods Receipt Purchase Order (transactionmigo.) b. Enter the purchase order number entered previously in the Generating Vendor Invoice through Purchase Order. The PO will be available in the Navigation pane. c. Check the Item OK check box. d. Choose the Post button or the Save button. The material document will be posted and an information message will be displayed showing the material document. 4. Create a Document. For example: material document XXXXXXXXXX posted. a. Go to Enter Incoming Invoice (transactionmiro.) b. On the Basic data tab page, enter invoice payment date, amount, and purchase order number. c. Choose Enter. The amount you entered under the Basic Data tab and the amount filled in during purchase order creation should be the same. d. On the Payment tab page, fill the required details. e. Choose the Simulate push button; verify the invoice details on the Document Overview screen that is displayed. The Simulate Document in USD (Document Currency) pop up dialog opens up. f. In the Simulate Document in USD (Document Currency) pop up dialog, enter Procurement Document and click the Post button. g. Choose (Save) and verify the Invoice Document. The document will be created and an information message will be displayed showing the document number. For example: document no. 5105600136 created. SAP Consolidated Payables Link 100 15

Executing Payment Run 1. From your SAP Easy Access menu, go to transactionf110 and navigate to program Automatic Payment Transactions > Accounting > Financial Accounting > Accounts Payable > Periodic Processing/Payments. 2. On the Status tab page, enter the run date and identification as per your daily operations procedures. 3. On the Parameter tab page, enter the company code, payment method (C-Check), and vendor or customer for whom you previously entered the invoices. Enter the date of the next payment run as per your daily-operations procedures. 4. On the Additional Log tab page, choose the settings as per your recommended logging requirements. On this tab page, also enter the vendor or customer account numbers used previously. 5. Enter other details or make additional settings on the other tabs as per your daily operations procedures. 6. Choose (Save). 7. On the Status tab choose the Payment Proposal push button, followed by the Status push button. 8. Once the status message Payment proposal has been created is displayed, choose the Payment Run push button. 9. In the Automatic Payment Transaction screen, create the Payment Medium from Environment > Payment Medium > Cross-Payment Run Payment Medium > Create Payment Medium. You can now format the payment advice. 10. After creating payment advice, select directory DIR_USC2B/usr/sap/XNT/SYS/global/DIR_USC2B. 11. Double-click the file name Outbound. 12. Double-click the file name New. Result You can see the created file under this directory. Your payment instruction to the Bank will be created in the appropriate ISO20022 format that is, in v3 CGI-compliant pain.001.001.03 for payment instructions. SAP Consolidated Payables Link 100 16

2.1.2 Sending Payment Advice and Receiving Acknowledgement Procedure 1. Use the file download option in the Payment Message Cockpit to download and view the payment file. 2. Alternatively, go to transactional11. The payment advice will be sent by placing or storing the file under the file name Outbound >NEW. Acknowledgement will be received in the form of file stored under file nameinbound >NEW. SAP Consolidated Payables Link 100 17

3 Payment Status Update Processing at Corporate The payment instructions sent by your ECC system is received by the Bank and the Bank forwards the payment advice to bank applications which as a part of their further processing create a check, automated clearing, or send it to the other bank or for transfers between accounts of the same bank. SAP Consolidated Payables Link 100 18

3.1 Process Inbound Message Logging Given below is the process for Inbound Message Logging: Process For every payment advice file received by the Bank, an acknowledgement message is sent to your ECC system with RCVD status for the payment group in the file. The payment status file is placed in a pre-determined file path and is read by a periodic batch job that performs checks on data integrity and validity. If the file contents are found valid, a custom processing routine retrieves the status reference for the payment group ID received in the file and updates it with the RCVD status. After the file is processed, it is deleted from the active directory. Any error that occurs during the processing of inbound status files is logged in the application log for the payment group ID. If the payment group ID is invalid, the errors are stored in a log file that is stored in a log folder on your ECC system. All processed files are transferred to a processed folder in your ECC system after processing. If any errors occur during inbound file processing, the file is transferred to an error folder. SAP Consolidated Payables Link 100 19

3.1.1 Processing Payment Status Update Procedure 1. To process the inbound files immediately, execute the simulation report /usc2b/inbound_file_processing via t-code SE38. In the production environment, this report is scheduled to run at user-defined intervals to poll and process inbound files received from the Bank. 2. Execute simulation report /USC2B/INBOUND_FILE_PROCESSING via t-codese38. 3. After executing the simulation report, execute report /USC2B/PAYMENT_MESSAGE_COCKPIT. 4. Enter the selection criteria and click the (Execute) icon or press F8. The ALV showing payment details appears. After receiving the payment instruction, the status of the payment advice as Payment Instruction Received is visible. 5. Select a row and click the Status History button. The payment status history appears. SAP Consolidated Payables Link 100 20

4 Reconciliation Statement Processing at Corporate The payment instructions sent by your ECC system are forwarded as fund transfer requests by the Bank to counterparties either within the Bank or outside. The Bank then sends reconciliation statements to your ECC system to update and reconcile the books only for Payment Plus transactions. For other payment types, the Bank shall not send any reconciliation statements to your system. To provide this data, the Bank s systems will send a text file to your ECC system. Based on the solution configuration, the reconciliation files will trigger FF.5 and follow the processes that are defined in your system. Prerequisites The Bank should provide a text file of typercon1. The text file should be formatted as per the rules mentioned in the document 'BRANDED_RCON1_File_Specifications.pdf'. The payment advice should be created using payment method Payment Plus, and it should be sent to the Bank. SAP Consolidated Payables Link 100 21

4.1 Process Payment Reconciliation Statement Given below is the process for Payment Reconciliation Statement: Process A custom program is created to facilitate reception and processing of reconciliation statement files. A periodically scheduled batch job monitors the preconfigured server directories in your ECC system for payment reconciliation files and triggers reconciliation update program for processing. The reconciliation routine reads the contents in thercon1 file and validates the file content for data integrity. In case of any errors, same will be logged in the application log and further processing is terminated. After successful validation, information in various records in the file is extracted for subsequent updation in the custom reconciliation DB. For fully reconciled Payment Plus transactions, the data is formatted to standard FF.5 payment structures to enable standard electronic bank settlement processing program (FF.5) for posting payment settlements. The automatic reconciliation for payment plus can be activated via configuration Maintain RCON1 Inbound File Processing Rules All partial reconciled Payment Plus transactions remain in the same status till they are fully reconciled at the Bank and their status is communicated to you. TheRCON1 data received from the Bank can be viewed in the Reconciliation Cockpit. For more information, refer to Reconciliation Cockpit [Page 25]. SAP Consolidated Payables Link 100 22

5 Corporate Message Cockpit Every payment advice file sent by you must be logged in the message cockpit created in your ECC system. When the acknowledgement is received from the Bank, statuses are logged under the master payment record. The message cockpit authorizes you to: View payment advices created and sent to the Bank View reception status of payment advice file and view status change history View payment files sent to the Bank (via standard DME logs) Resend payment advice files Reverse payment advice sent to the Bank SAP Consolidated Payables Link 100 23

5.1 Resending/Reversing Payment Advices Procedure The payment file sent originally can be resent to the Bank when the file is rejected by the Bank or is lost in transmission. However, these functionalities can be accessed only with the authorizations given below: RESEND /USC2B/CCP REJECT /USC2B/CCP For the Payment message, the RESEND functionality is not allowed if the acknowledgement for the corresponding message (pain002 message) has been received and processed successfully. 1. Click the Resend button. The system searches for the file in the application server and resends the file if it is not found here. In certain scenarios, after having acknowledged the payment instructions, there may be a need to reverse the payment. In such a scenario, one needs to use the Reverse Payment functionality. For the credit instructions, the REJECT functionality is allowed only if the acknowledgement for the corresponding message (pain002 message) has been received and processed successfully. 2. In the Credit Instruction level screen, select a record and click the Reverse Payment button. 3. In the Reverse Payment pop up dialog, click the Yes button to confirm. 4. In the next pop up dialog, select a rejection code from the Reason Code field and add appropriate comments. 5. Press Enter. Result The payment document is reversed and a success message saying Payment document <doc num> is displayed in the status bar. SAP Consolidated Payables Link 100 24

5.2 Viewing Payment Advice Messages, Status, and Logs Procedure 1. After generating a payment advice, execute report USC2B/PAYMENT_MESSAGE_COCKPIT. 2. Enter the selection criteria and execute or press F8. the status Payment Medium Created is visible. 3. Select a row and double-click it to view the payment information/batches that are part of this group. 4. Select a line displayed at the Payment Information level and double-click it to view the payment instructions that are part of this batch. 5. Select a row and click the Status History button to see the payment status history. 6. Select a row and click the Message Log button to see the detailed log. SAP Consolidated Payables Link 100 25

6 Reconciliation Cockpit The payment instructions sent by your ECC system are forwarded as a funds transfer request by the Bank to counterparties either within the Bank or outside. The Bank will then send reconciliation statements (RCON1) to your ECC system to update and reconcile your books only for Payment Plus transactions. For other payment types, the Bank will not send any reconciliation statements. The Bank system sends a text file to your ECC system. The reconciliation files triggers an FF.5 transaction and follows the processes that are defined in your systems. A new transaction/usc2b/rcon1_cockpit is provided to view files. For more information on message formats, refer to US Bank RCON1 file specifications. SAP Consolidated Payables Link 100 26

6.1 Executing RCON Procedure 1. Execute report /USC2B/RCON1_COCKPIT. 2. Enter the selection criteria and execute it. The list of inbound reconciliation messages ALV with the details of the payment records is displayed. 3. Select a row and click the Payment Line Item Detail Records button. The list of payment line item details records ALV (which typically contains the invoice details) is displayed. 4. In the Payment Details list screen, click the Show Log link. 5. Start transactional11 and navigate to the Inbound > Archive directory. The processed file is moved from the Inbound > New folder to the Inbound > Archive folder. For more information on various file record details, refer to US Bank RCON1 file specifications. SAP Consolidated Payables Link 100 27