FS241 - Instructor Guide - FT - FIN

banking
services from
SAP
Release 7.0
FS241 Banking services from SAP – SAP

Loans Management for Banking
Instructor Guide
January 2010
Level 3
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Internal Note
SAP AG FS241 – SAP Loans Management for Banking
Training System
SAP Contacts..............................................................................................................3
Walldorf.............................................................................................................................................. 3
Subsidiaries....................................................................................................................................... 3
Revisions to Previous Instructor Guide...................................................................3

Course Details.............................................................................................................3
Duration............................................................................................................................................. 3
Course Materials and other Materials................................................................................................ 3
Country-Specific Units........................................................................................................................ 3
Course Instructor Profiles.........................................................................................4

Level of Knowledge Required............................................................................................................ 4
Courses Recommended as Preparation............................................................................................ 4
Online Help Recommended as Preparation.......................................................................................4
Hints on Preparing This Course......................................................................................................... 4
Training System..........................................................................................................5
Data Required....................................................................................Error! Bookmark not defined.
User ID and Passwords for Course Participants................................Error! Bookmark not defined.
Preparation in the System.................................................................................................................. 7
Example ABAPs................................................................................................................................. 8
CATTs................................................................................................................................................ 8
Technical Hints.................................................................................................................................. 8
Goals and Objectives.................................................................................................9

Course Structure and Flow........................................................................................9
Course Schedule.......................................................................................................10
Course Schedule:............................................................................................................................ 10
Day One........................................................................................................................................... 10
Unit: <Name>.............................................................................................................12
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Training System
SAP Contacts
Walldorf
Subsidiaries
Revisions to Previous Instructor Guide

No previous instructor guide is available.
Course Details
Duration
3 days
Course Materials and Other Materials

 Course material for FS241 Banking services from SAP – SAP Loans Management for
Banking
 Instructor guide for FS241 Banking services from SAP – SAP Loans Management for
Banking
 Exercises and solutions for FS241 Banking services from SAP – SAP Loans Management for
Banking
 SAP online help
We recommend that you use Knowledge Warehouse to deliver the course. You can use flip charts and
overhead projectors to explain any difficult topics to the participants. Before you start the course,
make sure that you have the required materials (flip chart, overhead projector, and so on).
Country-Specific Units
No country specific units are available.
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Training System
Course Instructor Profiles

 The instructor requires specialist knowledge of the Banking area as well as sound knowledge
of the following components and solutions of banking services from SAP 7.0:
o Account Management (FS-AM)
o SAP Loans Management for Banking
o SAP Business Partner for Financial Services (FS-BP)
o SAP FI-CA (Financial Accounting – Contract Accounts Receivable and Payable) (FI-
CAX)
 The instructor must be able to explain the underlying Customizing relationships to the
participants.
 It is useful if the instructor can make basic Customizing settings.
 It is useful if the instructor has attended the course given by an experienced instructor at least
once and is aware of the most important contents and aspects of the course.
Level of Knowledge Required

 Basic banking knowledge
 SAP01 SAP Overview
 SAP125 SAP Navigation 2005
 FS240 Banking services from SAP – Basics and Generics in Transaction Banking
Courses Recommended as Preparation

 FS240 Banking services from SAP – Basics and Generics in Transaction Banking
Online Help Recommended as Preparation

Go to help.sap.com to access the general SAP documentation. The documentation for banking
services from SAP is available under SAP for Industries → SAP for Banking →Banking
services from SAP 7.0
Hints on Preparing This Course

This course has been tested and proven to run successfully on the latest software/system release. New
release functions may or may not have been added to the content of the course. As the instructor you
are responsible for ramping up the latest features and functions.
 Read the instructor and participant guides.
 Review the online knowledge products (OKPs) and other ramp-up material at
www.service.sap.com/rkt (SAP for Banking →Banking Services from SAP).
 Practice all the participant exercises, participant solutions and instructor demonstrations prior
to holding the course.
 Become familiar with the details of the new features and functions listed below at
http://help.sap.com (SAP for Industries → SAP for Banking → Banking services from SAP
7.0) so you can answer questions as they arise.
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Support
Open a CSN IT Support ticket in the TRAI component or call the Hotline +49 6227 7 40030 for a
worldwide 24*7 support.
Hints on Preparing this Course

Remember to check for additional information which was published after the course material was
finally released. For latest information or course updates see additional instructor guide/system setup
guide or trouble shooting guide on SAP Service Marketplace. Most of them you will find under the
alias /curr-info: http://service.sap.com/curr-info.
Also other aliases are possible (e.g. /curr-adm; /curr-ep).
Training system availability

Your training system will be available and accessible on Sunday evening (CET time zone) of the
week the training takes place. Do not use the system or prepare your course before that time. The
system can still be in use by another course or in the refresh procedures of the IT preparation for your
course! If you need a test/prep. system before your course takes place, see details under paragraph
‘test-/prep. system’.
Test- /prep. system

There are test/prep. systems for most of the SAP courses available. You will find the necessary
information on:.
http://service.sap.com/curr-info
In case you cannot access this site please ask the responsible education coordinator (the one who send
you this guide) to make the relevant information available to you. If no test-/prep. system exists for
the course, but testing or preparation is essential, the responsible education department can order such
a system – this should be done ideally at least one week before the training.
Please note that test-/prep. systems must not be used for training without the permission of KPS. An
access violation fee will be charged in this case.
Using training WTS farm

Nearly all SAP courses are designed to be taught via SAP Training Window Terminal Service server
farms (= WTS-farms) to enable also trainings on customer site (so called Onsite-Training). If
restrictions of the course don’t mention another WTS-farm or the usage of the local PC front end,
always use the ‘Common Training’ WTS farm for your training. Use SAP software on local PC front
end only in SAP owned training centres with good network bandwidth connections. The usage of SAP
software on local PC front end restricts the training support to the local IT support. The global
training support can only support trainings via Training WTS-farms.
Training at SAP Training Centers/Internal SAP Training
The internal connectivity to the training WTS-farms can only be used inside of SAP network
infrastructure.
To connect to the training WTS-farm use http://wts.wdf.sap.corp:1080. Choose a region
(AMERICAS, EMEA or APJ). Select the ‘Training-Zone’ menu. Connect to ‘Common Training’, if
no other WTS-farm is named for the training.
Customer Onsite Training / Third Party Training Center
Customer Onsite training can only connect to SAP training WTS farm via the SAP Citrix Secure
Gateway (SAP CSG). Therefore you need a CSG-User ID. The User ID has to be already created by
the education department for the time of the training. The data (user ID and password) are delivered
to you by the education department. Trainer and participants use the same dedicated CSG-user-ID
and password for the training.
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Training System
To connect to the training WTS-farm use http://mywts.sap.com . Choose a region (AMERICAS,
EMEA or APJ).
Enter the CSG-User ID and password and log on. Select the ‘Training’ icon. Connect to ‘Common
Training’, if no other WTS-farm is named for the training.
January 2010 Page 6

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Training System
System Landscape
 The following systems are required:
 banking services from SAP system, release 7.0.
 SAP FI-CA: Financial Accounting – Contract Accounts Receivable and Payable (SAP ERP
release 6.0)
Please make sure to test demos, exercises and solutions in advance in the test system and/or in
the training system.
Only use the training system in the week when your course is scheduled. In other weeks
the system is used by other courses and interference might lead to severe problems in
those classes. Unauthorized usage of a training system may result in a fee!
User ID and Passwords for Trainer

