Settlement (FS-AM-EP-ST) 
Purpose
This component includes all functions that are required for running the interest and charge settlement in a bank. You are provided with the functions for individual and mass settlements. The settlement results (for example, debit or credit interest, or charges) are calculated using diverse factors such as conditions, periods, or balances. These are then debited or credited to an account of the bank customer. You can use the functions in this component to run the following types of settlement:
Master Contract Settlement and Interest Compensation
In the settlements listed above, the settlement period determines the period of time for which the interest and charges are to be calculated. You can set up the settlement period in the product or directly in a contract. The period factor and thus the settlement frequency can be selected from daily to x-yearly. The last day of a settlement period automatically determines the first day of the subsequent period.
A contract (such as an account or card) is then due for settlement if the settlement date in the master data is on or before the selection date for the settlement. Contracts are selected for the calculation of interest and charges according to the settlement date, the bank posting area, and the product:
Scope of Functions
During settlement, the system performs the following tasks:
...
· Find settlement period
· Select due contracts (such as the card pool, or master contract)
· Read day-end balances for period to be settled
· Calculate and post interest and charges
· Increase date of next period end.
· Transfer interest and charges to tax calculation module, if appropriate.
· Also make corrections to settlements for past periods for value dates in the past.
Postings within a settlement are made with the end date of the period to be settled as the value date, and the posting date that is stored in the system. (On setting the posting date, see Setting the Posting Date)
In Account Management, a distinction is made between the posting date for payment transactions and the posting date of end-of-day processing. Once the postings for payment transactions have been completed and the date increased, you can execute a settlement. This means that the posting date of end-of-day processing is before the posting date for payment transactions. The system does not check this.
Process Flow for Interest and Charge Calculation
1. Selection of the contracts
The due contracts (contracts whose period end is on or before the selection date) are selected according to the next period end, bank posting area, and product.
2. Dispatching and parallel processing of the process flow
The contracts are divided into packages and these are distributed to various processors or servers. You can set the size of the intervals in the Implementation Guide by choosing Tools ® Parallel Processing.
3. Processing
The following processing steps in the various areas are performed for each due contract:
¡ Contract master data: The next period end stored in the contract master data serves to determine the periods to be settled.
¡ Conditions: The conditions and limits stored in the system are used for the contracts to be settled. If no individual conditions are stored, the standard conditions always apply. With regard to limits, only the overdraft limit is used for settlement.
¡ The value date-based daily balances are determined.
¡ Item counter: The system reads the item counters to calculate the charges and dispatch expenses due. The value valid at the period end is used for charge determination.
¡ Contract settlement table: Calculation of interest and charges.
¡ Tax calculation: Transfer of the required data to the tax calculation module.
¡ Posting the contract settlement: The interest and charges are posted. The system creates a document containing several items (one for each condition category). Separate documents are created for adjustment postings of old periods. The data is transferred to the general ledger and the account is updated.
You have nine different options for calculating interest and charges in connection with the next period end date and posting date of the transactions.
The following table shows the possible combinations of value date and posting date and how they are considered during settlement. As an example, February is the period to be settled, January is the period already settled and March is the following period. The above graphic can be interpreted as follows:
Data |
Interest calculation |
Charge calculation |
1 Posting date and value date are the same, in this case January 2. |
No The period is balanced and is not adjusted. |
No The period is balanced and is not adjusted. |
2 Posting date is Jan. 2 and value date is Feb. 5. (value date in the future at last settlement). |
Yes Interest occurs in the period to be balanced - February |
No Charges are levied when the item is posted, in this case, January. |
3 Posting date is Jan. 2. and value date is Mar. 3. |
No (Reason: Interest will be calculated at the next settlement). |
No (Reason: Charges already calculated at the last settlement). |
4 Posting date is Feb. 5 and value date is Jan. 3. (Value date in the past). |
Yes The period is recalculated. |
Yes Charges are levied when the item is posted, in this case in the period to be balanced - February. |
5 Posting date is Feb. 5 and value date is Feb. 6. (Normal case). |
Yes |
Yes |
6 Posting date is Feb. 5 and value date is Mar. 4. (Value date in the future). |
No (Reason: Interest will be calculated at the next settlement). |
Yes Item charges incur that are levied in this current period. |
7 Posting date is Mar. 5 and value date is Jan. 4. |
No (Value dates in the past already known for the next settlement are not included, as interest calculation then dependent on time of settlement). |
No (Reason: Charges will be included in the next settlement). |
8 Posting date is Mar. 5. and value date is Feb. 7. |
No |
No |
9 Posting date is Mar. 5 and value date is Mar. 5. |
No |
No |
Capital Yield Tax
Capital yield tax (CYT) is calculated by a separate, user-specific module that you call up with a Business Transaction Event. Only accounts with the Calculate Capital Yield Tax indicator in the account are transferred.
