PS Financial Gateway
Implementation v9.0
Use Case
By Rick Gray
rgray2@aep.com
(614)716-1998
LINK 10
November 16 – 18, 2010
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Contents
AEP – Company Overview
– Project Scope
– FG Overview
– Implementing –
• Bank File Loading
• Upgrading Bank Account Reconciliation
• Payment Process
– Upgrading AP Electronic Payment Process
– Implementing Treasury Electronic Payment Process
– FG Processing Customization and Challenges
– FG - “What we liked”
– AEP Requests for FG
– Questions
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November 16 – 18, 2010
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AEP – Company Overview
American Electric Power has been providing electric service for
more than 100 years and is one of the nation’s largest electric
utilities, serving in 11 states.
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–
–
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Revenues
Net Income
Service Territory
Total Assets
U.S. Customers
Employees
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November 16 – 18, 2010
2009
$13.5 billion
$1.362 billion
~ 200,000 Square Miles
$45.2 billion
Over 5.2 million
~ 20,000
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Project Scope
•
• PS Modules: AP, AR/BI, GL, Treasury, Project Costing
• Technical Upgrade
– Reapply customizations, unless no longer required
– No new functionality, unless replaced customizations
• AP previously had custom electronic payment processes
Financial Gateway replaced existing customizations
• FG added functionality to Treasury for electronic payments
• Technical Scope
– Double upgrade from 8.0 -> 8.9 -> 9.0 (1.8 tera-bytes of data)
– 5,358 Functional Requirements
• 441 Customizations (Work Units)
– 18,204 PeopleSoft, 222 non-PeopleSoft Objects customized
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November 16 – 18, 2010
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Financial Gateway Scope Overview
•Bank Statements (prior and current day)
•Electronic Payments
•Payment Acknowledgements
PeopleSoft
Financial
Gateway
Banks
PeopleSoft
FCM
•Positive Pay Files (Customized)
•Payroll (HRM) Can Build Custom Table
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November 16 – 18, 2010
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Financial Gateway Overview
Bank Statement Process Flow
Back-end
Bank
System
Financial
Gateway
Treasury
Management
Bank
Statement
Table
BAI Bank
Statement Files
Treasury
Management
Cash Position
Operations
Treasury
Bank
Reconciliation
Accounts Receivables Posting
(Not Implemented at AEP)
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November 16 – 18, 2010
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Implementing Bank File Loads
• AEP imports bank files from 4 banks
– All 4 sources (161 accounts) have prior day bank statement file imports
– Two sources (100 accounts) have current day file imports (including Fed
presentments for controlled disbursement accounts). Current Day imports
are hourly from 8:00AM through 3:00PM.
• Bank Transaction Volumes
– 120,000 bank transactions a month in BAI2 format
– BAI2 codes are used on the import mapping into the Treasury Bank
Statement Tables
• Customizations
– None!
– We did contact two banks and request some changes from the formatting
we were using in the old version and they made the changes
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November 16 – 18, 2010
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Upgrading Automated Bank Recon
• Bank Transaction Volumes
– 120,000 bank transactions per month
– Reconciled 210,000 source transactions to the bank transactions
– Sources include integrated AP, Other Accounts Receivable and
Treasury
– External sources include Payroll and Customer AR system
• Post Upgrade
– Auto reconciliation process went from 2 hour process to ½ hour
each day
– 96% of transactions auto-reconciled
– Currently we reconcile “batch” total, we are looking to change to
more detail line level based on improved performance, increasing
accuracy.
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November 16 – 18, 2010
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Upgrading Automated Bank Recon
•Bank Reconciliation Customizations
– We reduced customizations. Some reductions due to understanding
the system better and others based on improved functionality.
– Customizations still in place
• Identifying Match Groups - places an id on each transaction to easily view the
transactions matched, and provides detail on how they matched (which common field(s)).
• Auto process initiation - This process determines which Accounts have activity and
queues up the process initiation for each Account. This makes the reconciliation process
more efficient and automated. Otherwise this would be a manual process or the process
would run all banks and accounts at once.
• Parse data within Adenda - Moves data out of addenda to a separate field for more
efficient matching (instead of searching on the addenda (which is large), we parse that data
out before hand to enhance performance of the matching process.
• Sign-adjuster - Customization to determine the sign of the amounts on the bank
statement. The bank statements do not have an identifier (+/-) for the amounts passed to
us in the file. We created a customization to determine the sign based upon the BAI code.
