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

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2. Detailed Lessons to
Reduce Electronic Bank
Statement Processing
and Reconciliation Time
Michael Prakhina
Lazar Consultants
© 2011 Wellesley Information Services. All rights reserved.

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. Electronic Account Statement Overview
How 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
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5. Bank Statements and Bank Communication Management
• Bank Communication
Management is used to
exchange payment and bank
statement information
Source: SAP 4

6. Key Instruments of SAP Cash and Liquidity Management
Source: SAP 5

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 systems
Source: SAP 6

8. Managing Cash and Liquidity
Source: SAP 7

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 1
Source: SAP 8

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 bank
Source: SAP 9

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 bank
Source: SAP 10

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
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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 account
2. It determines the posting rule key in the Customizing table from
the transaction type and the external transaction code/bank’s
business transaction code
3. 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
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14. Electronic Bank Statements Process Flow
Import and Post Change and Post
Post-processing of
File provided Bank Data
account statements,
by house bank Storage
e.g., process
unsuccessful postings
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15. Electronic Bank Statements Process Flow (cont.)
Source: SAP 14

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. 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)
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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
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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
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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
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21. Account Symbols and Account Assignment (cont.)
• You can enter GL account number generically, i.e., by entering a
series of “+” signs
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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
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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)
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24. Configuration Tasks
1. Creating transaction types
2. 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 types
3. Create keys for posting rules
• The system needs these to find the posting specifications
4. Assign external transactions to posting rules
5. Create account symbols
6. Assign G/L accounts to account symbol
7. Define posting rules
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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
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26. Search String Definition
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27. Search Strings Special Characters
• Characters with special meaning in the search string
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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
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29. Interpretation Algorithms
9 Customer-Specific
Specific
Interpretation
Algorithms
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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
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31. Functional Enhancements for the Electronic Account
Statement
• 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
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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
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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
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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
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35. Executing the Program — File Specifications
• Program RFEBKA00 imports files with bank statement data
Source: SAP 34

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.
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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
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38. Executing the Program — Algorithms
• Controls
 Document number ranges
 Reference document numbers
 Bundling a groups bank statement items together
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39. Executing the Program — Data Output Options
Statistics
Posting log
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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
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41. Displaying Bank Statements (cont.)
• Print out any of the bank statements in the bank data buffer
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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
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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. Importing Bank Statements Using EDI
• Set up Partner
Profile
• Assign Inbound
message type
“FINSTA”
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45. Posting Bank Statements
• Use transaction FEBP
(program RFEBKA30) to
post bank statements
• Use transaction FEBAN
for post-processing
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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
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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).
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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”
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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
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50. Your Turn!
How to contact me:
Michael Prakhina
michaelprakhina@lzar.com
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51. Disclaimer
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respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product
and service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled by
SAP.
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