 You need to follow the procedure below for both systems: banking services from SAP and SAP
FI-CA.
 System: You will receive the system ID before the course
User: TRAINING
Password: You will receive the password before the course
 Create your own user FS241-00 with transaction SU01 by copying the template user for training
FS241-99.
 The profile of user TRAINING is limited to the transactions SU01 and ZUSR.
User ID and Passwords for Course Participants

The standard format for user IDs is the course ID followed by the group number. The initial password
is INIT. Use transaction ZUSR to copy these user IDs from the reference user ID. You need to follow
the procedure below for both systems • banking services from SAP and SAP FI-CA.
 Copy from: FS241-99
Name of course: FS241
No. of exercise groups: Enter the number of participants, for example 20
Initial password: Enter your initial password, for example welcome
EXECUTE
The users FS241-01 to FS241-20 are created with the initial password “welcome”.
Preparation in the System

 Before you hold the course, we recommend that you run through all the processes and
exercises in the relevant training system for the instructor’s bank posting area (RT00).
 Each participant has their own bank posting area (BPA) depending on the group number:
RT##. Forty BPAs are available for the course, from RT01 to RT40.
 The current posting date set for all BPAs is 03.01.2000.
 You and each participant can use their own business partner: according to the bank posting
area and group number, business partners with the IDs CUST_00 to CUST_40 are available.
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Training System
If you prefer to create your own business partner, these should have the correct roles and
should be valid from 2000-01-03 onwards.
 Note that some units may require some preparation in advance. If so, you are provided with
the information about the necessary steps at the beginning of each unit.
Example ABAPs
None
CATTs
None
Technical Hints
 You need to enable the maintenance of Customizing tables for several users simultaneously.
You need to deactivate the table lock in SAP systems: transaction SE38 and the report
ZSENQON. You can deactivate this function by executing the report ZSENQOFF.
January 2010 Page 8

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Goals and Objectives
After completing this course, you will be able to:

 Understand which accounts are necessary to manage a loan and which systems are involved in
processing a loan account
 Explain the loan-specific conditions and how they affect the cash flow
 Describe the two payment principles and their influence on the configuration of a loans product
 Process a loan account during its life cycle:
 Create a loan
 Handle different types of disbursement orders
 Generate open items
 Distribute incoming payments
 Execute different types of business operations
 Explain the options of the integration of Collateral Management and the handling of insurance
policies.
Course Structure and Flow

The course consists of one module:
 Loans Management
If required, you can also include the additional unit Integration of Deposit Management and Loans
Management in banking services to Other Components at the beginning of this course. This is a
generic unit that shows the different integration aspects of implementing banking services from SAP.
Normally, this unit is a part of the prerequisite course FS240 Banking services from SAP – Basics and
Generics in Transaction Banking.
Before starting with the training, the instructor is asked to repeat what is stated in the course
description and at registration concerning the availability of banking services from SAP, release 7.0:
Before you register for this course, we ask you to acknowledge your understanding that this
training is based on release 7.0 of banking services from SAP. This version is not yet in
unrestricted shipment. The software is still in the SAP Ramp-Up phase, and your company must be
nominated as an official SAP Ramp-Up customer according to the applicable processes prior to
getting access to this particular software version. For more information about the ramp-up process
and conditions for participation, see SAP Service Marketplace:
https://websmp102.sap-ag.de/rampup as well as specific information under Banking Services from
SAP 7.0.
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Course Schedule
Course Schedule:
Day One
Approximate Content: Units and Topics Activities: Instructor
Duration and Participant
30 min Introduction Instructor
0 – Integration of Deposit Management and Loans
Management on banking services to other components
Module: Loans Management
2 hours 1 – Account Model Instructor
1 hour 1 – Account Model Exercise Participants
1 hour 2 – Cash Flow Instructor
30 min 2 – Cash Flow Exercise Participants
45 min 3 – Scenario Specific Conditions Instructor
Day Two
30 min 3 – Scenario Specific Conditions Exercise Participants
45 min 4 – Payment Principles Participants
45 min 5 – Disbursement Instructor
45 min 5 – Disbursement Exercise Participants
1,5 hour 6 – Billing & Invoicing Instructor
1 hour 6 – Billing & Invoicing Exercise Participants
30 min 7 – Payment Distribution Instructor
Day Three
1 hour 7 – Payment Distribution continued Instructor
30 min 7 – Payment Distribution Exercise Participants
2 hours 8 – Business Operations Instructor
1 hour 8 – Business Operations Exercise Participants
15 min 9 – Insurance Management Instructor
15 min 10 – Integration with CMS Instructor
January 2010 Page 10

Training System
Unit: Integration of Deposit Management and Loans Management on banking services

to other components (optional)
30 minutes presentation
Contents of Unit
- Introduction
- Sample Integration
Putting the Unit in Context
This chapter can be used as an introduction for the following training courses:
- FS240 Banking services from SAP – Basics and Generics in Transaction Banking.
- FS241 Banking services from SAP – SAP Loans Management for Banking
- FS242 Banking services from SAP – SAP Deposits Management for Banking
Many processes for Loan Accounts and Deposit Accounts do not run only end-to-
end in Account Management (Deposits Management + Loans Management), they
also require the integration of additional components. These components are
introduced here. The unit can also be used as a point of reference for questions that
may come up in one of the training courses mentioned above.
All processes shown here are explained in more detail in one of the above mentioned
training courses.
Slide 4/5: Introduction
SAP Business Maps for Banking, which are available on sap.com, are used as a
point of reference for the business processes that are included in this presentation.
For a detailed process description, go to
http://www.sap.com/industries/banking/index.epx
and click on SAP Business Maps for banking.
Slide 6: Overview integration map for Account Management
The slide contains Account Management and 9 further components.

Every component is explained in more detail on the following slides. The integration
of the components to Account Management is shown as well as the relevant high
level process. The relevant process in highlighted in orange.

Training System
Unit: Account Model
120 minutes presentation and system demo

60 minutes exercise
Contents of Unit
- Account Structure concept
- Loan-specific Contract Elements and Attributes
- Create Change Loan Account
- Due date processing
Account Structure concept:

