Innovative Bank Communication Management with SAP S4 Hana

Assumption: Reader has basic knowledge on Accounts payables and is aware of FBZP set up in the system.

BCM stands for Bank Communication Management, which is a component under FSCM (Financial Supply Chain Management). BCM is responsible for communication with a bank in terms of payments sent, acknowledgments received and approval workflows before payments are sent to the bank. Having said that BCM does not send payment files to banks. It’s a middleware that picks up the file, encrypts it, and sends it to the bank. BCM is responsible for the grouping of payments, merging of batches, approvals for batches, and generating the payment batch. These batches get updated in the bank monitor. Upon receiving responses/acknowledgments from the bank, the bank monitor gets updated with appropriate status. In short, bank monitor is your single source of truth for payment batches.

Bank Communication Management in SAP S4 Hana: Basis Team Responsibility

The BCM module is enabled in the system.

A package is established to facilitate the transportation of rules for workflows to other systems.

Activation of workflows takes place, which is a technical task rather than a functional one. You can verify if all standard workflows are activated by using transaction code SWU3.

To be performed by functional consultant:

Ensure that the workflow templates and tasks are designated as general tasks. To accomplish this, access transaction PFTC. Modify the task type and task by selecting “edit” to designate it as a general task. If this step is not completed, your batch will not be visible in the bank monitor (BNK_MONI/BNK_MONIP). The following list outlines the task types that require updating or verification:

Warning: Please do not change the classification in any case. This will cause errors and workflows will not work.

  • Update all relevant workflow objects and/tasks to “general tasks”. Without doing this you will not be able to use bank monitor. This activity will enable the batch updates in bank monitor.

This blog will focus on a simple business scenario where we have established approvals and created appropriate rules, roles, and responsibilities.

As mentioned earlier, Bank Communication Management (BCM) is an integral component of the Financial Supply Chain Management (FSCM) module in SAP. The following section outlines the specific node dedicated to BCM within the system.

Basic settings:

Go to the IMG menu, then select SPRO. From there, navigate to FSCM and click on BCM. Look for the option called Basic settings and choose Basic settings for approval.

Here are the standard initial configurations for a payment batch. Choose the option for signature requirement only if there are designated signatories listed in BAM (Bank Account Management). Express this information using your own words without adding any additional details, while keeping in mind that you should provide distinct text. Write it in English suitable for readers in India.

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Navigate to the following path in SAP S4 Hana Bank Communication Management: IMG>>SPRO>>FSCM>>BCM>>Payment grouping>>Rule maintenance.

In the next step, you will need to generate a guideline that will be utilized in the subsequent workflows. These guidelines are formulated according to the specific needs of the business.

These regulations are implemented for duties established according to the assigned level of importance.

To preserve the rule, choose and mark the row for rule maintenance.

Revise the rule criteria as per your specific needs for the rule.

Navigate to the Implementation Guide (IMG) and select the SAP Project Reference Object (SPRO). From there, go to Financial Supply Chain Management (FSCM), then Bank Communication Management (BCM). Within BCM, access the Release Strategy section and proceed to Change and Release. Finally, assign a role to each of the release steps.

  • Click on the new entries above and add “BNK_INI” as a release object. This release WF task is activated by basis and is a standard workflow that is delivered with the SAP BCM module.
  • Select “01” from the drop-down for required release. This is your first-level approval of the dual approval workflow.
  • Select “1” from the drop-down for the WF release step. As mentioned above this is your first step approval.
  • Hit enter and save to generate rule number. This rule number is auto-generated in the system. Do not enter rule number manually.

Save and choose the regulation to establish accountability.

Generate accountability by implementing regulations established for payment categorization.

After saving, the responsibility status changes from red to green. Choose the responsibility and click on “insert agent assignment” to include the users who are accountable for releasing the payment batch at the initial level.

Choose the user and modify the SAP user ID of the person who approves.

Go to the IMG menu, then select SPRO. From there, navigate to FSCM and click on BCM. Next, go to Additional release steps and proceed to assign roles to each release step.

Follow the same procedure as it was done for the first-level approver. This time only workflow task changes to “BNK_COM”

Add agents for second level approvers in the same way as it was done for first level approvers mentioned earlier.

Define release procedure:

Click on the “Create” button to initiate the second level approval workflow by selecting the appropriate conditions and utilizing the previously established rule ID.

To access the release procedure, simply click on the dropdown menu and expand the folder. In this section, we typically choose the rule id, but you have the flexibility to select any other option that aligns with your specific business needs.

Select the desired choices displayed on the screen below. Utilize the drop-down menu whenever necessary.

Select the save option and include it in a customized transport.

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Assigning Workflow Template to Release Procedure

Allocate the workflow template that is currently being utilized for the release process.

Automatic Approval Guidelines for Mark Rules

In this section, you can indicate whether you prefer to enable automatic approval of payment batches or if you would like the approver to review the batch details before giving their approval.

