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Credit Card Processing in SAP

Credit Card Processing in SAP

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Credit Card Processing in SAP

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  1. Credit Card Processing in SAP Robert Pulaski – Sr. Manager/Architect

  2. Learning Points • Why automate credit card processing? • A basic understanding of credit card processing • An overview of the process and related accounting for credit card processing in SAP • Highlight some important configuration in the IMG • Discuss implementation options and issues • Highlight some best practices

  3. Why automate credit cards in SAP? Answer - Improved ROI • Improve cash flow by reducing outstanding receivables from 30 – 90 days to 1 to 3 days • Reduce bad debt • Possibly reduce paper invoicing costs • Increase transaction efficiency

  4. Terminology • Merchant ID – unique id identifying the supplier(you) • Processor (Clearing House) – provides authorization and settlement services • Merchant Bank – supplier’s bank(your bank) • 3rd Party Provider – provides the interfacing solution to allow SAP to communicate with the processor

  5. Process Flow for Credit Card Processing Supplier requests authorization and at a later time batch settlement Processor provides authorization and settlement services Buyer gives credit card info Banks issue and receive funds

  6. Process Overview in SAP • Save valid sales order • Authorization request sent (real-time) • Authorization response - accept/decline (real-time) • Ship • Bill • Settlement (batch)

  7. Save Valid Sales Order – VA01

  8. Authorization Response – VA01

  9. Authorization Response – VA01

  10. Document Flow – VA01

  11. Billing – Accounting Document – VF01

  12. Accounts Receivable Customer – FBL5N

  13. GL Account Open Item – FBL3N

  14. Settlement – FCC1

  15. Settlement – FCC1

  16. Settlement – FBL3N

  17. IMG Configuration

  18. IMG Configuration –Setting Up Card Types

  19. IMG Configuration –Setting Up Merchant ID

  20. IMG Configuration – Assign Merchant ID

  21. IMG Configuration – Account Determination

  22. IMG Configuration – Assign Clearing Account

  23. Implementation Options • Build a custom program(s) to interface with the processor(s) • Purchase a 3rd party solution from vendors such as Cybersource or Paymetric • Manual (as a backup?)

  24. Pros/Cons Custom Programs • Pros • Lower initial external cost • Possibly lower transaction costs • If it already works – don’t fix it? • Cons • Custom development costs • Possible custom configuration in SAP • Maintenance of custom code

  25. Pros/Cons 3rd Party Solution • Pros • No/little custom development costs • Less custom configuration in SAP • Maintenance/support of 3rd party vendor • Quicker to implement? • Can offer additional functionality beyond SAP delivered • Cons • Initial external cost • Possibly higher transaction costs • Maintenance/support of 3rd party vendor

  26. Implementation Issues • 3rd Party Installation • Servers • Access keys • RFC calls • Etc.. • Make sure you have good Basis and IT people if you attempt installation yourself. Otherwise best to have the 3rd party provider handle the installation.

  27. Implementation Issues • Authorization horizon/validity • Authorization window – number of days within a shipping confirmation window before a valid authorization can be issued • Authorization validity period – number of days an authorization is valid before a new authorization is required • Typically 28-30 days • Back orders can be a royal pain!

  28. Implementation Issues • Additional charges • Exact total for additional charges such as freight not known • Solution – user exit

  29. Implementation Issues • Split shipments • Partial or multiple shipments can require several authorizations • Solution – user-exit

  30. Implementation Issues • Multiple cards on one order • Different credit limits • Different credit card owners • CRM – different capabilities (though similar process)

  31. Implementation Issues • Foreign Currency • Make sure the clearing house you use can handle all currencies required

  32. Best Practices • Encrypt credit card data via either 3rd party or SAP (4.6c) • Can require OSS notes • Limit access to credit card information via security • Only those who need access • Additional fraud checks • Address check • CID – Card Identification Number • Can require OSS notes or user-exits

  33. Additional Transactions • FCC2 – Repeat Settlement • FCC4 – Display Logs • FCC3 – Delete Logs • FBRC – Reset Cleared Items • FCCR - Standard Reports • VKM1 – Credit Hold Report • VCC1 – Payment Card Credit Hold Report (New)

  34. Different Flavors of SAP • CRM • SAP Retail and POS • Etc…

  35. Summary • Automated credit card processing can be efficient and enhance ROI • In most cases buying a 3rd party solution is going to be the best option compared to building a series of in-house custom programs • There will be lots of issues that need to be thought out carefully • Take credit card fraud seriously

  36. Q&A Robert Pulaski Senior Manager - Architect Hitachi Consulting www.hitachiconsulting.com Direct: 804.291.6009 rpulaski@hitachiconsulting.com Inspiring your next success! ®

  37. 1103 / Credit Card Processing in SAP Session Code: