1907 Treasury Management Workstation

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Orange County Convention Center

Orlando, Florida | May 15-18, 2011

Treasury Management Workstation:A Practical Guide to Getting Online

Byron Bennett - Graybar

Bill Biddle - Graybar

Real Experience. Real Advantage.

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Company Profile for Graybar

Founded – 1869 by Elijah Gray and Enos Barton

Employee owned – 1929

Fortune 500

Based in St. Louis, MO


[ Company Profile for Graybar

Business Volumes:

$4.6 billion sales (2010)

825,000 SKUs – 12+ million plant / material records

250,000 customers

30,000 billing docs / day

6,500 employees

4,500 suppliers

250+ locations

Distribution centers, branches, and counters

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Graybar’s System Landscape

SCM 5.0

ECC 6.0 – 7 TB database

ECC 6.0 – HR

EP 7.0

BW 7.0 – 3.5 TB database

CRM 7.0

APO


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Learning Points

Streamline bank accounting and reconciliations with

Treasury Workstation.

Use electronic bank statements, debt instruments, leases, and

future cash transactions to feed Cash Position and Liquidity

Forecasting.

Improve controls and efficiencies by integrating Treasury

functions with AP and Accounting processes.


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Why Treasury Workstation?

Manual Cashbook was prone to errors

Bank Statement recons were a multi-day job

Creating Fedwires required logging into Bank Websites

Cash Position reporting required logging into Bank Websites

and spreadsheet calculations

Liquidity Forecast was completely manual

Debt Instruments were being tracked in spreadsheets multiple

times by Accounting and Treasury


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Project Goals

Improve Controls and Visibility in Treasury Functions

SOD

Audit Trails

Streamline / Eliminate Manual Processes

Manual Cashbook – replaced with EBS

Manual Bank Recons – simplified with EBS

Fedwires – enabled through SAP

Cash Position Reporting – automated (thanks to EBS)

Liquidity Forecast – automated to extent possible (Phase II)


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SAP Treasury Applications

• EBS, Payments, Lockbox…

• Cash Position & Liquidity Forecast reporting

Cash & Liquidity Mgt

• Transaction Mgr – hedging, investing, debt

• Analyzers: Mkt Risk, Credit Risk, Portfolio

Treasury & Risk Mgt

• Virtual bank for global Companies

• Reduce external Bank Accts, and Transactions

In-House Cash

• Deep integration w/ Banks for Payments

• Integration with SWIFTNet

Bank Comm. Mgt


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Project Overview

2.5 month project (Oct. – mid Dec.)

1 SAP Treasury Consultant

In scope for Phase 1

Clean up closed bank accounts, etc

Configure banks and accounting for EBS

Turn on EBS for BOA (our main bank)

Integrate Positive Pay / Encashment with GL

Implement Fedwire with BOA

Produce basic Cash Position report


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Graybar Banking Structure


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Electronic Bank Statements – Process Overview

1. FTP statements from Bank

2. PGP decryption

3. Loads files to SAP via T-code:

FF.5 (SE38: RFEBKA00)

• SAP runs Pre-processor

on upload

• Posts to GL

Automated via TIDAL

Manual Process: Accounting Dept.

5. Post-processing via

FEBA_BANK_STATEMENT


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EBS – Setting Up for EBS

Goal: Remove as much Human Interaction as possible

Uses Industry Standard BAI2 format (some assembly

required)

Work closely with Bank

They will set up a Project Team to work with you

Plan your Accounting structure for automatic clearing

Use line-item managed accounts for clearing

Configure posting rules

Set up communications


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EBS – Optimize for Automatic CLEARING

Plan your GL Accounts and Accounting flow for Clearing

Set up accounts to post to same clearing account if they clear

against each other

Sweep accounts, lockboxes, etc

Clearing Acct

ZBA Sweep

Concentration

Lockbox Sweep

Checks Outstanding

Payment AcctEncashment


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EBS – Posting Rule Configuration Items

Centrally configured through T-code: OT83

Several layers of abstraction in this configuration

GL Accounts

Account Symbols

Posting Rules

Transaction Types

External Transaction Types

Bank Keys + Bank Accounts

Here’s how they fit together…


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EBS – How SAP Interprets the Bank Statement

Bank Statement Bank AccountsGets Transaction Type

Gets Account Symbol from Posting Rule Definition

External Trans. Codes

Determines Posting Rule

GL Posting!

