Electronic Bank Statement-MT940 Format Configuration Process

Table of Contents
Electronic Bank statement Process Flow Chart ................................................................................................. 3
Electronic bank statement overview: .................................................................................................................. 3
Configuring the Electronic Bank Statement ........................................................................................................ 4
Create House Bank ......................................................................................................................................... 4
Electronic Bank Statement .............................................................................................................................. 5
Make Global Settings for Electronic Bank Statement ................................................................................................... 5
1. Create account symbols ........................................................................................................................................ 6
2. Assign accounts to account symbols ..................................................................................................................... 7
4. Create keys for posting rules ................................................................................................................................. 7
5. Define posting rules ............................................................................................................................................. 10
6. Create transaction types ...................................................................................................................................... 12
7. Assign external transaction codes to posting rules .............................................................................................. 12
8. Assign bank accounts to transaction types .......................................................................................................... 13
Import Electronic Bank Statement ................................................................................................................ 14
Details of description (MT942 Format) .......................................................................................................... 14
Uploading Bank Statement into SAP ............................................................................................................ 15
To view cleared documents .......................................................................................................................... 17
Checking of bank Statement (Transaction Code: - FF67) ............................................................................ 18
Double click on required statement to view the transaction details .............................................................. 19



Electronic Bank statement Process Flow Chart

Electronic bank statement overview:
1. It is an electronic document sent by the bank which gives details of the transactions done by the account holder.
2. The electronic document can be remitted by the bank in the following formats SWIFT, Multicash, BAI etc.
3. This statement is used in SAP to do an automatic reconciliation.
4. The statement is uploaded in SAP and it clears the various Bank clearing accounts such as the Check out, Check in account to the main bank account.
In our scenario we have the following bank GL codes (Sub accounts) for our Bank:-
330 SBT Bank – Main account a/c
332 SBT Check Issued Out
331 SBT Check Received
Checks issued out to vendors will be credited to GL code 332 SBT Check Issued Out which is a clearing account.
Similarly Checks Received from customer is debited to GL code 331 SBT Check Received which is a clearing account.

When the bank statement is uploaded in SAP the following will happen:-
For checks issued out – based on checks cleared in the bank account the following entry will be passed automatically.
GL code account description Debit /Credit
332 SBT Check Issued out Debit
330 SBT Bank – Main account a/c Credit
For Checks Received in – based on checks cleared in the bank account the following entry will be passed automatically.
GL code account description Debit /Credit
331 SBT Check Received Credit
330 SBT Bank – Main account a/c Debit
Thus after uploading the bank statement in the system, the Main bank account i.e. GL code 330 SBT Bank – Main account a/c will exactly match with the balance shown in the bank. All the clearing accounts having balances will be the reconciliation items.
Manual bank statement – In case the bank is not able to give an electronic statement then the statement can be manually entered in the manual bank statement and uploaded.

Configuring the Electronic Bank Statement
Create House Bank
Transaction Code FI12
In the SAP system, you use the bank ID and the account ID to specify bank details. These specifications are used, for example, for automatic payment transactions to determine the bank details for payment.

Define your house banks and the corresponding accounts in the system under a bank ID or an account ID.

Electronic Bank Statement

In the following activities you make all the settings necessary for electronic bank statements.
Make Global Settings for Electronic Bank Statement

IMG > FINANCIAL ACCOUNTING > BANK ACCOUNTING > BUSINESS TRANSACTION > PAYMENT TRANSACTION > ELECTRONIC BANK STATEMENT

In this activity you make the global settings for the account statement. There are four main steps to be carried out:
1. Create account symbol
Specify G/L accounts (such as bank, cash receipt, outgoing checks) to which postings are to be made from account statement.You assign account symbols to the G/L account numbers. These are required for the posting rules in step 2.
2. Assign accounts to account symbols
Define postings to be triggered by possible transactions in the account statement (such as bank transfer, debit memo).
In the posting specifications debit -> credit that you define here, use the account symbols from step 1, not the G/L account numbers. This prevents similar posting rules being defined several times, the only difference between them being the accounts to which postings are made.
3 Create keys for posting rules
Assign posting rules to possible transactions in account statement file. A list of assignments where one external transaction code is assigned to one posting rule is called a transaction type.
4 Create a transaction type
Assign bank details, for which the account statements are to be imported, to a transaction type. All the house bank accounts at a particular bank are usually assigned to the same transaction type.

1. Create account symbols
In this activity you create the account symbols that you later need for defining the posting specifications.
Before the posting rule is used, the account symbols are replaced with the relevant accounts to which posting is to be made.
Define an ID for each account symbol & enter a description in the text field.

Create the account symbols BANK and CASH RECEIPT so that you can later define a posting rule for cash receipt.

2. Assign accounts to account symbols
In this activity you define the account determination procedure for each individual account symbol.
Define postings to be triggered by possible transactions in the account statement (such as bank transfer, debit memo). In the posting specifications debit -> credit that you define here, use the account symbols from step 1, not the G/L account numbers. This prevents similar posting rules being defined several times, the only difference between them being the accounts to which postings are made.
3. Define G/L Accounts to Account Symbols

MATERIAL LEDGER ACCOUNTING

Material Ledger

Material Ledger is nothing just do a reconciliation between MM transaction and FI transaction ( GL Account).

We have to check the both material price either moving average price or standard price and same need to cross match with FI GL Accounts.

For material value we have to use table - MBEW and for FI we have to use the T.code - FAGLL03 where common in fiscal year and period and on base of same we can reconcile.

Table - MBEW
T.code - Mc.9
AC530
Tcode - CKMHELP, CKMVFM
Reco with T.code - ACDOCA ( For S4 HANA)

How to create query report with SQ01, SQ02, SQ03

SAP Accounting Entries

SAP Accounting Entries

1 All the Inventory transactions will look for the valuation class and the corresponding G.L. Accounts and post the values in the G.L accounts.

For Example: during Goods Receipt
Stock Account                                   Dr
G/R I/R Account                                Cr
Freight clearing account                   Cr
Other expenses payable                   Cr

During Invoice Verification
G/R I/R Account                                  Dr
Vendor                                                 Cr

2 When the Goods are issued to the Production Order the following transactions takes place:

Consumption of Raw Materials       Dr
Stock A/c                                       Cr

3 When the Goods are received from the Production Order the following transactions takes place:

Inventory A/c                                                Dr
Cost of Goods Produced                           Cr                   
Price difference                                          Dr/Cr

(Depending on the difference between standard cost and actual cost)

Get more information on SAP Fico Forums

4 When the Goods are dispatched to customer through delivery the following transactions takes place:

Cost of Goods Sold                            Dr
Inventory A/c                                      Cr

5 When the Goods are issued to a Cost Center or charged off against expenses the following transactions takes place:

Repairs and Maintenance    Dr
Inventory A/c                       Cr

6 When the Goods are stock transferred from one plant  to another, the following transactions takes place:

Stock A/c                                              Dr (Receiving location)
Stock A/c                                              Cr (Sending location)
Price difference                                  Dr/Cr 

(Due to any difference between the standard costs between the two locations)

7 When the stocks are revalued, the following transactions takes place:

Stock A/c                                           Dr/Cr      
Inventory Revaluation A/c              Cr / Dr

When the Work in Progress is calculated the following transaction takes place:

Work in Progress A/c                    Dr
Change WIP A/c                            Cr

8 Physical verification /shortages and excesses:  Shortages/excesses on authorizations shall be adjusted using the physical inventory count transaction. 

9 Invoice Generation

Invoices will be generated at the Smelters and stock points. The accounting entries for the sale of goods dispatched will flow from the Sales invoice generated in SAP Sales and Distribution module. The following entries shall be passed

Customer Account                                                       Dr
Revenue                                                                      Cr
Excise Duty Payable                                                  Cr
Sales Tax Payable (local or central)                         Cr      

Note: As mentioned above in the FI document, which is created in the background, the SD invoice number shall be captured. However as per the current accounting procedure the accounting entry passed is as follows:-

Customer Account                                                                 Dr
Revenue                                                                     Cr
Excise Duty Billed                                                                  Cr
Sales Tax Payable (local or central)                         Cr

Excise duty paid a/c                                                                 Dr
Excise duty payable a/c                                                           Cr 

Learn Fico Transaction Tutorials

Export Sales

10 There have been very few export transactions in the past. SAP system will be designed to handle export business. Exports are mainly from the mines and will be handled at the mines; however the documentation part will be taken care at the Head Office. The accounting entry is:

Customer Account                                                                 Dr
Revenue (Exports)                                                                Cr 

11 The realization of export sales will be directly credited to the bank.  The accounting entries will be as follow:

Bank                                         DR
Customer                                 CR
Exchange Fluctuation           DR/ CR

12 The accounting entries will be:

Rebates/Discounts                          Dr
Customer                               Cr                                    

Debit Memos

13 Debit Memos shall be issued in case of price difference, sale tax difference and interest on usance period and overdue payments.

14 The accounting entries for two possible scenarios are as follows:

Price Undercharged:

Customer Account                 Dr.
Revenue                                  Cr.
Sales tax payable                   Cr.

Sales tax undercharged

Customer Account                 Dr.
Sales tax adjustment             Cr.

Interest on delayed payments/usance period and other charges

Customer Account                 Dr.
Interest Others                        Cr.