 Introduction to Loan/Clearing on banking services from SAP
 Introduction to Contract account on FI-CAX
 Interaction between Loan/Clearing/Contract Account
Loan-specific Contract Elements and Attributes
 Assumption: The generic concepts (contract elements/specialization, time
dependency and so on) have been explained in "Generic Features &
Functions). Only loan-specific information is shown here.
Create Change Loan Account
 The "Create Loan Account" process focuses on the need to replicate the loan
to the contract account.
 "Change Loan Account" points out that there are two options for
maintaining the account data: directly and with an order (Business
Operation)
Due date processing
 Due date processing focuses on the interaction between
Loan/Clearing/Contract Accounts
Slide 11: Assignment options for clearing accounts
Postings are kept logically separate: The payment distribution process (post
incoming payment to Clearing Account – distribute the incoming payment from the
Clearing Account to the Loan Account) is the same whether the Clearing Account is
separate from or the same as the Loan Account.
Slide 18: Condition Fixing Agreement
A condition fixing agreement should not be confused with a fixed interest rate. The
condition fixing agreement determines conditions for a term. This can be – among
Training System
other condition types - a fixed or a variable interest rate. Example: A variable
interest of a certain reference interest rate + 1 % is fixed for 2 years. Depending on
the interest adjustment agreement, the interest to be paid floats based on changes to
the reference interest rate.
Slide 18/20: Condition Fixing Agreement/Inpayment Agreement
These slides show the creation of the initial agreements. To create additional
condition fixing and/or inpayment agreements, you can use "Manual Renewal"
business operation. Agreements may not overlap. However, you can create a new
CFA/IPA by changing the account master data manually as well instead of using the
order "Manual Renewal". However, in the context of a renewal process we
recommend using the Business Operation that provides more options, for example,
calculating the new commitment capital.
Slide 25: Loan specific contract elements: Posting Data
Definition of available amount for a loan account:
+ Contract capital
+/- Capital increase/reductions
= Disbursement obligation
- Planned/scheduled disbursements to customer
= Extended disbursement obligation (available amount)
The "Relevant for Billing" attribute is not shown on this page because it has been
replaced by the Billing feature. However, if the feature Billing is used, this attribute
has to be activated.
Slide 31: Account Changes – Examples
When executing the Payment Plan Change Order (PPC), the payment conditions are
changed. You can also do this manually with a direct change to the condition
(Transaction "Change account"). However, it is easier to use the order.
- Less data to capture
- Fail-safe (a manual condition change is more likely to cause an error due to the
complexity of conditions)
- Control of authorization
- Reason codes
- Reversal option
System demo at the end of Lesson 3 (Create and Change Loan Account)
Note that the contract created in this demo will be used for demos in subsequent
lessons/units.
Content:
1. Loan Creation
2. Loan specific attributes
3. Clearing Account replication to FI-CAX
Demonstrate:
1) Check of Business Partner on banking services and FI-CAX
- Same BP-ID on both systems (use JIM TRAINING_00 with BP_ID:
Training System
CUST_00)
- banking services: "account holder" role and "correspondence recipient"
role
- FI-CAX: "Contract Partner" role
- validity of roles and correspondence address must match with bank posting
area's posting date
2) Create Loan Account:
Menu: Financial Services – Account Management – Account – Account
Master Data – Create Account
 Set Contract Start Date = Posting Date for Payment Transactions
 Contract Manager: RT00 (00_Dublin)
 Product: LO_FRIL_TR
 Account Holder ID: CUST_00
3) Replicate Clearing Account to FI-CAX
Menu: Financial Services – Account Management – Periodic Tasks –
Communication with External Systems – Distribute Account Master Data
4) Show Contract Account on FI-CAX
Menu: Accounting – Financial Accounting – Contract Accounts Receivable
and Payable – Master Data – Contract Account – Display
The contract account number can be found by using F4:
- Contract acct name = "*[Loan Account Number]"
5) Execute Initial Billing
Menu: Financial Services – Account Management – Periodic Tasks –
Account Billing – Execute Account Billing

Training System
Unit: Cash Flow

30 minutes exercise
Contents of Unit
- Overview
- Input Data
- Display
- Calculation
- Key Figures
Cash Flow
 The Cash Flow is one of the basic elements of a loan account and is used by
many functions. Understanding the Cash Flow helps to understand many
subsequent units/lessons because the impact of various functions on the
Cash Flow can be explained by showing the change in the Cash Flow.
 Examples:
o Business Operations such as Payment Plan Changes, Extensions,
and so on
o Billing
o Payment Distribution
o Settlement
Slide 7: Cash Flow Overview

Note that the Cash Flow Calculator as part of the technical foundation calculates the
cash flow but that it does not provide the history data. This is done by functions of
the banking services application.
Business Context
Explain the terms payment conditions and price conditions:
 Payment conditions refer to all conditions of the inpayment agreement.
 Price conditions refer to all Financial Conditions that form the price of a loan
such as interest, regular or event-based charges, and insurance premiums. There
are Financial Conditions that do not form a price such as "Expiration date of
prenote", "Subject to final payment".

Training System
Slide 8: Usage of the Cash Flow Calculator
This slide is to point out the importance and multiple integration of the CF
calculator. These functions always calculate the Cash Flow during run-time. There is
no persistent CF stored in the database.
Slide 9: Cash Flow Items
Consider that a repayment for a loan with Planned Payment Principle results in 4
cash flow items (after the payment has been made and settlement has been executed)
1. Requested Repayment
2. Incoming Payment (reduces the effective capital)
3. Repayment Settlement (reduces the interest calculation capital)
4. Repayment by Maturity Date (reduces the planned capital)
Slide 10: Item status
Distinguish between
 CF items that are projected: the status is transferred from simulated to
requested/posted (Billing, Settlement)
 CF items that are not projected and only shown as a result of a completed
process (incoming payment distribution, particular events)
Slide 14: Input Data – Balance Lists
Consider that balance lists and not single turnovers are taken into account for the
cash flow display. There is no one–to-one relationship of cash flow items and posted
items. Example: Two disbursements on the same day are displayed as one cash flow
item.
The starting point of the cash flow projection made by the cash flow calculator is
balance lists. The balance lists provide data, such as disbursed capital and
repayments.
System demonstration of a sample Cash Flow
SAP Menu: Financial Services -> Account Management -> Account -> Account
Master Data -> Change Account
 Show Inpayment Agreement/Condition Fixing Agreement first to identify
the cash flow calculation period
 Show relevant payment and financial conditions
 Go to the Cash Flow tab page and display the Cash Flow
 Explain the cash flow elements, such as prices and payment (as explained in
the slides)
 Demonstrate an example of SAP List viewer features, such as filter and
change layout
 Show item details (highlight item and click on the magnifier button)
 Show calculation details – double-click on interest item (dialog box
appears), highlight the item for the interest and click on the magnifier
button. Show the fields needed to calculate the interest, such as
o Calculation basis amount
o Percentage rate

Training System
o Start date, end date, number of days
o Amount
 Close the 2 dialog boxes to return to the cash flow list and click on the
"Detailed List" button to show all calculation details. This list is used to
have a non-aggregated view of the calculation. Example: The interest
calculation basis changes within the interest calculation period.
Result:
o The Cash flow shows one item belonging to the calculated result
o The detailed list shows two items, one for each interest calculation
basis
You can show this example with a variable interest in the next unit
‘Scenario Specific Conditions’.

Training System
Unit: Scenario Specific Conditions

30 minutes exercise
Contents of Unit
- Overview
- Interest Conditions
- Charge Conditions
- Other Conditions
Conditions
 The general concept of conditions for banking services is explained in the
training for generic features and functions. Some loan-specific conditions
such as manual waiver and payment condition are handled there, too.
 You use this unit to demonstrate the implementation of conditions for loan
products.
Slide 8: Overview
This figure shows which conditions could be relevant for a loan account on the basis
of the business process – irrespective of the product and banking services from SAP:
 Light blue labels designate the interest conditions.
 Dark blue labels designate the charge conditions
 Waiver condition can be set up in connection with every other condition.
Therefore, waivers have a special position within the condition system.
 Insurance premiums can be calculated like a charge or an interest condition.
Slide 11: Interest Conditions – Variable Nominal Interest
The figure shows that EURIBOR changes do not have an immediate effect on the
customer’s interest rate. The 2-point mark-up is only adjusted on the defined dates.
This means the bank’s margin can increase or decrease between the adjustment
dates.
The figure shows an extreme example to clarify the effect. The EURIBOR changes
daily in small increments.
Note that the dates for the first fixing and adjustment are necessary for interest
calculation. This means the first adjustment has to include the start date of interest
calculation.

