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Process documentationCompensation

 

Purpose

You can use this process to offer large companies or groups of companies that have numerous accounts at a bank optimized interest and charge provisions. During a combined settlement for a master contract the system compensates the relevant turnovers of all participating accounts by virtually offsetting debit and credit balances. The settlement itself takes place in the account-managing system.

Advantages for the account holder: Overdraft interest is avoided and credit interest increased. Using this process can also mean that the account holder pays fewer charges for certain transactions or services or that you can offer better conditions for charges.

Special Features

  • Every master contract can have individual conditions.

  • A master contract can itself be a participant of another master contract.

  • Master contracts can be assigned to a multi-level master contract hierarchy.

  • Compensation is executed periodically for every due master contract hierarchy. The time periods stored on the main master contract apply for the entire hierarchy.

  • The currencies of the participant accounts of a master contract can be different.

  • The participant accounts of a master contract can be managed in different systems.

  • The account holders of the participant accounts can be different.

Process Combinations

Note Note

You can combine this process with other processes in Master Contract Management. For an overview of all combination options, see Master Contract Management (FS-MCM).

End of the note.

Prerequisites

Before you can use this process, you must install the following components:

  • Master Contract Management (FS-MCM) with the following functions:

    • Master Contract

    • Financial Conditions

    • Payment Details

    • Product

    • Combined Settlement with the Compensation Feature

  • Account Management (FS-AM) with the account function, or another account-managing system

For notes about the options for using external systems, see Communication Between Logical Systems.

Settings in Customizing for Master Contract Management (FS-MCM)

Settings in Customizing for Master Contract Management (FS-MCM)

Under Start of the navigation path Product Management Next navigation step Product Definition Next navigation step Master Contract Products Next navigation step Create Master Contract End of the navigation path or Change Master Contract Product you have defined a master contract product for which the following feature attributes are active and the corresponding settings have been made:

  • Combined Settlement

    • General Attributes

    • Compensation

  • Contract Relationships

    • Participation Conditions

    • Functions

  • Financial Conditions

    • Condition Groups

Process

  1. Define Condition Type

    In Customizing for Master Contract Management, choose Start of the navigation path Product Management Next navigation step Financial Conditions Next navigation step Define Condition Types End of the navigation path and define condition types to suit your requirements, in addition to the standard conditions (such as debit interest, credit interest).

    For more information, see the documentation for the Customizing activity.

  2. Define Condition Group Types

    In Customizing for Master Contract Management (FS-MCM), choose Start of the navigation path Product Management Next navigation step Financial Conditions Next navigation step Maintain Condition Group Types End of the navigation path and create a condition group type for compensation. Group together the conditions types for compensation in the new condition group type.

    For more information, see the documentation for the Customizing activity.

  3. Define Condition Group

    On the SAP Easy Access screen choose Master Contract Management Start of the navigation path Current Settings Next navigation step Financial Conditions Next navigation step Condition Group Next navigation step Edit Condition Group End of the navigation path and create one (or more) condition groups for compensation. Group together all standard conditions created on the basis of the condition group type created previously.

    For more information about conditions, see the documentation for the Financial Conditions (CA-FIM-FCO) component, particularly in the Condition Processing section.

    The condition groups defined by you and their conditions are displayed as a table in master contract processing on the Financial Conditions tab page.

    For more information, see Editing Financial Conditions.

  4. Connection of Settlement Type and Condition Group

    In the master contract product (in Customizing for Master Contract Management under Start of the navigation path Product Management Next navigation step Product Definition Next navigation step Master Contract Products) End of the navigation path you can assign a condition group to a settlement type in the attribute hierarchy by choosing Start of the navigation path Financial Conditions Next navigation step Condition Groups End of the navigation path. When you create a master contract product with the above-named attributes, this connection of settlement type and condition group is copied from the product.

    For more information, see the documentation for the Customizing activity.

    Note the dependencies of the condition groups if you use multiple combined settlement tracks. For more information, see Use of Multiple Combined Settlement Tracks.