Uggg…

Gets GL Acct from Acct Symbol

Uses Transaction Type and External

Transaction Code to determine Posting

Rule


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EBS – Dealing with Posting Exceptions – Method 1

Method 1: Note to Payee (User Exit)

Searches for matches in the Note to Payee lines then modifies

the GL Account by picking an Account Modifier

Advantages

Simple to implement

No Transports – update/add records in Production

Disadvantage

Only updates GL Account (at least the way we did it)

Configure in OT83, “Assign

Accts to Account Symbols”

Account Modifiers


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EBS – Dealing with Posting Exceptions – Method 2

Method 2: String Search for Document Numbers SPRO: Financial Accounting > Bank Accounting > Business Transactions >

Payment Transactions > Electronic Bank Statement > Define Search String…

How it works

Define Search Strings to search for in Note to Payee field

Assign Interpretation Algorithms that will interpret found strings

and produce a “result”

Set a Target field that will be updated with the “result”

Advantages

No ABAP

Can update VARIOUS fields: cost center, GL account, etc

Disadvantage

Requires configuration / transports to add new rules


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Fedwire Basic Flow

Setup – BP,

Vendor, Bank

Create Rep.

Codes (OT81)Create Pmt.

Request (FRFT)

Pmt Run for Pmt

Requests (F111)Encrypt File

(if not EDI)Send to Bank

FTP or EDI

Bank sends

Confirmation

Secure bank info with Confirm Changes


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Setting up for Fedwire

Use the Data Medium Exchange Engine (DMEE) to build file

format

Set up communications


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Feeding Your Forecast! Cash Position & Liquidity

Cash Position Liquidity Forecast

TreasuryDebt Inst.,

Leases, etc

FI-AP,

FI-AR, MM,

SD, etc

Payment

Advices

Bank

Statements(current day)

Set Planning Level in GL Accounts

Memo

Records(manual input)

• Where do we stand today on cash?

• Determine borrowing / investing activities

• Mid-term view of liquidity

• Plan for major Cash events


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Cash Position Reporting

T-Code: FF7A

Will load 2 presents of current-day Bank Statement

Standard report is a Drill-down Report


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Lessons Learned – Activate Extensions

Activated EA-FIN

Post-processing Electronic Bank Statement

(FEBA_BANK_STATEMENT, FEBA_LOCKBOX)

(!) Changes FEBAN a little bit…Test Lockbox roles

Lease Accounting

Activated EA-FS

Transaction Manager and other Treasury business functions

BASIS activates extensions


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Lesson Learned – EA-FIN Changes T-Codes

Activating EA-FIN changes FEBAN and FLB1

FEBAN now points to either FEBA_BANK_STATEMENT

or FEBA_LOCKBOX

Depending on last one used

FLB1 (same as FEBA_LOCKBOX) gets a “new do”

You can still access old view


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Lessons Learned – FLB1’s “New Do”

Lockbox Processing defaults to a new View


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Lessons Learned – “Oh, Yeah…Year End”

Be mindful of YE / Quarter-end closes in your timeline

Bad times for new functionality – makes Accounting nervous

BOA EBS go-live in 6 weeks, not 10 as originally thought


[ Wrap Up – The Payoff!

Efficiencies:

Eliminated manual cashbook

Reduced classification errors

Increased Lockbox post-processing efficiency

Abnormal items are segregated to separate GL account during EBS

upload

Improved Bank Recons

Controls:

Process standardized and automated

Positive Payee and Bank Info Confirmations

Encashment files loaded from banks to GL

(clears Checks Outstanding)

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[ Best Practices

Design accounting process for automatic clearing

Improve automatic posting hit rate with Note to Payee

Consider Cash & Liquidity Management up front

Use Planning Levels as appropriate

Plan go-lives for non-critical business times

Make cut-over easier by giving Outstanding Checks chance to

flush through system

I.e. don’t pay with cut-over bank for 2-3 weeks prior to go-live

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[ Key Learnings

SAP has full range of applications for managing the Treasury

Function

You may need to “Activate” functionality in BASIS

Bank Statement postings can be automated by up to 95%

Note to Payee is key to determining accounts/cost centers

Cash Positioning can be accurate and automated via EBS

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Resources

“Quick Facts: SAP Treasury Applications”. http://www.slideshare.net/ToddWilmsSAP/quick-facts-sap-treasury-applications.

“SAP Bank Communication Management – Overview and

Strategy”. http://www.slideshare.net/ToddWilmsSAP/sap-bank-communication-

management-overview.

Krishnan, Arjun, and Alamanda Balaji Kumar.

Sox Compliance with SAP Treasury and Risk

Management. Boston: Galileo Press Inc.,

2009.

http://www.slideshare.net/ToddWilmsSAP/quick-facts-sap-treasury-applications









http://www.slideshare.net/ToddWilmsSAP/sap-bank-communication-management-overview










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1907 Treasury Management Workstation

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