The document outlines the procedures for managing accounts receivable in an SAP-ERP environment, focusing on financial transactions, electronic funds transfer (EFT), and lockbox payment processing. It details how payments are processed, matched to customer accounts, and adjustments made to payment advices, along with the use of specific transaction codes for manual processing. Additionally, it emphasizes the importance of timely cash application to support accounting periods and provides guidance on using reporting tools and transaction functions within SAP.

1. Accounts Receivable Version 1.0 Unit 5: Financial Transactions, EFT and Lockbox SAP-ERP

2. Course Agenda Topic 1: Introduction Topic 2: Customer Master Topic 3: SAP Documents Topic 4: Accounts Receivable Functions Topic 5: Financial Transactions, EFT and Lockbox

3. Electronic Funds Transfer (EFT) Customers who remit via EFT have been assigned to specific AR staff members The remittance advices are received each morning, and researched. The appropriate changes are made to the advice the same day in advance of the payment The payment is processed that evening by SAP and applied according to the advice. The designated AR staff member reviews the system application the following morning, makes corrections where necessary and forwards the completed payment to the appropriate Collections personnel Reference field is a common value between the Remittance advice and payment Idocs

4. EDI Structure BANK SAP PAYEXR IDOC with Remittance Advice information Payment IDOC Customer

5. EFT Scenarios

6. Payment Advice Payment Advice can be received from Customer Bank We can make changes to the Payment Advices to improve the hit ratio using the Payment Advice Change Transaction (FBE2) The changes to payment advice should be done, before the payments are applied automatically via EFT or Lockbox

7. Payment Advice Overview (S_ALR_87012203) 1) Use the S_ALR_87012203 report to get a overview of Payment Advices for a customer or for a particular company code, date and /or customer.

8. Payment Advice Overview (S_ALR_87012203) 2) Print the report every day for future reference and use this report to edit payment advices using Transaction FBE2. Payment Advice Number

9. Change Payment Advice (FBE2)

10. Change Payment Advice (FBE2) Double click on the Payment Advice Item to get the details

11. Change Payment Advice (FBE2) Click on the next item icon to display other line items You can

12. EFT – Bank posting Check #

13. Lockbox Payments The Accounts Receivable Department, on a daily basis, processes the nightly lockbox transmissions. Each day’s cash must be completely applied within 2 business days. This will insure that the monthly cash is applied prior to the close of the accounting period Lockbox payments are applied either Systematic – SAP identifies the payment to the customer account and applies it to specific items within that account Manual – AR staff applies a payment that was identified but not applied by SAP AR staff identifies and applies a payment not identified and applied by SAP

14. Systematic Identification SAP accepts nightly transmissions of check detail from four different paper lockboxes and one electronic (EFT) lockbox strategically located throughout the United States The transmitted data includes: The MICR number of the check Document numbers/amounts supplied by the customer

15. MICR Number The MICR number is programmatically compared to the MICR numbers on the customer master records within SAP MICR match is found: the payment is posted to the appropriate customer account as “ On account” if the system is unable to clear the payment against the referenced items “ Applied”,if the system is able to clear the payment against the referenced items, “ Part applied” if the system is able to clear some of the referenced items, but not all of them MICR match is not found: the system will try to match document numbers supplied on the remittance

16. Document Number The document numbers on the remittance are programmatically compared to document numbers on the customer line item displays located in SAP Document match is found: the payment is posted to the appropriate customer account as one of the following: “ On account” if the system is unable to clear the payment against the referenced items “ Applied” if the system is able to clear the payment against the referenced items “ Part applied” if the system is able to clear some of the referenced items, but not all Document match is not found: the payment is assigned an “unprocessed” status

17. Manual Cash Identification and/or Application If the system is unable to identify the customer by either the MICR number or the document number, the payment remains in the clearing account until manually identified by an AR representative. To manually identify or apply items posted on account by SAP, via the SAP system, transaction code ZLB1 is used. This brings up the “Post Processing Lockbox Data Screen”

18. Lockbox Post- Processing (ZLB1) Enter: 1) Destination 2) Origin: Bank # (Exhibit: Regional Remittance Addresses) 3) Lockbox: Corresponding Lockbox # (Exhibit: Regional Remittance Addresses) Enter leading zeros for a total of 7 characters, with the exception of Northern Trust, Lockbox EF1. Date: Date of the deposit being worked Batch#: Leave blank Check Status: 1 (All checks)

19. Lockbox Post-Processing (ZLB1) 1) Click Lbox Overview Icon– the screen will display all batches for that particular day’s deposit for the lockbox selected. Click on the Lockbox overview Icon

20. Lockbox Processing (ZLB1) 2) Select each batch containing the checks by clicking on it and select the batch by click once and on the details 3) The screen shows the total checks and the number of checks applied, Part. Applied, posted on account and Unprocessed

21. Lockbox Processing (ZLB1) 3) Select the Lockbox totals icon to display the Lockbox totals

22. Lockbox Data Overview (ZLB1) 3) Select the batch and click the Batch totals Icon for Batch totals

23. Lockbox Data Overview (ZLB1) 4) Click on Details button to see the check numbers and details

24. Lockbox Data Overview (ZLB1) 5) Click on Details button to see the check numbers and details

25. Lockbox Data Overview (ZLB1) 6) Financial document posted - Lockbox Total posted

26. Lockbox Data Overview (ZLB1)

27. Questions and Answers