Choose the suitable choice based on the needs of the business. Select the appropriate option according to the requirements of your organization.

The following section discusses the fundamental setup for Bank Communication Management (BCM). BCM provides the option to customize batch grouping based on your preferences. This can be achieved by incorporating additional criteria for payment grouping, as described below.

Choose the desired group fields from the dropdown menu and allocate priority based on specific needs.

Take a look at my upcoming blog post about the management of payment statuses and monitoring bank statements. Stay tuned for more information on this topic.

Note: I have covered only BCM basic configuration. Payment status management and bank statement monitor will be covered in next blog.

Please feel free to leave a comment if you have any queries or require further explanations.

The role of BCM in SAP

SAP S/4HANA Bank Communication Management (BCM) offers a comprehensive solution for setting up and overseeing communication users, ensuring secure and authenticated communication with banks. This functionality is crucial in maintaining the necessary security measures while exchanging sensitive financial information.

Furthermore, SAP BCM provides robust security features to safeguard confidential banking information. It enables organizations to establish secure connections using various authentication mechanisms, ensuring that only authorized individuals can access sensitive data during communication with banks. These security measures help prevent unauthorized access or potential breaches that could compromise critical financial transactions.

In addition to enhancing security and integration capabilities, SAP BCM also offers advanced functionalities such as monitoring and reporting tools. Organizations can monitor their bank communications in real-time, track transaction statuses, identify any issues or delays promptly, and generate comprehensive reports for analysis purposes. These features enable businesses to have better visibility into their banking activities and make informed decisions based on accurate data.

Overall, SAP S/4HANA Bank Communication Management plays a vital role in optimizing financial processes by providing secure communication channels with banks while seamlessly integrating with other modules within the ERP system. Its robust security measures ensure confidentiality while offering monitoring tools that enhance transparency and decision-making capabilities related to banking transactions

What is SAP bank Communication Management option for multisystem payment consolidation?

SAP Bank Communication Management is a software solution that offers the capability of consolidating payments from multiple systems. It provides an inbound interface through which payment medium files with standardized data formats can be sent from external systems or other SAP systems to SAP Bank Communication Management for processing. This functionality allows for seamless integration and efficient management of payment transactions within an organization.

With SAP Bank Communication Management, organizations can streamline their payment processes by centralizing all incoming payment information in one system. The software supports various file formats commonly used in banking communication, ensuring compatibility with different financial institutions and systems. By standardizing the data format, it becomes easier to process and reconcile payments across multiple platforms.

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Distinguishing SAP MBC from BCM

The SAP module, also known as MBC (Bank Communication Management), plays a crucial role in facilitating direct communication between the SAP system and various banks. This module, commonly referred to as BCM (Bank Communication Module), lives up to its name by enhancing and streamlining communication processes with banks.

With the MBC module integrated into the SAP system, organizations can establish seamless connectivity with multiple banks. This enables them to efficiently manage their financial transactions, such as payments and collections, through a centralized platform. The MBC module acts as an intermediary that facilitates secure data exchange between the SAP system and different banking partners.

By leveraging the capabilities of MBC, businesses can automate their bank-related processes while ensuring accuracy and compliance. The module supports various communication protocols like SWIFT (Society for Worldwide Interbank Financial Telecommunication) and EBICS (Electronic Banking Internet Communication Standard). These protocols enable standardized messaging formats for transmitting financial information securely between systems.

P.S: With its robust features and integration capabilities within the SAP ecosystem, Bank Communication Management empowers organizations in India to optimize their banking communications effectively. By utilizing this powerful toolset offered by SAP S/4HANA Bank Communication Management, businesses can streamline their financial operations while maintaining strong relationships with their banking partners.

What is the top SAP module for banking?

As you are CSE engineer you can easily grasp the concepts in SAP ABAP (Advance business application programming). In Engineering you have studied programming languages for sure. But FICO (Finance and controlling) will be the best module for you as you have experience in banking sector.

What is the benefit of BCM?

One significant benefit of having a BCMS in place is the ability to maintain uninterrupted business activities during unforeseen events or crises. This means that even in challenging circumstances like natural disasters or pandemics, companies can continue providing goods and services to their customers without major disruptions. As a result, they are able to generate revenue consistently and sustain their financial stability.

Moreover, an effective BCMS helps businesses retain a solid reputation among stakeholders. When faced with unexpected challenges, organizations that have implemented proper risk management strategies demonstrate resilience and reliability. This not only enhances customer trust but also strengthens relationships with suppliers, partners, investors, and regulatory bodies.

Furthermore, by ensuring business continuity through a well-designed BCMS framework, companies gain a competitive edge in the market. They are better equipped to respond swiftly to any disruptions while minimizing downtime or loss of productivity. This agility allows them to adapt quickly to changing market conditions and seize new opportunities for growth.

The significance of BCM and its importance

BCM (business continuity management) describes the process of planning for disruptive incidents. Organisations do this by identifying potential threats and analysing their impact on day-to-day operations.