Training System
The example shows that the change to EURIBOR on April 15th is not included in
interest calculation. The next fixing date for the account is on June 1 st – after the
second EURIBOR increase on May20th.
System demonstration of Variable nominal interest
SAP Menu: Financial Services -> Account Management -> Current Settings ->
Reference Interest Rates -> Edit Reference Interest Rates
 Show the reference interest rate that should be used for the new account:
Market Data Area: 0001
Reference Interest Rate: TR_LOAN_00
 Add new data for following months – appropriate to your actual posting date
Master Data -> Create Account
 Open account (product LO_MORG_TR) with essential data.
o Copy the standard condition for nominal interest and modify it with
reference rate and markup. Use extreme data to show the variation
clearly.
o Add the dates for adjustment and fixing on the Adjustment tab page.
 Show the cash flow and the variation of interest amounts following the
changes of the reference rate and the adjustment dates.
 Double-click on the interest amount to show the details of the item, such as
the percentage rate, calculation basis amount, and number of calculated days
o
Slide 18: Interest Conditions – Interest on Arrears
The figure shows that the first installment was not paid on schedule. Interest on
arrears is calculated on the open amount from t1 to t2 and charged with the next
installment. No payment was made on due date.
In the second period interest on arrears is calculated on the amount of two
installments and the open item for interest on arrears. The actual payment is cleared
due to the payment distribution rules and closes a part of the open items. It reduces
the basis for calculation of interest on arrears from the payment date onwards.
Slide 27: Charge Conditions – Types of Charges
The disbursement charge is an event condition from the business view. Due to
technical processing it is applied as a settlement condition. For disbursement orders
with a payment date in the future, the disbursement charge should be charged in
conjunction with the payment and not with the order activation.
Slide 32: Charge Conditions – Event Condition
The direct charges for business operations are the most important event conditions
for loan accounts. Other event conditions could be defined in the configuration but
this is very complex and will not be explained here.
Slide 35: Charge Conditions – Shared Disbursement Charge
The configuration of the condition types for disbursement charges is similar to the
discount condition. The main difference in the settings is the Charge Event Category.

Training System
System demonstration of event condition
 Open account (product LO_MORG_TR) with essential data. For event
conditions delete the condition group and create a new individual condition:
o Use the condition type ‘Direct Charges Loans’.
o Select ‘Deferral’ as the feature and ‘Create or Generate’ as the
activity.
o Enter the contract creation date as Valid From
o Enter the amount for the condition.
 Show the cash flow. There is no entry for the event condition because the
event has not occurred yet.


Training System
Unit: Payment Principles
45 minute presentation
Contents of Unit
- Introduction and Overview
o Definition and Classification
o Definition of Terms
- Comparison of Principles
o Exact Payment
o Late Payment
o Underpayment
- Configuration
o Settings for Payment Principles
o Payment Principles in Application
o Associated Settings
- Appendix
o Early Payment
o Overpayment
Payment Principles do not appear in special functions but take effect indirectly in other functions.
 Introduction and Overview

This lesson describes the general principles and compares the payment plan
principle and the incoming payment principle.
 Comparison of Principles
In the second lesson, the different effects of the principles are shown in
examples for late payment and underpayment. For other examples of early
payment and overpayment, see the Appendix.
 Configuration
This lesson provides information about implementation, for example, about the
required settings and the differences in calculation and clearing of several items.

Training System
Slide 9: Introduction and Overview: Definition and Classification
You are already familiar with this figure from the ’Cash Flow‘ unit. It has now been
slightly enhanced. It should give you an idea of the dependencies with other
functions and parameters. Do not explain these dependencies in detail here.
.
Slide 10/12/13 introduction and Overview: Definition and Classification PPP
and IPP
Do not explain the figures on these slides in detail. In this introduction they should
only give a picture of the relevant items and the effect of differing actual payments.
On slide 8, a payment plan with planned annuity payments and their portions of
interest and repayment are displayed.
In addition, the figures on slides 10 and 11 show example actual payments: Two
exact payments, an early payment, an underpayment, and a late payment.
Slide 10: With PPP the amounts of the interest share and the repayment share do not
change.
Slide 11: With IPP the amounts of the interest share and the repayment share change
depending on the actual payment.
Note: Some terms can have varying intent or emphasis in different countries. For
example: the term ‘annuity’ is closely connected with mortgage loans and the
payment plan principle in Germany. In North America the constant installment with
changing shares of interest and repayment is also very common, but not called
‘annuity’.
Slide 23: Comparison of Principles: Underpayment

If the payment cannot clear the open item for interest (or part of it), the remaining
open item for interest will be cleared with the next payment. In an extreme example
the next payment is used in its entirety to clear open items for interest and cannot
reduce the interest capital.
Slide 27/28: Configuration – Settings for Payment Principles
There are only two settings that influence the payment principles directly:
 The work rule for general settlement in the product configuration.
Depending on the work rule, different turnover classes are considered and
therefore settlement is influenced. Furthermore, the formation of billing items is
affected (separate items for repayment and interest with PPP, one item for
installment with IPP).
 The calculation base in the condition type for nominal interest (price condition).
Slide 29/30: Configuration – Payment Principles in Application (PPP)
Due to the PPP, the amount of the payment item of the credited payment on loan
account does not match with the update of the turnover class L022 (Repayment
Settlement)!

Training System
Slide 33: Configuration – Associated Settings
In addition to the main settings for payment principles, further settings for related
functions have to be adjusted and harmonized.
If you have to implement a new product, all these settings have to be considered in
conjunction with one another.

Training System
Unit: Disbursement

45 minutes exercise
Contents of Unit
- Overview
- Disbursement Order
- Disbursement Process
Disbursement
 The disbursement order is the first business operation introduced in Loans
Management. The general concept of business operations is part of "Generic
Features and Functions", in the "Order Management" unit.
 The release process is available to all business operations. Since the most
relevant business operation for reversal is the disbursement, it is part of this
unit.
Slide 10: Structure of the disbursement order

“Administration” and “Technical Details” are not disbursement-specific and are
therefore not explained in detail.
Slide 20: Disbursement Process: Withholdings

 Withholds are processed in the same way as "common" incoming payments:
A credit item on the clearing account is distributed to the loan account by the
incoming payment distribution run. A payment directive overrules the
payment distribution rule-set in order to apply the incoming payment as a
prepayment of the withheld items.
 If the customer’s current account is not managed on the same system as the
loan account, a Payment Transaction System makes the transfer . The
integration of a payment system has been left out in this picture.
Slide 25: Disbursement Reversal – Business Context:

3 sample scenarios are depicted on the following slides. This is not a complete list of
possible scenarios. As indicated by the cloud figure, there may be many.
More business context background:
1. Interest implication: If the customer has provided incorrect account details
for the disbursement, the customer might be charged with the interest for the
time period until the funds have been returned.

Training System
System demonstration of Disbursement
SAP Menu: Financial Services -> Account Management -> Account -> Loans
(Special Functions) -> Disburse Loan
o Create a disbursement order
o Maintain payment advice data (use Domestic Transfer as Payment
Advice Type)
o Show defaulted withholding items (We recommend not withholding
items since the process becomes too complex)
o Save disbursement order
o Activate disbursement order
o Display the automatically created payment order
o Display the Cash Flow (the status of the disbursement item has
changed to "posted".
o Display the posting on the loan account.
o Execute settlement run if it is necessary.

Training System
Unit: Billing & Invoicing

60 minutes exercise
Contents of Unit
- Creating Open Items
o Classification
o Billing & Invoicing Process
- Billing Characteristics
- Billing Correction
o Reversal
o Automatic Correction
- Direct Debit Process
Billing & Invoicing are the core elements of due date processing with the objective of creating Open
Items for expected payments.
 Generate open items based on Cash Flow projection

 Determine which billing parameters to use for various business needs
 Understand the integration of banking services and an Open Item Management
system
Slide 1: Functional Blocks

Functional blocks in focus: Billing & Invoicing
Functional blocks which are also touched upon in this Unit
1. Cash Flow
2. Periodic Processing (Billing, Invoicing, Payment run)
3. Open Item Management
Any open item management can be integrated to banking services from SAP. The
idea is that the customers’ (banks) system landscape may contain different product
systems (meaning systems managing financial transactions such as banking services)
which require a single Open Item Management system. Therefore, the Open Item
Management system is linked to various Product Systems of which Banking services
is only one of these. The training material shows SAP FI-CAX as the Due Item
Management System.

