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SAP Solution Brief SAP ERP

Global Cash Management with SAP® In-House Cash

A Virtual Bank for the Way You Do Business Today
In today’s unpredictable global economy, corporate liquidity is key to financial health. With the SAP® In-House Cash application, ­ large enterprises – particularly those with global subsidiaries – can manage ­ liquidity by centralizing ­ fragmented cash balances ­ and payment processes in a virtual in-house bank.

Companies today face mounting pressure to conduct business in a smarter, leaner, and more cost-effective way. In an increasingly global economy, that means streamlining financial processes across organizational boundaries and international borders. Additionally, the global credit crisis has made it more critical than ever for companies to manage their cash positions and liquidity with greater vigilance. But as the number of global subsidiaries increases, so does the complexity of managing all the individual bank accounts supporting them, in addition to external payments (see the figure).

ments. As a result, enterprises can lower their costs, reduce their risks, and maximize their returns on cash.

The Power of Concentration
SAP In-House Cash helps companies like yours address the challenges associated with managing fragmented cash balances and payment processes by placing the responsibility in the hands of those who are most qualified – your treasury professionals. The application has the robust functionality to centrally manage global liquidity and payment transactions for the most complex orga-

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Fragmented Cash Management in Today’s Global Enterprise

The SAP® In-House Cash application enables the most complex, global corporations to gain control of fragmented cash positions and payment processes. By concentrating all cash accounts within one in-house virtual bank, the application allows companies to centrally coordinate intragroup and external pay-

nizations, while also providing the flexibility to support decentralized or hybrid organizational structures. With SAP In-House Cash, your central treasury can manage financing, investment, and hedging operations more effectively, resulting in greater operating ­

By rapidly facilitating internal transfers when individual subsidiaries experience cash flow needs. you can transfer cash Controlled Liquidity on a Regional and Global Level The centralized in-house bank can process both internal and external payments. ­Finally. Using SAP In-House Cash. it nets out the corresponding debit and credit balances across company units. Improved Enterprise Liquidity Management SAP In-House Cash enables more effective liquidity planning and supports critical investment decisions by providing a centralized view of both your company’s global cash balances and your subsidiaries’ payment transactions. as well as payable and receivable amounts owed between subsidiaries. SAP In-House Cash helps ensure continued liquidity – a vital advantage in uncertain times. What’s more. The in-house virtual bank yields significant cost efficiencies. It also reduces the burden of having to track and manage multiple bank relationships. The centralized in-house bank also facilitates lending between subsidiaries. As cash needs or surpluses arise. without incurring bank transfer fees or borrowing costs. maximizes cash positions for group entities.­ etween subsidiaries more easily and b less expensively. It expedites the netting process. If your subsidiaries do require external funding. payments to vendors. and reduce the resources required to maintain them. Rather than using external banks in each region where you do business. the . which maintains the cash with your external corporate banking partners. Such transactions include intercompany transfers. they can obtain more favorable terms from banks or capital markets by leveraging the collective borrowing power of the in-house bank. while reducing the costs associated with currency translations and bank transfers. ­ The SAP In-House Cash application also enables you to: • Automate incoming and outgoing payments for external trading partners and banks • Automate intragroup payment transactions • Generate internal bank statements for subsidiaries • Grant account overdrafts to subsidiaries • Calculate and manage interest and charges Greater Payment Control and Cost Efficiency With the SAP In-House Cash application. The application also improves cash flow transparency and liquidity planning by enabling access to complete and accurate cash flow data. your subsidiaries transfer their cash to accounts managed by the in-house virtual bank. while also providing the flexibility to support decentralized or hybrid organizational structures efficiency for your company. your company can centrally manage internal cash accounts for each subsidiary. and incoming payments from customers. subsidiaries can provide funds to other parts of the company without the need for physical cash transfers involving external banks. By centrally concentrating cash in an in-house virtual bank. decrease the number of global bank accounts. and increases net interest gains. SAP In-House Cash has the robust functionality to centrally manage global liquidity and payment transactions for global organizations. Via internal netting. The in-house bank then manages the processing of all payment transactions on behalf of your subsidiaries. you can lessen your dependency on external banks for funding. SAP In-House Cash eliminates losses due to value dating.

