SAP In-House Cash (IHC) in FSCM

How the in-house bank manages the current accounts, make money transfers, generates bank statements, and receives bank statements.


 

 

Cash Management Reporting Process

Netting

1. Invoice is sent from Subsidiary company A to subsidiary company B. The Invoice is received at company B.

2.After the invoice is recorded, company B starts the payment program The system determines the open items, taking into account the payment terms and the specified bank details, and the payment run generates financial postings by crediting  the bank clearing account and debiting Vendor subsidiary A. The IHC centre has been identified as the Vendor bank of company A and house bank of company code B. Company B instructs its house bank to make the payment to Vendor subsidiary A

3. Bank transactions are executed within the ICH centre, where funds are moved from the current account of subsidiary B into the current account of subsidiary A. In other words the Current Account of subsidiary B is Debited $100 , and the Current Account of subsidiary A is Credited $100

4. After step one and two are complete, the In-House Bank sends Statements to both subsidiary A and B and clears out the open items.

5. With the daily closing of the IHC centre, IHC payables and IHC receivables are updated in the FI component of the headquarters accounting system