Training System
Slide 5: Billing & Invoicing: Table of Contents
Note that Lesson 4 Direct Debit Process is
- Not strictly a Billing & Invoicing topic but a follow up process after creating
open items
- Does not describes banking services from SAP but rather FI-CAX
functionality
It is part of this unit though to give the students the full picture of processing
receivables.
Slide 7: Creating open items: Classification – Purpose of Billing & Invoicing
The different objectives of banking services and the open item management system
should have been explained in the Unit “Account structure”. Have the following
information ready in case questions come up:
The scope of banking services from SAP in the context of Billing is to provide data
to create Open Items for expected incoming payments. The actual Open Items are
managed in the Open Item Management System (OIM) where the following
functionalities are provided:
1) Creating Payment Media such as direct debit files
2) Creating Invoices for the customer
3) Clearing open items with incoming payments (see chapter Payment
Distribution)
This means that these processes are NOT in the scope of banking services from SAP.
However, it has to be mentioned that a tight alignment and integration between
banking services and OIM is required.
Creating the invoices on the OIM provides the flexibility to create one single invoice
for several contract accounts of one customer (if required).
Slide 8: Creating open items: Classification – Dependencies of Billing and
Invoicing
The Cash Flow is not stored persistently but always calculated during the billing run.
Apart from conditions, the Cash Flow considers other elements such as the contract
capital, settled periods, and so on. For details, see to the unit about “Cash Flow”
Billing and Invoicing are programs that are usually scheduled in periodic processing.
Slide 9: Creating open items: Process
The slide shows 5 process steps. Of these 5 steps
 Two of these steps are usually part of periodic processing (usually End-of-
Day processing). Depending on the customer requirements any periodic
processing (for example: intraday may apply for invoicing if loan accounts
are created and disbursed during the day and billing items are created on that
day)
 Three of these are manual transactions that are useful for testing purposes. In
other words: none of these steps would be executed by the end user in a
productive environment. These steps are mentioned to explain how the user
can check the billing process when conducting a test or working on the
exercise. The participants should use these transactions when working on
the exercise.

Training System
Demonstrate Billing Process online after showing slide 10 (Creating open items:
Process)
Use the account you created in the first unit.
On Banking services
6) Display Cash flow: Look for the next scheduled expected payments
Menu: Financial Services – Account Management – Account – Turnover,
Balances and Key Figures – Click on Button “Cash Flow”
7) Display next billing date
Billing – Display Billing dates
Note the date of the “Current billing run”
The calculation of this date will be shown in a subsequent system
demonstration.
8) Update Posting date payment transaction (= date current billing run)
Menu: Financial Services – Account Management – Periodic tasks – Posting
date – Set Posting date for Payment Transactions: New posting date =
Current billing run date.
9) Execute Billing
Menu: Financial Services – Account Management – Periodic tasks –
Account Billing – Execute Account Billing
Execution date = Current billing run date
Show billing results :
Created billing items
Billing – Display Billing items
Changed status of receivables in Cash flow

On FI-CAX
10) Run Invoicing
and Payable – Invoicing – Online Processing – Create Invoicing Document
11) Show Open Items on Contract Account
and Payable – Account – Account Balance
Slide 11: Characteristics of Billing – Billing Parameters
The billing parameters control when expected payments are going to be billed. These
parameters have to be defined when creating a product and an account.
Typically they are defined on product level but can be changed on account level (if
required).
Each parameter is explained in detail on the following slides.
Slide 12: Characteristics of Billing – Billing category
Background information about coupon books – mention this only if questions come

Training System
up:
Coupon Books are used as a payment method for loan accounts in the US. A booklet
is given by a mortgage lender to a borrower. The booklet contains a set of pre-
printed tickets (coupons) showing the account number, required payment amount,
and payment due date. Each month a coupon is to be detached and sent in with a
check for the mortgage payment.
Under normal conditions, , no further regular or unscheduled statements are sent out
to the borrower other than the coupon book. . However, the customer, may request
that paper statements be sent in addition to the yearly coupons.
The time period, for which a coupon book is sent out to the customer, is set up in the
following way:
- Either the time period is defined (usually 12 months) (“periodic coupon
book”)
- Or it is defined that a coupon book is provided for the entire term of a loan
account
Slide 14: Billing Period: Example 1 – Periodic Billing with Lead Days
Explain/repeat the following terms based on the graphic. Note the sequence:
1. Billing period: May 2008
2. Due date of the expected payment: May 31st, 2008
3. The billing execution dates is the due date minus 12 lead days
Demonstrate the calculation of the billing execution date

Use the previous loan account. Explain the difference between the due date and the
billing execution date by
1. Showing the next due (simulated) installment in the cash flow
2. Showing the attributes of the contract element billing for that loan account
Master Data – Display account
3. Showing the next billing execution date (calculated as due date minus lead
days – take into account a possible working day shift)
Billing – Display Billing dates
Slide 20: Billing Correction – How is the correction made?
Some more details to explain:
1) There is only one corresponding open item in FI-CAX for billing items with status
01.
2) Explain that only newly created items are replicated to FI-CAX.
3) Example for understanding the logic of 1+2: A billing item is created. Invoicing
posts the corresponding open item to the contract account. If the billing run is
reversed, the billing item changes the status from 01 to 04 (no impact on FI-CAX)
and a new billing item with the status 85 is created. This triggers the reversal of the
open item in FI-CAX.

Training System
At the end of lesson 3. Billing - Correction: Demonstrate billing correction
Use the previous loan account.
1. Change payment condition: set up an individual payment condition for the
repayment and increase the repayment amount
Master Data – Change account
Remark: In general, you use a Payment Plan Change Order to change the
installment amount. However, since the PPC is explained only in one of the
next units, this option for changing installment should be used.
2. Go to the “Inpayment agreement” tab page, go to the detailed list of
conditions and copy the standard condition for the installment as an
individual condition. Make sure that the “valid from” date is within a billed
period. Click on Transfer.
3. Show the result in the Cash Flow – the new installment amount is supposed
to be shown as “Simulated”.
4. Save the account master data. A dialog box will appear indicating that new
billing items have been created.
5. Explain the correction by showing the billing items
Billing – Display Billing items
Slide 27: Direct Debit Process: FI-CAX provides the capability to process
payments
These slides should be used to refer to the following 6 slides.

1. The Prerequisite “Open Items created” group box is no longer explained
in detail because it refers to the billing process of the previous slides.
2. The Prerequisite “PTS is integrated” group obx is explained in detail on the
next slide.
3. Box Payment run is explained on the 5 slides thereafter.
- How to use the payment run (1 slide)
- What does the process look like? (1 slide)
- Two optional implementation scenarios (3 slides). Which scenario you use
depends on the customer or country-specific requirements.
Hint: Outgoing payments for loan accounts are typically not processed through FI-
CAX. This is part of a direct integration between banking services and a PTS
(Payment Transaction System).
Slide 28: Direct Debit Process: Prerequisite: Integration of a Payment
Transaction System
The graphic should be explained box by box, clockwise
 Start with the first two bullet points of the “banking services” group box
 Finish with the last bullet point of the “banking services” group box.
Mention that the incoming payment is posted to the CLEARING account.
Refer to payment distribution (which is a separate unit) which explains how
the incoming payment is matched to the open items.
Definition of a PTS: The Payment Transaction System is a system to manage
incoming and outgoing payments either within the bank or with any other financial