  5. Define Combined Settlement Type

    In Customizing for Master Contract Management, choose Start of the navigation path Master Contract Applications Next navigation step Combined Settlement Next navigation step Track-Specific Settings Next navigation step Define Combined Settlement Type End of the navigation path and define the settlement type Combined Settlement.

    For more information, see the documentation for the Customizing activity.

  6. Define Combined Settlement Track

    In Customizing for Master Contract Management, choose Start of the navigation path Master Contract Applications Next navigation step Combined Settlement Next navigation step Track-Specific Settings Next navigation step Define Combined Settlement Track End of the navigation path and define one or more settlement tracks.

    For more information, see the documentation for the Customizing activity.

  7. Assign Combined Settlement Type to Combined Settlement Track

    In Customizing for Master Contract Management, choose Start of the navigation path Master Contract Applications Next navigation step Combined Settlement Next navigation step Track-Specific Settings Next navigation step Assign Combined Settlement Type to Combined Settlement Track End of the navigation path and assign the previously defined settlement type combined settlement to one or more settlement tracks.

    For more information, see the documentation for the Customizing activity.

    Note Note

    For a combined settlement, you can define multiple settlement tracks and assign them to master contracts. Since every settlement track can have its own time periods, you can execute the combined settlement for compensation at different times and for multiple participant accounts/master contracts simultaneously.

    End of the note.

    Caution Caution

    Only assign a condition type once for each settlement track.

    End of the caution.

  8. Define Time Periods for Combined Settlement Track

    In Customizing for Master Contract Management, choose Start of the navigation path Master Contract Applications Next navigation step Combined Settlement Next navigation step Track-Specific Settings Next navigation step Define Time Periods for Combined Settlement Tracks End of the navigation path and define one or more sets of time periods for period application category BCCS Combined Settlement.

    For more information, see the documentation for the Customizing activity.

  9. Define Days of Month for Time Periods

    If you choose year or month as period unit, you need to define the details more precisely. In Customizing for Master Contract Management, choose Start of the navigation path Master Contract Applications Next navigation step Combined Settlement Next navigation step Track-Specific Settings Next navigation step Define Days of the Month for Time Periods End of the navigation path and define calendar months and/or days of the month.

    For more information, see the documentation for the Customizing activity.

  10. Create Participating Accounts

    Create all the account contracts that you wish to assign to the master contract in the account-managing system (normally the Account Management system).

    For more information, see Creating Accounts

  11. Create Master Contract

    On the SAP Easy Access screen choose Start of the navigation path Master Contract Management Next navigation step Master Contract Master Data Next navigation step Create Master Contract End of the navigation path. Create a master contract on the basis of a master contract product that meets the above-mentioned requirements.

    For more information, see Creating Master Contracts.

    1. Edit Combined Settlement

      On the Combined Settlement tab page in the Time Periods group box, define the time and frequency (time periods) at which you want the combined settlement for the combined settlement tracks to be executed for a specific master contract.

      For more information, see Editing Combined Settlements.

    2. Assign Participants

      Choose the Contract Relationships tab page and assign either another master contract or a participant account that you have created in the account-managing system to the master contract.

      For more information, see Editing Contract Relationships.

    3. Specify Payment Details

      In master contract processing, choose the Payment Details tab page and in the Settlement Payment Details tab page assign a reference account to payment details type 200000 (Complete Settlement) for the combined settlement.

      For more information, see Editing Payment Details.

  12. Execute Combined Settlement

    Note the prerequisites for reports Execute Combined Settlement and Execute Combined Settlement - Mass Run described in the system documentation.

    .If you have stored time periods for the combined settlement, the system executes report Execute Combined Settlement - Mass Run at the scheduled time, (such as during end-of-day processing) periodically for multiple master contracts.

    If you have not stored any time periods for the combined settlement or wish to execute one for a master contract outside the regular time periods, start an individual run: Execute Combined Settlement.

    For more information about starting the report and the functions the system executes during a combined settlement, see Executing Combined Settlements - Bundle Pricing Calculation and

    Executing Combined Settlements - Compensation.