If capital yield tax is to be calculated for adjustment periods, Account Management transfers the total interest. In this context, total interest means that all the interest from the adjusted period is transferred, rather than just the difference. In the example below, the total interest is EUR 12. However, Account Management requires the amount of the difference for further processing once the CYT module has calculated the yield tax.
Capital Yield Tax Module
The processing of the interest for capital yield tax with the user-defined CYT module is more or less equivalent to a processing step between different systems with no interruption. Below are details of the steps for each interval:
· Calculated interest is transferred to the CYT interface
· The CYT module calculates the capital yield tax
· The CYT module transfers the calculated capital yield tax back to Account Management.
· Account Management processes the data further
Error Handling:
If an error occurs during processing, Account Management terminates the processing. Once the error has been corrected, you need to restart account settlement. From the SAP Easy Access screen, choose Account Management ® Periodic Tasks ® Account Settlement ® Restart.
Adjustment Postings from Periods Already Calculated
Value dates in the past are postings from the current balancing period whose value date lies in a period that has already been balanced. Value dates in the past can occur in any previous period. The entire period is recalculated, with the inclusion of the value dates in the past. The result is compared with the interest of the last balancing. The difference is identified in the current settlement as adjustment resulting from value dates in the past.
· Post
If there is a value date in the past on the 31st of a settled period, this does not trigger a previous period adjustment. The 31st counts as the first day of a new period.
· Settlement balance
In the case of value dates in the past, the settlement balance of the period to be adjusted depends on the posting date of the adjustment period. There are three different cases:
If |
Then |
Posting date after the adjustment period but before or on the next due date |
Adjustment posting in the next settlement Example: January is the adjustment period. If the posting date is February 5, the adjustment posting is NOT contained in the settlement for January but for February. |
Posting date is after the next due date |
Adjustment posting in the next but one settlement Example: January is the adjustment period. If the posting date is March 17, the adjustment posting is contained neither in January nor in February. It is not contained in the settlement balance until March, as soon as this is settled. |
Example: Current period - February, adjustment period - January
Interest Adjustment to a Period Already Settled
Value dating describes the key date-related value date of an account balance or of an item on a customer account. On the value date, interest calculation starts for the changed balance resulting from an incoming or outgoing payment. If there is value dating to the past to a balanced period, the credit and debit interest and the overdraft interest for the balanced period has to be recalculated.
Value dates in the past in periods already balanced lead to the following results:
Calculated credit interest was too high |
Negative credit interest (account is debited) |
Calculated credit interest was too low |
Positive credit interest (account receives credit) |
Calculated debit interest was too high |
Negative debit interest (account receives credit) |
Calculated debit interest was too low |
Negative debit interest (account is debited) |
Calculated overdraft interest was too high |
Negative overdraft interest (account receives credit) |
Calculated overdraft interest was too low |
Positive overdraft interest (account is debited) |
The value date of the adjustment posting with the recalculated interest corresponds to the end date of the adjustment period.
Example
Period 1 was settled with credit interest amounting to EUR 10. A value dating in the past results in new credit interest amounting to EUR 12. The EUR 2 difference is not adjusted when the value date in the past is posted, but at the next settlement of period 2. This means that period 1 is recalculated in period 2 and the customer receives EUR 2 positive credit interest.