Training System
institute. In an implementation scenario Banking services from SAP has to be
integrated to a PTS.
Example for a PTS: SAP Payment Engine
Slide 29: Payment run – how to use
If further information of the setup of payment methods is required (not necessarily to
mention though) check the setup on FI-CAX:
IMG Financial Accounting (NEW) – Contract Accounts Receivable and Payable –
Business Transactions – Payments –Incoming/Outgoing Payment Creation – Define
Payment Method
Major settings are
 Which payment media format has to be created
 Which information is sent to the recipient (Note to Payee)
Which data is required on the customer master record
Slide 30: Direct Debit Process: Payment run – Process
Background information (not necessarily for presentation purposes)

These notes contain a list of objects that controls the payment run. Examples for
each objects are as follows:
 Configuration: the configuration of the payment method determines how a
payment is processed (for details check IMG: Financial Accounting (NEW)
– Contract Accounts Receivable and Payable – Business Transactions –
Payments –Incoming/Outgoing Payment Creation – Define Payment
Method)
 Run-time parameters: restrict the quantity of data to be processed, for
example, business partner, range of contract accounts, payment methods.
 Posting Documents (Open items): bank details ID, payment methods, due
dates, and so on
 Business Partner: the posting document stores only the bank details ID of the
target account for the debit memo, the BP stores the corresponding bank
details (bank country, bank key, account number)
 Contract Account: payment details valid for this contract account
Note: The payment run is designed more for non-financial institutes. For this reason
the payment run determines a house bank (account). This is the bank that provides
the banking services for this company. Banks typically do not need house bank
determination. When creating the payment media the house bank account has to be
replaced by the loan account or the corresponding clearing account number. This is
not an SAP standard but a customer-specific extension.
Slide 31: Direct Debit Process: Prerequisite: Implementation Scenarios
Payment run FI-CAX – Implementation scenarios
The payment run in FI-CAX provides two options:

a) Creating payment documents and clearing due items OR
b) Creating payment orders without clearing due items
The integration scenario between FI-CAX and banking services requires option b).

Training System
The reason being that the incoming payments are posted to the Clearing Account on
banking services and only the Payment Distribution Process will clear the due items
in FI-CAX.
Hint: You configure the creation of a payment order on the payment method level.
1. IMG: Financial Accounting (NEW) – Contract Accounts Receivable and
Payable – Business Transactions – Payments –Incoming/Outgoing Payment
Creation – Define Payment Method
2. Select a country and double-click on Payment Method in the menu
Double-click on the Payment Method in the list

Training System
Unit: Payment Distribution

30 minutes exercise
Contents of Unit
- Overview
- Concept
- Technical Objects
- Process
- Configuration
Payment distribution runs for all incoming payments.

The payment distribution covers the inbound and outbound interface to FI-CAX. FI-
CAX represent an Open Item Management system
Slide 36: PD Execution: Sequence of the payment distribution process 2/2

As on the previous page, the usage category "Payment Directive" is shown again.
These are payment directives that are linked to the payment distribution item and,
unlike the step on the previous page, where the "overrule rule set" indicator is set to
NO. These payment directives are processed because of the rule set.
Slide 36: PD Execution: Sequence of the payment distribution process 2/2
In an overpayment scenario, the payment distribution system generates prenotes in
addition to a payment order. As part of the standard delivery this is not done for
exact payments and underpayments for performance reasons (however, it can be
configured). Prenotes are created to avoid any inconsistencies caused by posting
payment orders. Payment orders are processed asynchronously (long delays are
possible).
Slide 37: Processing mode
The synchronous mode was implemented with Release 7.0
System demonstration of payment distribution:

Objective: Show complete payment distribution process for clearing open item. Use
the open item posted in the system demonstration of the Billing and Invoicing unit.
Assumption: The processing mode for PD is set to "synchronous". To change the PD
item status to done without delays, you can run FPOITR.
 Show open item on contract account
 Post incoming payment to clearing account
 Show PD item that has been created automatically

Training System
 Execute payment distribution
 Show clearing of open item on contract account
 Show result items of PD item
 Show postings on clearing account and loan account.
 Execute settlement run for the same date and – if necessary - for period end.

Training System
Unit: Business Operation

60 minutes exercises
Contents of Unit
- Skip
- Extension
- Deferral
- Capitalization
- Waiver
- Payment Plan Change
- Payoff
- Manual Renewal
- Cancellation/Rescission
- Account Closure
- Product Change
- Account Holder Change
Typically, the processing of a loan is fully automated once it has been disbursed.
However, during the loan’s life cycle events that require manual intervention
may occur. banking services from SAP provides Business Operations for these
events.
This chapter is comprised of 13 business operations. To achieve a better

understanding, you should demonstrate 2 to 3 Business Operations on the
system. Show those business operations that you know well.
Recommendation:
- Skip (simple BO to change the cash flow)
- Payoff (very common scenario for most banks)
Slide 012: Overview: Customizing / Settings
Give a brief system demo on configuration which is the same for all business
operations
1. Show how to enable/disable conditions for using by a business operation:
IMG: Financial Services -> Account Management -> Product Management -

Training System
>Financial Conditions -> Define Condition Type
Select a receivable condition type (for example, 511100 Rec.: (PP) Nom. Int.
Rate) on the middle screen and double click on the amount category in the
menu on the left. Now you can scroll through the middle screen and show
how to include/ exclude the condition type for an order by
enabling/disabling the checkbox
2. Show that the business operations have separate nodes and attributes in the
product configurator:
IMG: Financial Services -> Account Management -> Product Management

-> Product Definition –Account Products -> Display Account Products
Now, for example, select the product LO_FRIL_TR , press the Next Screen
button and show where in the tree you can find the different orders and show
(but do not explain in detail) the attributes of one order in detail.
Example: Used Attributes -> Extension -> Order Attributes
Slide 019: Process Overview (Skip)
Give a system demo of a Skip:

1. Create a loan account (use product LO_FRIL_TR) and display the Cash
Flow (focus on next due date)
2. Replicate account to FI-CAX
3. Run Initial Billing
4. Disburse account (withhold the disbursement charge)
5. Run Payment Distribution
6. Run Settlement
7. Create Skip
- Select first installment on Payments tab page
- Show option to change the payment plan
- Save Skip
8. Activate Skip Order (show status before and after activation)
9. Run Invoicing
10. Show changes in Cash Flow
11. Show account data – inpayment agreement – payment condition (there is an
individual condition created by the skip)
Exercise Deferral to be done after the system demo of the skip and presentation
of lesson on Deferral.
Slide 064: Process overview – full payoff, immediate execution

Give a system demo of a full payoff: Execute payoff only without payoff execution
charge to avoid inconsistencies. Refer to internal messages 2912385. Check required
notes and current status of training system.
1. Use the loan you used in the previous system demonstration

Training System
2. The current posting date should be after the disbursement date
3. Create payoff order:
- Explain the detailed gross payoff amount
- Select "Binding Payoff"
- Enter PAM data
4. Optional: Show how the payoff amount changes by entering different date
scenarios. Example:
- You move the payoff value date after the next planned installment. Show
how the payoff amount changes.
- Then you move the "Repayment expected by" date before/after the next
installment. Show how the payoff amount changes.
5. Save payoff order
6. Activate payoff order (show status before and after activation)
7. Run Invoicing
8. Show open items on contract account
9. Optional: Post a corresponding incoming payment and run settlement.
Exercise Payoff to be done after the presentation and system demo of lesson on
Payoff.
Slide 68 Product Change

