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Detailed Lessons toReduce Electronic BankStatement Processingand Reconciliation TimeMichael PrakhinaLazar Consultants     ...
What We’ll Cover ...•   Electronic Account Statement Overview•   How Does Automatic Posting Work?•   Electronic A    El t ...
Electronic Account Statement OverviewHow do you reconcile your Banks today?•   In    I many countries t d account statemen...
Bank Statements and Bank Communication Management                                •   Bank Communication                   ...
Key Instruments of SAP Cash and Liquidity ManagementSource: SAP                                                 5
Key Features of SAP Cash and Liquidity Management     •   Electronic Bank Statements and Incoming Checks          Various...
Managing Cash and LiquiditySource: SAP                        7
SAP In-House Cash — Central Payments Process     1.    Subsidiary 1           Defines a new (virtual) house bank “IHC Cen...
SAP In-House Cash — Central Payments Process (cont.)     3.     3     IHC Center forwards payment information to SAP FI (F...
SAP In-House Cash — Central Payments Process (cont.)     5.       Financial Accounting               Imports the bank sta...
What We’ll Cover ...•   Electronic Account Statement Overview•   How Does Automatic Posting Work?•   Electronic A    El t ...
How Does Automatic Posting Work?•    How does the system identify the accounting transaction and find     the relevant acc...
Electronic Bank Statements Process Flow                Import and Post               Change and Post                      ...
Electronic Bank Statements Process Flow (cont.)Source: SAP                                            14
What We’ll Cover ...•   Electronic Account Statement Overview•   How Does Automatic Posting Work?•   Electronic A    El t ...
Transaction Types•   Define transaction types in order to group together banks with the    same external transaction codes...
Posting Rules•   As part of the configuration of the electronic account statement,    external transactions must be assign...
External Transactions•   External transactions (also known as business transaction codes)    are bank-specific codes for b...
Account Symbols and Account Assignment•   You have to assign G/L Accounts to Account Symbols                   Allowed two...
Account Symbols and Account Assignment (cont.)•   You can enter GL account number generically, i.e., by entering a    seri...
Assigning External Transactions•   Assign the external bank-defined transaction codes to system-    internal posting rules...
Defining Posting Rules•   Create account symbols for required posting transactions•   Define account determination rules f...
Configuration Tasks1.       Creating transaction types2.       Assign bank accounts to transaction types     •     Group t...
String Search for Document Numbers•   The string search supplements the standard interpretation    algorithms     It faci...
Search String Definition                           25
Search Strings Special Characters•   Characters with special meaning in the search string                                 ...
Assign Search String•   Example     Algorithm 001 interprets the information in the note to payee      field as a documen...
Interpretation Algorithms 9 Customer-Specific             Specific    Interpretation     Algorithms                       ...
Interpreting the Note to Payee Fields•   The note to payee fields in the electronic account statement contain    informati...
Functional Enhancements for the Electronic AccountStatement                      •   FEB00001 Electronic account statement...
Use of Lockbox•   Generates G/L account postings – debit bank and credit cash    receipt account     If electronic bank s...
What We’ll Cover ...•   Electronic Account Statement Overview•   How Does Automatic Posting Work?•   Electronic A    El t ...
Using the Electronic Account Statement•   First, each file is transferred (in the relevant account statement    format) to...
Executing the Program — File Specifications     •   Program RFEBKA00 imports files with bank statement dataSource: SAP    ...
Executing the Program — Posting Parameters•   Only bank postings     The system initially posts only to Bank Accounting• ...
Executing the Program — Cash Management•   Cash Management     Creates summarized payment advice in Cash Management for  ...
Executing the Program — Algorithms•   Controls     Document number ranges     Reference document numbers     Bundling a...
Executing the Program — Data Output Options              StatisticsPosting log                                            ...
Displaying Bank Statements•   Transaction FF_6 – Di l    T       ti FF 6 Displays all bank statements in the system for   ...
Displaying Bank Statements (cont.)•   Print out any of the bank statements in the bank data buffer                        ...
Bank Statements Post-Processing                                  Transaction FEBAN                                   Spec...
What We’ll Cover ...•   Electronic Account Statement Overview•   How Does Automatic Posting Work?•   Electronic A    El t ...
Importing Bank Statements Using EDI                                      •   Set up Partner                               ...
