This book provides Finance professionals, Treasurers, and CFOs with a roadmap for making their SAP processes compliant with SOX requirements. Combining comprehensive coverage of the major applications (Electronic Banking, Positive Pay, Cash & Liquidity Management, In-House Cash) with discussion of relevant control structures, processes, and compliance matrices for each, this book lends guidance to those tasked with integrating SOX compliance into established or proposed SAP implementations.

The authors focus first on processes (e.g., intercompany processing), then expand to specific applications (e.g., In-House Cash), followed by a summary of the associated controls (e.g., domestic vs. foreign processing).

Functional-level finance professionals involved in the daily management of a Treasury implementation, particularly, will find many proven processes with which to build or enhance effective compliance strategies.

Highlights

• Financial Risk Management
• Transaction Management
• In-House Cash
• Electronic Banking
• Control Mechanisms
• Foreign Exchange and Derivatives
• Cash Management

About the Author(s)

Arjun Krishnan is a platinum-level FI/ Treasury consultant with 10 years of SAP experience, specializing in Treasury, Cash Management, Electronic Banking, Corporate Finance Management, and ERP Financials. Alamanda Balaji Kumar is a certified SAP consultant specializing in SAP Treasury and ERP Financials. He has over 12 years of experience working on global SAP implementations.

Table of Contents

1 ... Business and Functional Overview ... 23
... 1.1 ... ERP Treasury Systems: A New Era ... 23
... 1.2 ... Standalone Workstation or ERP Treasury System ... 24
... 1.3 ... Key Drivers and Challenges for Treasury Management ... 27
... 1.4 ... The Sarbanes-Oxley Act of 2002 and its Impact on Treasury Governance and Operations ... 29
... 1.5 ... SAP ERP Treasury Functionality ... 34
... 1.6 ... Summary ... 53


2 ... Controls in SAP ERP ... 55
... 2.1 ... Control Framework and Objectives ... 55
... 2.2 ... Risk and Internal Control ... 59
... 2.3 ... Control Mechanisms in SAP ERP ... 61
... 2.4 ... Summary of Controls in SAP ERP ... 89
... 2.5 ... Risk/Control Matrix ... 92
... 2.6 ... Summary ... 94


3 ... Inbound Electronic Banking in SAP ERP ... 95
... 3.1 ... The Inbound EBS Process Flow ... 95
... 3.2 ... Banking Structure and Master Data ... 97
... 3.3 ... Straight Through Processing (STP ... 112
... 3.4 ... Prior Day Bank Statements ... 122
... 3.5 ... Bank Reconciliation and Control ... 129
... 3.6 ... Summary of Controls for Inbound Electronic Banking ... 139
... 3.7 ... Summary ... 140


4 ... Outbound Electronic Banking in SAP ERP ... 141
... 4.1 ... Master Data Structure and Controls ... 143
... 4.2 ... ACH Payments ... 148
... 4.3 ... Wire Transfers ... 155
... 4.4 ... The Payment Medium Workbench (PMW ... 166
... 4.5 ... File Transmission ... 176
... 4.6 ... Using Workflow to Route Authorizations ... 178
... 4.7 ... Implementing Outbound Banking in SAP ERP: Lessons Learned ... 179
... 4.8 ... Summary of Key Controls ... 180
... 4.9 ... Summary ... 181


5 ... Positive Pay and Payment Card Processing ... 183
... 5.1 ... Positive Pay ... 183
... 5.2 ... Lockbox Processing ... 193
... 5.3 ... Procurement and Credit Card Processing ... 207
... 5.4 ... Escheatment ... 224
... 5.5 ... Summary ... 228


6 ... Cash Management & Liquidity Forecasting ... 229
... 6.1 ... Cash Management ... 230
... 6.2 ... Reporting ... 256
... 6.3 ... Controls for Cash Management ... 260
... 6.4 ... In-House Cash (IHC) Management ... 263
... 6.5 ... Summary ... 277


7 ... Financial Risk Management: Foreign Exchange and Derivatives ... 279
... 7.1 ... Master Data for FX Transaction Management ... 282
... 7.2 ... Master Data for Transaction Processing ... 283
... 7.3 ... Master Data for Transaction Management ... 289
... 7.4 ... Master Data for Accounting, Valuation, and Reporting ... 296
... 7.5 ... Workflow Management ... 297
... 7.6 ... Transaction Management ... 298
... 7.7 ... Hedge Management ... 309
... 7.8 ... Integration with Cash Management ... 317
... 7.9 ... Market Data Management ... 318
... 7.10 ... Summary ... 319


8 ... Investment and Debt Management ... 321
... 8.1 ... Master Data Structure ... 322
... 8.2 ... Transaction Management ... 330
... 8.3 ... Market Data Management ... 344
... 8.4 ... The Analyzers ... 348
... 8.5 ... Integration with Cash Management ... 361
... 8.6 ... Reporting ... 362
... 8.7 ... Summary ... 363


9 ... Tools and Techniques for Internal Controls in SAP ERP ... 365
... 9.1 ... Management of Internal Controls (MIC ... 366
... 9.2 ... Audit Information Systems (AIS ... 377
... 9.3 ... SAP GRC and Other SOX Compliance Systems ... 385
... 9.4 ... Managing a SOX Audit from the Treasury Perspective ... 386
... 9.5 ... Reporting, Audit Trail and Documentation ... 392
... 9.6 ... Summary ... 398


10 ... Special Topics in Treasury Management ... 399
... 10.1 ... Upgrading SAP ERP ... 399
... 10.2 ... Archiving ... 417
... 10.3 ... New Treasury-Related Functionality in SAP ERP ... 427
... 10.4 ... Summary ... 431
... 10.5 ... Conclusion ... 431