The product change can change/affect these loan-specific attribute groups:
Give a business example for the change of a loan-specific attribute:
Example: The bank has an agreement with the customer to change from a loan
product with coupon book to one with cycle billing. The product changes results in a
change of billing category.
Slide 71 Account Holder Change: Business Context
Some background information – not necessarily to be mentioned in the training:
AHC may be required due to various business reasons, for example:
 Changing a joint loan account to an individual loan account in case of death

or divorce
 Changing an individual loan account to a joint loan account in case of
marriage
 Change of account holder from a person or persons to an organization
 Release from debt liability
 Joint debt liability
 Succession (inheritance of debt)
 Mergers
 Change of legal form
 Corrections (in case of mistakes)
The various options of how the AHC can be applied are described. However, which
option is applied in which case, depends strictly on the customer-specific

Training System
implementation of banking services, For example:

- How joint loan accounts are entered – The account holder may be either
o An organization representing the marriage, or
o One of the spouses is the main account holder while the other is
assigned in a different Business Partner role
- Whether it is compulsory for the product to have the same account holder for
the Loan Account and for the Clearing Account
- …
Slide 72 An Account Holder Change (AHC) of a Loan or Clearing Account

needs to take the model of 3 logical accounts into consideration.
Every single assignment should be mentioned and – if applicable – the business

context explained. Note that the term “finance project” is used in banking services in
the context of payment distribution. Incoming payments can be distributed on the
level of a finance project. For more details, see Unit “Payment Distribution”.
Slide 74: Scenario 2: AHC of Clearing Account OR Loan Account
The Clearing account can be any customer transaction account that serves a
customer’s other banking needs as well, or it can be created as being specifically
(and only) a Clearing Account for Loans. This is subject to a customer’s
requirements.
Slide 77: Handling of Open Items
Scenario that is not explained in the slides (due to time restrictions):
The open items are transferred to the same contract account that has a different BP.
The contract account number remains the same and has two BPs assigned to it. If
this is the case, the clearing account is assigned a new BP and the corresponding
open items are transferred to the new BP of the same contract account.
Slide 78: Handling of Business Operations in the Account Holder Change Order
Reverse/delete/deactivate business operations: A business operation can be regarded
as a change request that was negotiated individually with the old account holder,
such as a Skip of some future payments. With the execution of the AHC to the new
account holder, the following activities are executed if selected as follow-up activity
in the AHC order:
- Entered business operations are deleted
- Activated business operations are deactivated (for example, Payoff Quote)
- Executed business operations are reversed (e.g. Payment Plan Change)
if configured and selected as optional follow-up activity in the AHC order. Do not
mention more details about the status concept of loan specific business operations
here.
Slide 89 Example: Scenario (2) - Forward Renewal
Explain another scenario of a forward renewal using the graphic: Assume that the
Inpayment Agreement 1 has the same term as the Agreement. Then the manual
renewal would only add a new Condition Fixing Agreement 2 but no new Inpayment
Agreement. However, business requirements in which Inpayment Agreement and
Condition Fixing are not identical are rare.

Training System
Slide 98: Monitoring process (as long as no renewal order is created)
A notification can be sent for the end of the
- IPA and/or
- CFA and/or
- Agreement.
Typically only one notification is required (and configured) since the IPA and CFA
are often identical.

Training System
Unit: Insurance Management
Contents of Unit
- Overview
- Setup of a Loan Related Insurance Policy
- Processing of an Insurance Policy
- Ending of a Loan Related Insurance Policy
- Configuration
Preparation
Create an account to which the insurance policy is to be assigned.
Replication to FI-CA or disbursement is not necessary.
Slide 8: Overview
The listed insurance types are only common examples. Other possible insurance
types are:
 Occupational disability insurance
 Property insurance
 Pension insurance
 Natural hazard insurance
The interface for exchanging data with the insurance company is allocated to CMS.
Slide 9/10: Overview
There are two possible scenarios for processing insurance policies linked to loan
accounts:
 The customer already has an insurance contract and this should be linked to a
loan account. In this case, the insurance master data has to be delivered by the
insurance company or by the customer. The insurance company holds the
original insurance master data, the CMS stores a copy.
 Insurance is sold in the context of loan origination. The bank acts as a broker for
the insurance company. In this case, the insurance master data is created first at
the bank. But the master data has to be delivered to the insurance company who
stores it in the main insurance master data system.
If the insurance company cooperates with an insurance tracking vendor (ITV), the
ITV could substitute the insurance company as regards data exchange, premium
payment, and so on. The scope of the involvement depends on the individual service
contract.
Slide 12: Setup – Insurance Master Data
The automatic import of insurance policy master data cannot be shown here; instead

Training System
the manual collection is shown.
The transactions for creating, changing and displaying insurance policies use the
CMS system as the database but the entered master data is not available as a
collateral object there.
If an insurance policy is to be used as collateral, the object and the agreement have to
be created separately with original CMS transactions.
System Demonstration of ‘Create Insurance Policy’

SAP Menu → Financial Services → Account Management → Account → Loans
(Special Functions) → Insurance → Create Insurance Policies
 Select Life Insurance as the insurance type.
 Enter an imaginary policy number and insurance company.
 Set the insurance policy status to Active and enter the actual posting date in the
Ins. Status Date field (this is the date on which the status was changed).
 On the Validity/Coverage tab page, enter the following data:
Contract begin and contract end (dates of the original contract, note that the
Contract End Date must be after the current system date)
Conclusion on (date on which the insurance contract was concluded)
Insurance sum (total amount of the insurance contract) and currency
 On the Premium/Payment tab page, enter the following data:
Insurance premium as amount
Frequency of payment (number and entity)
Premium type (periodic)
Premium from (actual posting date for validity start date)
 Save the insurance policy.
Slide 13: Setup – Assignment to Loan

Note that the insurance policy data has to be filled in exactly the same way as the
policy master data. The correct information cannot be selected from available values.
The Manage Premiums field determines whether it is possible to automatically
create financial conditions.
The Only Valid with Account indicator determines if the insurance policy is
influenced by the termination of a loan. If the indicator is set to ‘No’, the insurance
policy stays ‘active’ even in the case of a terminated loan.
System Demonstration of ‘Assignment to Loan’
SAP Menu → Financial Services → Account Management → Account → Account
Master Data → Change Loan Account
 Use product LO_MORG_TR to open a new account, or select an existing
account to which the insurance should be linked. Note that the agreement has to

Training System
end after the actual system date.
 Go to the Insurance tab page.
 Enter the same insurance company, policy number, and start and end date as in
the policy master data.
 Select ‘Yes’ for Manage Premiums and Only Valid with Account.
 Save the loan account.
Slide 14: Setup – Condition Creation
The manual creation of financial conditions for insurance premiums is possible in
principle. But the automatic processes cannot then be used.
System Demonstration of ‘Create Financial Condition’
SAP Menu → Financial Services → Account Management → Periodic Tasks →
Insurance → Compare Payment Plans for Insurance Policies
 Confirm the proposed date (actual system date).
 Enter the account ID.
 Deselect the Simulation checkbox.
 Start the report.
SAP Menu → Financial Services → Account Management → Account → Account
Master Data → Display Loan Account
 Select the linked loan account.
 Go to the Financial Conditions tab page and select the details for the settlement
conditions.
 Display the individual conditions for the insurance premium and double-click to
select the details.
 Display the premium amount and start/end date.
 Go to the Inpayment Agreement tab page and display the detailed view for the
payment conditions.
 Display the individual conditions for the insurance premium. If a standard
condition existed before, you will find a zero condition to end this standard
condition and a new payment condition that is valid from the start date of the
insurance assignment.