Posting Bank Statements                          •   Use transaction FEBP                              (program RFEBKA30) ...
What We’ll Cover ...•   Electronic Account Statement Overview•   How Does Automatic Posting Work?•   Electronic A    El t ...
Resources•   SAP Help Portal     http://help.sap.com/erp2005_ehp_05/helpdata/EN/43/0bd40843d      e11d1896f0000e8322d00/f...
7 Key Points to Take Home•   SAP provides comprehensive applications to manage your    payment and cash processes•   Elect...
7 Key Points to Take Home (cont.)•   A different posting rule can apply to the same external transaction    depending on i...
Your Turn!                How to contact me:                 Michael Prakhina             michaelprakhina@lzar.com        ...
DisclaimerSAP, R/3, mySAP, mySAP.com, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP products and services mentioned he...
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SAP Financials 2011 Prakhina Detailed Lessons To Reduce Electronic Bank Statement Processing and Reconciliation Time

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SAP Financials 2011 Prakhina Detailed Lessons To Reduce Electronic Bank Statement Processing and Reconciliation Time

  1. 1. 0
  2. 2. Detailed Lessons toReduce Electronic BankStatement Processingand Reconciliation TimeMichael PrakhinaLazar Consultants © 2011 Wellesley Information Services. All rights reserved.
  3. 3. What We’ll Cover ...• Electronic Account Statement Overview• How Does Automatic Posting Work?• Electronic A El t i Account St t t Statement Customizing tC t i i• Using the Electronic Account Statement• Receiving Account Statements Using EDI• Wrap-up 2
  4. 4. Electronic Account Statement OverviewHow do you reconcile your Banks today?• In I many countries t d account statement d t can be t i today, t t t t data b electronically retrieved from banks• If the necessary information can be interpreted, the system will automatically post the transactions (using batch input or a call transaction)  All line it li items are usually posted automatically ll t d t ti ll• Statistics show that up to 95% of customer data can be posted automatically in the SAP system  The system offers convenient tools for further processing of line items that are not posted 3
  5. 5. Bank Statements and Bank Communication Management • Bank Communication Management is used to exchange payment and bank statement informationSource: SAP 4
  6. 6. Key Instruments of SAP Cash and Liquidity ManagementSource: SAP 5
  7. 7. Key Features of SAP Cash and Liquidity Management • Electronic Bank Statements and Incoming Checks  Various standard formats for electronic bank statements  Ch k deposit facility to enter checks received Check d it f ilit t t h k i d • Cash Concentration  Clearing proposal in accordance with selection criteria  Manual adjustment of proposal, credit transfers, and correspondence • Planning Items  Intra-day bank statements  Data from operational systemsSource: SAP 6
  8. 8. Managing Cash and LiquiditySource: SAP 7
  9. 9. SAP In-House Cash — Central Payments Process 1. Subsidiary 1  Defines a new (virtual) house bank “IHC Center” beforehand  Starts the standard payment program and generates a payment order 2. IHC Center  Debits the IHC current account of subsidiary 1  Generates and sends a bank statement to subsidiary 1Source: SAP 8
  10. 10. SAP In-House Cash — Central Payments Process (cont.) 3. 3 IHC Center forwards payment information to SAP FI (Financial Accounting) 4. Financial Accounting  SAP FI (Financial Accounting) creates a payment order (payment request)  The payment order is sent to the head office house bankSource: SAP 9
  11. 11. SAP In-House Cash — Central Payments Process (cont.) 5. Financial Accounting  Imports the bank statement via the standard bank statement programs 6. 7. Head office house bank Partner bank } Procedure is the same as for a “normal” payment order to a house bankSource: SAP 10
  12. 12. What We’ll Cover ...• Electronic Account Statement Overview• How Does Automatic Posting Work?• Electronic A El t i Account St t t Statement Customizing tC t i i• Using the Electronic Account Statement• Receiving Account Statements Using EDI• Wrap-up 11
  13. 13. How Does Automatic Posting Work?• How does the system identify the accounting transaction and find the relevant account using the posting rule?1. It finds the transaction type in the Customizing table using the bank key and the bank account2. It determines the posting rule key in the Customizing table from the transaction type and the external transaction code/bank’s business transaction code3. From the posting rule key, it determines the posting specifications and the account determination rules that you p y defined in the configuration of the electronic account statement 12
  14. 14. Electronic Bank Statements Process Flow Import and Post Change and Post Post-processing ofFile provided Bank Data account statements,by house bank Storage e.g., process unsuccessful postings 13
