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~ 650 employees,
> 350 customers,
16 locations worldwide

Grifols S.A. benefits from implementing SAP® In-House Cash (IHC)

By Juan de Uña Millán, FI-FSCM Consultant at CONVISTA Consulting Spain

Why SAP® IHC?

The global market and consumer trends evolve so quickly that large corporations cannot afford to do business with standard solutions. This occurs, mainly because they don’t provide sufficient support due to their lack of IT resources. SAP® IHC helps corporations save time and money while gain security to process financial transactions within their corporate group without any third-party involvement.

Grifols S.A. (a multinational parent company in the pharmaceutical and chemical sector) has made it their assignment to build and maintain a competitive edge. By implementing SAP® IHC, intensive banking procedures and significantly faster liquidity status data transferred through their subsidiaries worldwide. With this initiative in place, the group company is inching towards a digital future with significant economic repercussions on their financial results.

The SAP standard solution (Financial Supply Chain Management) offers significant advantages to an international conglomerate of subsidiaries:

  • Improvement of cash visibility
  • Elimination of transactional costs
  • Reduction and expedite internal payments and collections
  • Greater control of intra-group transactions
  • Extension of the SAP ERP, without the need for interfaces and with a reduced service cost
  • Automation close to 100% of the compensation of bank statements with open items (inter-company invoices)

 

The Project

Many companies with Grifol´s magnitude before discovering the SAP® IHC solution ask, ¨How many intra-group payments do we make by the end of the year? Moreover, in shorter periods? ¨. Grifols S.A. discovered in their reports that many of their subsidiaries made payments and collections repeatedly. Most of those being subject to netting, which opens the opportunity for attaining greater cost reduction and balance availability, among other benefits.

A crucial part of the solution was to implement a new business process (built from scratch) for netting - the CONVISTA project team in collaboration with the Grifols S.A. IT department delivered this. The process solely aimed to improve the functionality present within the area of treasury.

The IHC solution consisted of multilateral intercompany netting, using SAP Suite on HANA, amidst an expansive extension of 37 companies, 16 countries and 4 continents. A centralized payment system reconfigured through a single internal virtual bank, for cash management and international netting center (Grifols WorldWide Operations Ltd. GWWO).

To launch the new business process, the master and transactional data needed to realign with business partners, debtors, supplier, and references in payment and collecting invoices. Regarding the transfer of data between the accounting (FI) and treasury (IHC) modules, a new interlink was configured for bank payments and extracts through IDOCs (Intermediate Documents) via ALE, a standard functionality of the SAP ERP.

Next steps

Grifols S.A. continues to set the pace in its sector every year but does not neglect the digital evolution. The company’s commitment is evident in their decision to implement the SAP® IHC solution knowledge of its scalability and future expansion possibilities. It allows external partners (Payments on behalf, Collections on behalf) and others to integrate new process. Functionalities can include Cash pooling, Interest Management and Tax Withholding, based on SAP standard solutions within the extended treasury module and the value of a specialist partner such as CONVISTA.

 

Read the original content in Spanish: https://convista.es/grifols-s-a-utiliza-la-solucion-sap-in-house-cash-para-simplificar-el-netting-multilateral-de-los-pagos-y-cobros-entre-companias-de-grupo/