The Financial Accounting - Loans Integration ES bundle provides enterprise services that integrate the operational and analytical bank applications in the area of loan contract management.
Every event in the operational life of a loan has accounting implications, from the approval of the loan, the disbursement of the loan, and the timely payments (or missed payments) of the loan.
These events must be communicated to the analytical side of the business so that the bank's general ledger can be updated. This ES bundle provides seamless, automatic communication of all such operational events from SAP Loans Management, which is used to handle the operational side, to SAP Bank Analyzer, which then updates the bank's general ledger, in whatever system that general ledger resides (for example, SAP ERP). This latter integration already exists and is outside the scope of this bundle. This bundle simply integrates SAP Loans Management with SAP Bank Analyzer, offering tight, cross-application integration of analytical and operational banking.
Loans also have accounting implications when it comes to closing the books at the end of the year or the end of the quarter. In this case, the analytical system must request settlement data from the operational system, a snapshot of all the data for all loans accounts. This ES bundle also provides services related to this settlement process.
The Financial Accounting - Loans Integration ES bundle leverages enterprise SOA through providing enterprise service-based communication between SAP Loans Management and SAP Bank Analyzer.
Financial Accounting - Loans Integration (click to enlarge)
The Financial Accounting - Loans Integration ES bundle is aimed at the banking industry, including all financial institutons that service loans for their customers.
Roles that will benefit from the integration offered by this ES bundle include:
- Loan contract officers
For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.
How To Use This ES Bundle
This section will explore a series of use cases for the Financial Accounting - Loans Integration ES bundle. While these use cases illustrate a few of the ways that this ES bundle could be used, the intention is to show the flexibility and reusability of these business objects and enterprise service operations so that you will have a clearer understanding of how to best deploy them in your own environment. This wiki is also a space for you to share knowledge and collaborate with others who are implementing the Financial Accounting - Loans Integration ES bundle.
Use Case 1: Communicating Loans Operation Information to SAP Bank Analyzer
Especially when interest rates are low, banks that offer loans experience a lot of activity in any given day. Some activity occurs when customers come into the bank to request a loan, check on the approval of a loan, have a loan disbursed, make a payment on a loan, or pay off a loan. Of course, most of the events related to loans today are processed electronically, adding up to even more activity. Each of these categories of activities has accounting implications for the bank.
From an accounting standpoint, it doesn't make sense to communicate these events in real-time as they occur. Instead, SAP Loans Management collects these events throughout the day and then, once a day or on a scheduled basis, invokes enterprise services relating to each category of events.
Events relating to loans contracts
For new loans, SAP Loans Management invokes the Inform of Contracts Creation enterprise service, which uses the Loan Contract business object, to propagate all data about new loans to SAP Bank Analyzer. For each loan, this service includes not just the fact that a loan is new, but also many attributes that are needed to analyze the loan contract, including all details related to:
- Who is borrowing the money
- The amount of the loan
- The terms and conditions of the loan contract
To propagate information about changes to loan accounts, such as an increase of the loan amount or changes to the terms and conditions, SAP Loans Management invokes Inform of Contracts Change, which transmits all relevant details to SAP Bank Analyzer.
Events relating to disbursements and payments
For loans that are disbursed, which debits the loan account, SAP Loans Management invokes Inform of Bank Accounts Item, which uses the Bank Account business object, to communicate this information to SAP Bank Analyzer. Loan payments are handled by the same service, but represent a credit to the loan account, so a different parameter is passed. Use of the Bank Account business object here indicates that money is moving from the bank to the borrower or vice versa.
Events relating to interest calculation or charges
When interest is charged to the loan or calculated, this is referred to as a settlement. SAP Loans Management invokes the Inform of Bank Account Settlements enterprise service, which uses the Bank Account Settlement business object, to transfer information about interest on a loan to SAP Bank Analyzer.
Use Case 2: Requesting Accrual Information from SAP Bank Analyzer
Every day, events happen in the loans management operational system and every night, these events are transferred over to SAP Bank Analyzer, which will ultimately convey this information to the bank's general ledger.
But there is another case in which the situation is turned around and SAP Bank Analyzer requests information from the operational system, SAP Loans Management. When books are being closed, at the end of a fiscal year or the end of a fiscal period, the accounting system needs information about accrued interest. In this case, SAP Bank Analyzer invokes the Request Accrual Result Bulk Creation enterprise service, which asks SAP Loans Management to send all accrual information about all the active loans as soon as possible. Once this information has been gathered, SAP Loans Management returns the results using the Inform of Bank Account Settlements enterprise service. Both of these enterprise services use the Bank Account Settlement business object.
- SAP Loans Management
- SAP Bank Analyzer
- SAP Banking Services 6.0