  15. 15. Electronic Bank Statements Process Flow (cont.)Source: SAP 14
  16. 16. What We’ll Cover ...• Electronic Account Statement Overview• How Does Automatic Posting Work?• Electronic A El t i Account St t t Statement Customizing tC t i i• Using the Electronic Account Statement• Receiving Account Statements Using EDI• Wrap-up 15
  17. 17. Transaction Types• Define transaction types in order to group together banks with the same external transaction codes (for example, all banks of the same type) 16
  18. 18. Posting Rules• As part of the configuration of the electronic account statement, external transactions must be assigned to a posting rule  The system uses the posting rules to determine which bank or sub-ledger accounts to post the transactions to  Transaction code 004 denotes a direct debit by debit memo  Transaction code 005 denotes a collection authorization by debit memo  TTransaction code 020 d t a t ti d denotes transfer order b debit memo f d by d bit 17
  19. 19. External Transactions• External transactions (also known as business transaction codes) are bank-specific codes for business transactions, each of which involves a different type of payment  020 Transfer order  051 Transfer credit memo  052 Recurring entry credit memo  072 Bill of exchange presentation  206 Foreign bank transfer 18
  20. 20. Account Symbols and Account Assignment• You have to assign G/L Accounts to Account Symbols Allowed two postings for Area 1 and Area 2 per EBS transaction 19
  21. 21. Account Symbols and Account Assignment (cont.)• You can enter GL account number generically, i.e., by entering a series of “+” signs 20
  22. 22. Assigning External Transactions• Assign the external bank-defined transaction codes to system- internal posting rules for each transaction type  The +/ sign +/–  Differentiate external transactions by setting “+” or “–” signs for them  If the external transaction code has a “+” sign in front of it, it is a cash receipt; likewise, a “–” sign represents a cash disbursement  The interpretation algorithm  The interpretation algorithm determines whether the system should search the note to payee lines 21
  23. 23. Defining Posting Rules• Create account symbols for required posting transactions• Define account determination rules for each of account symbols• Create posting specifications to post to G/L or bank accounts (posting area 1) and sub-ledger postings (posting area 2) 22
  24. 24. Configuration Tasks1. Creating transaction types2. Assign bank accounts to transaction types • Group t th all banks th t use th same external G together ll b k that the t l transaction codes under the same transaction types3. Create keys for posting rules • The system needs these to find the posting specifications4. Assign external transactions to posting rules5. Create account symbols6. Assign G/L accounts to account symbol7. Define posting rules 23
  25. 25. String Search for Document Numbers• The string search supplements the standard interpretation algorithms  It facilitates the automatic identification of document numbers even if they are incomplete or have been changed  You can call up all possible document numbers sent by your customer using the search strings without having to do any programming  After you have defined search strings for document numbers numbers, the system first carries out a search string before starting the interpretation algorithm 24
  26. 26. Search String Definition 25
  27. 27. Search Strings Special Characters• Characters with special meaning in the search string 26
  28. 28. Assign Search String• Example  Algorithm 001 interprets the information in the note to payee field as a document number or reference number  Search string P1 will be used  The result of the target field will be updated 27
  29. 29. Interpretation Algorithms 9 Customer-Specific Specific Interpretation Algorithms 28
  30. 30. Interpreting the Note to Payee Fields• The note to payee fields in the electronic account statement contain information used to clear open items• The following information may be included in the electronic account statement for each line item:  Document number  Reference document number  Check number 29
  31. 31. Functional Enhancements for the Electronic AccountStatement • FEB00001 Electronic account statement • FEB00002 Interface – External check entry • FEB00003 Customer exit for Finnish bank statement TITO format • FEB00004 Raw data processing, user exit SWIFT MT940 • FEB00005 Electronic Banking – Account Statement Object Generation EDI IDoc 30
  32. 32. Use of Lockbox• Generates G/L account postings – debit bank and credit cash receipt account  If electronic bank statements are used then this indicator should be turned off as it will double up the entry• Creates payments postings to customer accounts• Inserts new bank details by changing customer master record 31
