2.2 In-House Cash landscape

With SAP’s In-House Cash module, companies can create a virtual house bank within their organization. The organizational units involved in an IHC implementation are the subsidiaries that have at least one current account at the in-house bank, and the legal entity where the in-house bank resides. A current account is the name given to a bank account at the in-house bank. A current account and virtual account are the same thing. Throughout this book, we use the terms current account and virtual account interchangeably. Please refer to Section 10.1.2 Definition of Terms, in Chapter 10.

The in-house bank is created as a house bank in SAP, and the current (bank) accounts at the in-house bank are created as house bank accounts in the subsidiary company codes. Payments are sent between the subsidiaries and the in-house bank, and the in-house bank sends bank statements to the subsidiaries. External bank accounts are necessary and are used by the in-house bank for centralized outgoing and incoming payments.

Figure 2.2 outlines the landscape of the IHC module. As the reader of this book will see, the beauty of the IHC module is how it fits in so well with existing Accounts Receivable (AR), Accounts Payable (AP), and bank statement functionality in SAP.

Figure 2.2: Landscape of SAP’s IIHC module

One last important point to mention regarding implementing SAP’s IHC module is that the module can be implemented either with the initial SAP implementation, or after a company is already live in SAP. This is because implementing an in-house bank fits into productive company codes just like adding a new house bank would. The difference is that the new house bank is an internal house bank as opposed to an external house bank.