Streamlining Payment Processes with SAP BCM

Bank Communication Process

SAP BCM, also known as SAP Business Communication Management, provides functionalities for managing and optimizing customer interactions across various bank communication channels. It also supports the communication of financial transactions of a company to its banks via the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.

Fig: 1 Image Source: SAP Learning Hub

In SAP Bank Communication Management, the basic processes include:

• Batching payments: This process groups multiple payment transactions to process and execute as a batch. Instead of processing each payment individually, the system consolidates them into a batch. The batching of payments feature allows for grouping payments based on customized logical rules, providing a highly flexible tool to batch similar payments. It enables various possibilities, such as grouping payments for the same vendor or payments falling within a specific range (for example, 15,000 – 25,000 EUR).
• Approval of batches: Batch approval is the act of reviewing and authorizing payment batches before sending them for processing. Organizations establish approval workflows to ensure the accuracy, authorization, and compliance of payments within a batch with internal policies and regulations. This process involves assigning specific staff members with the authority to approve payments. The final approver generates payment media only after providing their signature, thereby reducing the possibility of manipulating payment files. Moreover, the use of personal digital signatures simplifies internal audit processes.
• Status tracking: The system enables users to monitor and track the status of various customer interactions or processes in real-time. It provides up-to-date visibility into the progress and current state of specific activities or transactions, empowering users to stay informed and take necessary actions. The system receives information from multiple sources, including the batching process, the approval process, and the SAP Integration Package for SWIFT.
• Bank Statement Monitor: Within the system, the Bank Statement Monitor allows users to centrally monitor and reconcile bank statements. It provides a centralized view of bank statement data, enabling users to track and reconcile incoming bank transactions with their corresponding records.

Figure 1: Key Features and Benefits of SAP Bank Communication Management

Status tracking facilitates the monitoring of payment orders throughout their lifecycle, starting from the approval stage until the bank executes them (assuming the bank provides status messages). It also allows for the visibility of errors, and users have the option to customize the automatic generation of alert workflow items.

By requiring only one interface to connect with banks, the system simplifies payment processes into a single streamlined process.

Fig: 2 Image Source: SAP Learning Hub

Figure 2 illustrates how SAP Bank Communication Management (BCM) Communicates with Bank using SWIFT Network.

1. 1. SAP ERP initiates the payment order and sends it to SAP NetWeaver Process Integration (PI).
   2. SAP PI sends the payment order to Swiftnet via SwiftAlliance Gateway, using the SAP Integration Package for SWIFT.
   3. SWIFT confirmation to SAP ERP
   a) SWIFT sends a confirmation (acknowledgment) to SAP PI, which forwards it to SAP ERP.

 

1. b) SAP ERP receives the acknowledgment and updates the payment status in SAP BCM.
   1. Status confirmation from SWIFT to SAP ERP
   a) Swift sends a confirmation (delivery notification) to SAP PI, which forwards it to SAP ERP.

 

b) SAP ERP receives the delivery notification and updates the payment status in SAP BCM.
1. SwiftAlliance Gateway transfers the payment order to the bank.
2. The Payment Engine receives the payment order for processing without requiring mapping.
3. After validating the payment order, the Payment Engine sends a status message back for validation.
4. The bank sends the status message to SWIFT.
5. SWIFT forwards the status message to SAP ERP.
6. SAP ERP receives the status message and updates the payment status in BCM.
7. The bank generates a bank statement (MT940).
8. SwiftAlliance Gateway transmits the bank statement.
9. SWIFT sends the bank statement to SAP PI.
10. ERP receives bank statements and updates the bank statement monitor.

To summarise, SAP Business Communication Management (BCM) offers a comprehensive solution to group payments into batches and obtain approval before processing minimizes errors, and provides greater control over payment transactions. Real-time status tracking empowers users to stay informed and take necessary actions promptly. The centralized Bank Statement Monitor simplifies the monitoring and reconciliation of bank statements, ensuring accurate financial records.

Overall, SAP BCM serves as a robust tool to improve communication processes, enhance transparency, and optimize customer interactions, ultimately contributing to operational efficiency and customer satisfaction.