Training System
Unit: Integration with CMS
Contents of Unit
- Overview
- Data Exchange
Integration with CMS

 Collaterals for loan accounts cannot be administrated in loans management
but in the collateral management system (CMS).
 CMS stores the collateral objects and the collateral agreements and allows
the assignment to collateralized accounts (loans, current accounts, and so
on.).
 To estimate the actual risk status of a customer or a loan account, you need
actual collateral valuation and capital amounts of the (loan) accounts.
 The valuation of collateral objects can be made in CMS. The loans
management system has to deliver the actual key figures of collateralized
accounts.
Slide 8: Overview
 At first, the figure shows a very high level business process for a loan account.
 On the second level, the quantity of sub processes is only implied. Only sub
processes that are relevant for the integration of loans management and CMS
are named. The processes during the contract management phase, in particular,
are just examples.
 The diagram of components shows a scenario with the integration of account
origination in CRM and collateral management in banking services. The
account origination is only mentioned to show the whole business process. It is
not necessary to use the integration of loans management and CMS.
 Without account origination in CRM, the loan account and the collateral
constellation would be created manually or by another system (integration using
enterprise services).
Slide 9: Overview
Note that the term ‘Receivable’ does not mean the same thing in CMS as it does in
loans management!
In CMS, receivables are the different accounts and so on, that should be
collateralized.
In loans management receivables are expected payments

Training System
System Preparation
To show the delivery of a new loan account and the changes during its life cycle, it is
useful to prepare a collateral agreement with a collateral object in advance.
SAP Menu → Financial Services → Collateral Management → CMS Workbench

 Select CMS in the top menu and go to Set Org Units.
 Enter ‘FRANKFURT’ for Admin Org
 Enter ‘XB1’ for Bank area
Create a new collateral object:
 Go to the New tab page and select Objects → Real Estate →Single family house
(double click)
 Click the Measurement Bases pushbutton and select
- ‘M2’ for Area Unit Of Measure
- ‘M3’ for Volume Unit Of Measure
- ‘EUR’ for Object Currency
 Add a description, for example ‘training house’
 Go to the Valuation Summary tab page
- Insert 100,000 for Nominal Value
- Insert 100,000 for Market Value
 Go to the Business Partner/Documents tab page
- Enter the ID of your Business Partner (account holder)
- Enter ‘1’ for Share Num
- Enter ‘1’ Share Den
 Go to the Usage tab page
- Select ‘self’ in the field Utilization
 Save the object, confirm the warning and note the ID.
Create a new collateral agreement:
 Go to the New tab page and select Agreements → Real Estate Lien →Land
Charge Registered (double click)
 Add a description, for example ‘training land charge’
 Go to the General tab page
- Insert 50,000 with currency EUR for Nominal Value
- Insert 50,000 with currency EUR for Assessment Amount (Asmt
Amt)
- Enter a date for Valid From and another for Valid To ( this date has

Training System
to be later than the system date!)
 Go to the Business Partner/Documents tab page
- Enter the ID of your Business Partner (account holder)
- Ignore the message to enter reference document ID
 Go to Charges tab page
- Use the +-button to create a new line
- Select ‘Single family house’ as the Object Type
- Insert the object ID noted above
- Insert ‘1’ for Ranking order
- Insert ‘1’ for Sequence
- Save the agreement (ignore 2 warnings) and note the ID
System demonstration of ‘Automatic Delivery’

Open account with essential data (use product LO_MORG_TR).
Note: Do not use the following account numbers: 1000 – 1009, 2000 – 2005, 10000
and 1000000000 (in combination with any bank country and bank key). Receivables
with these numbers in their IDs already exist in CMS.
 Contract amount: EUR 80,000
 The agreement must end in the future after the system date
 Note the Internal Contract ID on Management Data tab page
Distribute account data to CMS (and other components like FI-CA).

SAP Menu: Financial Services -> Account Management -> Periodic Tasks ->
Communication with External Systems ->Distribute Account Master Data
 Select your Bank Posting Area
 Go to CNS Identification tab page
 Enter ‘C’ for Change Pointer Status
 Enter the noted Internal Contract ID of your loan account
 Deselect Simulate Process
 Start the report
Check the data of the loan account delivered to CMS.


Training System
 Go to Find tab page and enter selection criteria:
 Find: Receivable
 By: Business Partner
 Product Class: Loan Contract
 Bus.Partner ID: your Business Partner
 Select your loan account with double click
 Check the Contract amt with 80,000, the Max risk with 80,000 and the Current
risk with 0.00
Assign the loan account to the collateral agreement.

 Find: Real Estate Lien
 By: Identification
 CAgmt type: Land Charge Registered
 CAgmt ID: your Agreement ID
 Start selection
 Choose the agreement
 Click Activities pushbutton
 Select ‘Change before Release’
 Go to the Collateral Scope tab page
 Use the +-button to enter a new line
 Select ‘LC0001 Loan Contract’ in the pop-up-window
 Enter the IBAN of you loan account as Receivable (or search with
*accountnumber)
 Save the agreement, ignore warning message
Check the receivable value and the coverage gab in the collateral agreement.
 Go to Calculations tab page:
 Check the Max Risk (80,000) and the Curr Risk (0.00) in the line Receivable
Value
 Check the Max Risk (30,000) and the Curr Risk (0.00) in the line Coverage
Gap.
System demonstration of ‘Query Response Service’

Disburse the loan account partially.
SAP Menu: Financial Services -> Account Management -> Account -> Loans
(Special Functions) -> Disburse Loan

Training System
 Activate a EUR 60,000 disbursement
Check the receivable value and the coverage gab in the collateral agreement.
 Find: Real Estate Lien
 By: Identification
 CAgmt type: Land Charge Registered
 CAgmt ID: your Agreement ID
 Start selection
 Choose the agreement
 Go to the Calculations tab page:
 Check the Max Risk (80,000) and the Curr Risk (60,000) in the line
Receivable Value
 Check the Max Risk (30,000) and the Curr Risk (10,000) in the line
Coverage Gap.

Training System

FS241 - Instructor Guide - FT - FIN

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banking

FS241 Banking services from SAP – SAP

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Revisions to Previous Instructor Guide...................................................................3

Course Instructor Profiles.........................................................................................4

Goals and Objectives.................................................................................................9

January 2010 Page 2

Revisions to Previous Instructor Guide

Course Materials and Other Materials

January 2010 Page 3

Course Instructor Profiles

Level of Knowledge Required

Courses Recommended as Preparation

Online Help Recommended as Preparation

Hints on Preparing This Course

January 2010 Page 4

Hints on Preparing this Course

Training system availability

Test- /prep. system

Using training WTS farm

January 2010 Page 5

January 2010 Page 6

User ID and Passwords for Trainer

User ID and Passwords for Course Participants

Preparation in the System

January 2010 Page 8

Goals and Objectives

After completing this course, you will be able to:

Course Structure and Flow

January 2010 Page 9

January 2010 Page 10

Unit: Integration of Deposit Management and Loans Management on banking services

Slide 4/5: Introduction

The slide contains Account Management and 9 further components.

January 2010 Page 11

Unit: Account Model

120 minutes presentation and system demo

Account Structure concept:

Slide 11: Assignment options for clearing accounts

January 2010 Page 14

Unit: Cash Flow

60 minutes presentation and system demo

Slide 7: Cash Flow Overview

January 2010 Page 15

January 2010 Page 16

January 2010 Page 17

Unit: Scenario Specific Conditions

45 minutes presentation and system demo

January 2010 Page 18

January 2010 Page 19

January 2010 Page 20

Unit: Payment Principles

Putting the Unit in Context

 Introduction and Overview

January 2010 Page 21

Slide 23: Comparison of Principles: Underpayment

January 2010 Page 22

January 2010 Page 23

45 minutes presentation and system demo

Slide 10: Structure of the disbursement order

Slide 20: Disbursement Process: Withholdings