  33. 33. What We’ll Cover ...• Electronic Account Statement Overview• How Does Automatic Posting Work?• Electronic A El t i Account St t t Statement Customizing tC t i i• Using the Electronic Account Statement• Receiving Account Statements Using EDI• Wrap-up 32
  34. 34. Using the Electronic Account Statement• First, each file is transferred (in the relevant account statement format) to the bank data storage• The data that is used to derive the clearing information from unstructured information is then interpreted  This clearing information is stored in bank data storage• Batch input sessions are then created, or the account statements are posted directly 33
  35. 35. Executing the Program — File Specifications • Program RFEBKA00 imports files with bank statement dataSource: SAP 34
  36. 36. Executing the Program — Posting Parameters• Only bank postings  The system initially posts only to Bank Accounting• System creates two batch input sessions:  Bank accounting  S bl d Sub-ledger accountingti• Do not post  If you select this indicator, no postings are generated. The data indicator generated is loaded into bank data storage and held there. 35
  37. 37. Executing the Program — Cash Management• Cash Management  Creates summarized payment advice in Cash Management for planning, which can only be processed after cash planning is complete• Account Balance A tB l  Posting executed with statement type 0004 for end of day statement• Summarization  Items are summarized in payment advice by value date• Planning type  Controls manual planning 36
  38. 38. Executing the Program — Algorithms• Controls  Document number ranges  Reference document numbers  Bundling a groups bank statement items together 37
  39. 39. Executing the Program — Data Output Options StatisticsPosting log 38
  40. 40. Displaying Bank Statements• Transaction FF_6 – Di l T ti FF 6 Displays all bank statements in the system for ll b k t t t i th t f the given account 39
  41. 41. Displaying Bank Statements (cont.)• Print out any of the bank statements in the bank data buffer 40
  42. 42. Bank Statements Post-Processing Transaction FEBAN  Specific selection of account statement t t t t items  Display account statement items  Edit account statement items  Display the note to p y payee separately  Block items or account statements  Change customer  Delete payment advice note  Selection and posting fields 41
  43. 43. What We’ll Cover ...• Electronic Account Statement Overview• How Does Automatic Posting Work?• Electronic A El t i Account St t t Statement Customizing tC t i i• Using the Electronic Account Statement• Receiving Account Statements Using EDI• Wrap-up 42
  44. 44. Importing Bank Statements Using EDI • Set up Partner Profile • Assign Inbound message type “FINSTA” 43
  45. 45. Posting Bank Statements • Use transaction FEBP (program RFEBKA30) to post bank statements • Use transaction FEBAN for post-processing 44
  46. 46. What We’ll Cover ...• Electronic Account Statement Overview• How Does Automatic Posting Work?• Electronic A El t i Account St t t Statement Customizing tC t i i• Using the Electronic Account Statement• Receiving Account Statements Using EDI• Wrap-up 45 45
  47. 47. Resources• SAP Help Portal  http://help.sap.com/erp2005_ehp_05/helpdata/EN/43/0bd40843d e11d1896f0000e8322d00/frameset.htm e11d1896f0000e8322d00/frameset htm• SAP Developers Network  www.sdn.sap.com/irj/sdn/bpx-forums www.sdn.sap.com/irj/sdn/bpx forums• Jaime Ryan, “Derive Greater Value from Little-Known SAP Electronic Bank Statement Functionality” (Financials, 2009).• Christian Mnich, “Payments and Bank Communication Management” (SAP U.S. Treasury Management Conference, 2009). 46
  48. 48. 7 Key Points to Take Home• SAP provides comprehensive applications to manage your payment and cash processes• Electronic Bank Statements are not going away• Posting specifications are not defined using G/L account numbers, but using accounts symbols• Depending on the external transaction code and your Customizing settings, a single line item from an electronic account statement can automatically trigger up to two posting transactions which are known as “Posting Areas” 47
  49. 49. 7 Key Points to Take Home (cont.)• A different posting rule can apply to the same external transaction depending on incoming or outgoing payments identified by +/– sign• Bank Communication Management is used to exchange payment and bank statement information• You can reduce bank and sub-ledger open items reconciliation time by utilizing Electronic Bank Statements 48
  50. 50. Your Turn! How to contact me: Michael Prakhina michaelprakhina@lzar.com 49
  51. 51. DisclaimerSAP, R/3, mySAP, mySAP.com, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP products and services mentioned herein as well as theirrespective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other productand service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled bySAP. 50

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