LINK 10
November 16 – 18, 2010
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Financial Gateway Payment Overview
Payment Process Flow
Payment Acknowledgement
Accounts
Payables
Financial
Gateway
Wire/Transfers
Back-end
Bank
System
Treasury
Management
ACH Payments
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November 16 – 18, 2010
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Financial Gateway Overview
Pages Used in FG for Payment Processing
Accounts
Payables
Treasury
Management
Financial
Gateway
Dispatch
Payments Page
Override Payment and
File Status
(Change Transaction Status)
Cannot Alter Data
Bank
Import
Acknowledgment
Files Page
Payment Review with Drill Down capabilities does exist and is great!
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November 16 – 18, 2010
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Financial Gateway Overview
Configuration Required for Electronic Payments
EDI Layout Catalog
• 820 Wire
• EFTACH
• Bank Statement
Load
• 997 ACK
Bank Integration
• Assign Layout to
Bank
• Communication to
Bank
• Map BAI codes
with PS
Treasury Configuration
Bank Set Up
• (Citibank, NY)
Bank Account
• Individual Accounts
• (Payment Methods)
• WIR = 820
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November 16 – 18, 2010
Settlement
Instructions
• Bank Account
Number
• Counterparty
• Beneficiary
Information
EDI Layout
Augmentation
• Source Registration
(Provide File Header
Information)
• Assign Transaction
Status with Events
• Define Payment File
Grouping
Financial Gateway
Configuration
File Scheduler
• Set payment file
creation on an
automated schedule
FG Security
• Not used at AEP
• Can specify access to
groups of transactions.
Integration
Broker
(Part of
PeopleTools)
Communication
AEP Sends to
internal B2B
(Webmethods
encrypts and
communicates
with banks)
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Implementing FG Electronic Payments
•Accounts Payables (AP)
– AP had Existing Feeds for ACH and Wire Payments with
two external banks
– Re-engineered to electronic payments via FG, with no
functionality loss!
– Main Functionality Points or Requirements:
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Separate AP payments from Treasury, ACH’s from Wires
Bank Accounts required new configuration (payment methods)
Non-standard payment information flow through
Payment review process
LINK 10
November 16 – 18, 2010
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Implementing FG Electronic Payments
•AP Customizations:
– Automatically switch the payment layout code between
ACH and WIRE
– AP users were prevented from changing payment layout
– Customized FG dispatch to populate different comments
in addenda field for Tax payments
LINK 10
November 16 – 18, 2010
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Implementing FG Electronic Payments
• Treasury (TR)
– Electronic payments is new functionality for TR
– TR responsible for managing bank accounts, short and long term
financing payments, and the daily funding of business units
– Segregation of duties is very critical
•
•
•
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Bank Account Configuration
Settlement Instructions
Initiating cash transactions
Bank Account Reconciliation
– Timing (near real time) of payments
– Ease and thorough review and/or approve payments
– Audit trail in order to trace payment back to source
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November 16 – 18, 2010
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Implementing FG Electronic Payments
•Treasury (TR) Customizations
– Security
• Segregate Settlement Information from initiating payment
– Require Templates (EFT’s)
– Not removing any access to beneficiary account and routing numbers
• Locked the Require two approvers to “Select” and “Approve”
Settlements configuration
• Allow update access to addenda information only
– Payment Review – prior to release
• Review All settlement information within Financial Gateway
• Default Layout method based on payment type (avoid AP conflicts)
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November 16 – 18, 2010
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Implementing FG Electronic Payments
• Overall FG Implementation Challenges:
– Extensive and complicated configuration
– Coordinate communications with banks is a substantial effort
• Mapping layouts
• Encryption and/or decryption
• Other security (passwords and test vs. production)
– Exception Processing for Treasury
• Cancel Payments, change a payment, payment must be in paid status
• FG Customizations:
– Scrub Delimiters
– Customized Maps for Payments and Acknowledgments
– Backing out a Bank Statement Load
LINK 10
November 16 – 18, 2010
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Financial Gateway – Accolades
•FG “things we liked!”:
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Sound module – not buggy
Intuitive for users…easy to navigate
Love the drill back to source transaction feature!
Drill back even allows you to go directly back to where
you came from.
– View of the payment and bank statement raw data is
very useful
– Integrated well with other Finance modules including
accounting status
LINK 10
November 16 – 18, 2010
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Request for Improvements with FG
• AEP’s Wish List:
– Exception Processing for Treasury
– Better Segregation of Duties – Security
• Approval Process for Settlement Instructions
• EFT Templates should not be editable
– Scrub Delimiters
– Payment Review should include a view of all settlement instruction,
including addenda
– Default payment layout based on payment type and disallow editing
– Include HR (Payroll - Delivered) and Positive Pay Files
– Map Fed Reference wire payment numbers from Acknowledgements back to
source tables for reconciliation process
– Backing out a Bank Statement Load
LINK 10
November 16 – 18, 2010
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Questions?
Rick Gray
AEP Cash Management
rgray2@aep.com
LINK 10
November 16 – 18, 2010
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