you have a unified view of all payment transactions across your company. SAP NetWeaver helps organizations evolve their current IT landscapes into strategic environments that drive business change. Because SAP In-House Cash manages accounts centrally.000 financial institutions worldwide The treasury applications from SAP are powered by the SAP NetWeaver® technology platform. Treasury Applications from SAP SAP In-House Cash is one of several treasury applications from SAP. thereby eliminating the value date differences between subsidiaries. positions. By enabling more effective cash and liquidity management. and optimizing cash and liquidity • SAP Bank Communication Management application for gaining end-toend visibility and control over the payment cycle • SAP Integration Package for SWIFT for providing standardized electronic communication with over 8. By facilitating internal transfers. Representing a comprehensive group of cash. they are part of the SAP ERP Financials solution. your company gains greater control over cash flow. It allows companies to compose new business solutions rapidly while obtaining more business value from existing IT investments.in-house bank manages all accounts for each subsidiary and maintains the accounts in the subsidiary’s local currency. leveraging its expertise in investing cash and implementing strategies that minimize the risks of currency and interest rate fluctuations. the in-house bank can cover the respective payment obligations. from banks. along with improved scale advantages and competitive offerings in the capital markets. and financial risk management offerings. the in-house bank can also create account overdrafts on short notice. lower interest rates. By handling payments between subsidiaries without using external banks. If cash is tight for a particular subsidiary. the treasury applications from SAP include the following: • SAP Treasury and Risk Management application for analyzing multiple risk exposures and managing financial transactions. As the technical foundation for service-oriented architecture (SOA). your company can also benefit from more favorable borrowing terms. while your subsidiaries accelerate the netting process. along with clear visibility into the liquid funds available in each subsidiary account. By pooling cash in the central treasury. you have a unified view of all payment transactions across your company. This also helps reduce the float or transfer time for a payment. ensuring sufficient levels of liquidity to finance your core business operations is a prerequisite to success. You can maximize investment income by relying on your central treasury to invest surplus cash. liquidity. along with clear visibility into the liquid funds available to each subsidiary. the SAP In-House Cash application also helps you realize these important benefits: • Streamlined internal and external payment transactions • Optimal liquidity and cash availability where and when it is needed • Reduced currency exchange and value date losses • Maximized investment returns on cash • Hedges against cash flow difficulties and foreign exchange risks Because SAP In-House Cash manages accounts centrally. SAP In-House Cash enables you to avoid the associated transfer fees charged by external banks. Business Benefits In today’s fluctuating global economy. SAP NetWeaver helps companies align IT with business requirements. ­ allowing you to configure and rapidly ­ deploy the specific functionality you need to meet your individual business needs. managing. Together with SAP In-House Cash. These applications are modular in design. • SAP Cash and Liquidity Management application for more effectively forecasting. As a result. and reduced fees . and financial risks Investment and Borrowing Advantages ­ The SAP In-House Cash application helps you take advantage of more favorable investing and borrowing opportunities.

and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world.com/financials. without representation or warranty of any kind.sap. and SAP Group shall not be liable for errors or omissions with respect to the materials. and manage payment transactions for your entire organization • Liquidity planning – Improve cash flow transparency with a centralized view of your company’s global cash balances and all subsidiaries’ payment transactions ­ • Centralized in-house bank – Concentrate all cash accounts within a single in-house bank and centrally manage the processing of all payment transactions. xApps. Crystal Decisions. PartnerEdge. The only warranties for SAP Group products ­ and services are those that are set forth in the express warranty statements accompanying such products and services. BusinessObjects. if any. Business Objects and the Business Objects logo. Business Challenges • Ensure adequate cash availability to finance critical business operations • Manage global liquidity and payment transactions • Gain control of fragmented cash balances and payment processes associated with global subsidiaries Supported Business Processes and Software Functions • Liquidity management – Maximize global liquidity. ByDesign. These materials are subject to change without notice.sap. Duet. . All rights reserved. Data contained in this document serves informational purposes only. Xcelsius. payments to vendors. All other product and service names mentioned are the trademarks of their respective companies. centralize fragmented cash positions. maximize returns on cash. call your SAP representative or visit our Web site at ­ www. in the United States and in several other countries all over the world. interest rate. SAP. and achieve greater operating efficiency. all global enterprises – regardless of their organizational structure or number of subsidiaries – can gain the flexibility to centralize fragmented cash management and payment processes. and incoming payments from customers Business Benefits • Improve operational efficiency by streamlining internal and external payment transactions • Optimize liquidity and cash availability where and when they are needed by managing all accounts in a centralized in-house bank • Decrease costs by reducing currency exchange. and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S. National product specifications may vary. 50 092 375 (08/10) ©2008 by SAP AG. Nothing ­ herein should be construed as constituting an additional warranty. Crystal Reports. and value date losses • Maximize investment returns by leveraging the expertise of your central treasury in investing cash and implementing strategies that minimize the risks of foreign exchange ­ and interest rate fluctuations For More Information To learn more about how SAP In-House Cash can streamline payment processing and global liquidity management. xApp. R/3. Web Intelligence. SAP NetWeaver. By providing robust functionality to manage global liquidity. SAP In-House Cash enables companies to lower costs.com /contactsap Summary With the SAP® In-House Cash application.A. SAP Business ByDesign. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only. including intercompany transfers.Quick facts www. Business Objects is an SAP company.