Find more information on SAP Fico Courses and institutes

15 In case of HZL  a complete retirement or a partial retirement of asset is done. The system uses the asset retirement date to determine the amount to be charged off for each depreciation area. The existing accounting policy is to provide depreciation for the full quarter in which the asset is sold/discarded, recommended that the depreciation be provided from the date of acquisition on prorata basis.

16 Accounting entry for sale  of Asset to customers:

Customer Account                                       DR
Asset Sale                                                     CR
Accumulated Depreciation                          DR
Loss on Sale (if applicable)                       DR
Asset Sale account                                     DR
Asset account                                               CR
Profit on sale (if applicable)                      CR

Note: In case of any Sales Tax /Excise duty applicable for this transaction, SAP will calculate the Sales Tax/Excise Duty based on the Tax Code selected the entry is posted to the GL Account (Sales Tax Payable)

17 Accounting entry for sale without a customer:

Accumulated Depreciation                       DR
Loss on Sale (if applicable)                       DR
Asset Sale account                                     DR
Asset account                                               CR
Profit on sale (if applicable)                       CR

18 Accounting entry for scrap

Accumulated Depreciation                       DR
Loss on Sale of Assets                            DR
Asset account                                            CR

Sale of Scrap

19 The sale of scrap (non-stock) shall be mapped as a direct manual FI entry. The customer will be created as a FI customer. No Logistics module will be involved in the process.

20 A FI Invoice will be prepared for the sale of scrap with the following entries:

Customer                                                Dr
Sale of Scrap                                          Cr
Excise Duty Payable                             Cr

Advances from Customers

21 Advances are received from the customers against delivery. These advances will be recorded in a special general ledger account. The accounting entry for the same will be:

Bank Account                                                           Dr
Advance Customer Payments                                 Cr

These advances will be later on adjusted against the invoices raised on the customers. Advances can be adjusted against more than one invoice at the time of clearing of the invoices against advances.

Read more on SAP Abap Tutorials

22 Adjustment of Advances

Customer Account                                                   Cr
Advance Customer Payments                               Dr

A financial document would be created for each Bank Guarantee received and this document number will be referred to in the Sales Order which would then monitor the value and the validity of the of the Bank Guarantee instrument wise while doing the billing.
The letter of credit /Bank guarantee given will be recorded as a noted item.

23 Accounting Entry for Goods receipt

Stock/Inventory account                                        Dr
GR/IR account                                                       Cr
Freight clearing account                                        Cr

24 Accounting Entry on invoice verification of supplier

GR/IR                                                                     Dr
Vendor account                                                      Cr

25 Accounting Entry on invoice verification of freight vendor

Freight clearing account                                        Dr
Freight Vendor account                                         Cr

Goods Receipt

26 Based on the Purchase order and the Quantity actually received Goods Receipts (GR) will be done. Based on the GR done the following accounting entry will be passed in the Financial Accounts

RM/PM Stock Account                                DR
GR/IR Account                                             CR
Freight Clearing Account                           CR

Excise Invoice Verification

27 On receipt of the excise invoice cum gate pass the following entry will be passed

RG 23 A / RG 23 C Part 2 Account           DR
Cenvat Clearing Account                           CR

Vendor Invoice Verification

28 The detail process related to invoice verification is documented in Materials Management Document.
On receipt of vendor bill the following entry will be passed

GR/IR Account                                             DR
Freight Clearing Account                           DR
Cenvat Clearing Account                           DR
Vendor Account                                           CR

29 Invoice Verification for Foreign Vendor
On receipt of vendor bill the following entry will be passed:

GR/IR Account                                                         DR
Vendor Account                                                       CR

30 Invoice Verification for Custom vendor
On receipt of Vendor bill the following entry will be passed:

Get more ideas on SAP BASIS

1) RG 23A/RG 23C Part 2 A/c (CVD) A/c                 DR
Cenvat Clearing A/c                                                    CR

2) G/R I/R A/c                                                    DR
Cenvat Clearing A/c                                          DR
Vendor A/c                                                  CR

3) Cost of Material A/c                                DR
Vendor A/c (Customs)                                 CR

31 Invoice Verification for Freight / Clearing Agent

Cost of Material A/c                                     DR
Vendor A/c (Clearing Agent)                     CR

32 Invoice Verification for Octroi Expenses

Cost of Material                                            DR
Vendor A/c (Octroi)                                      CR

33 TDS (Work Contract Tax) for Service Orders shall be calculated and deducted accordingly. The detail of TDS has been discussed in separate chapter.
The following entry will be passed on bill passing

Expenses Account                          DR
Vendor Account                               CR
TDS Account                                    CR

34 The material shall be returned to the vendor using the

1- Return to vendor movement type in SAP
2- Creating a Return PO 

These transactions will be processed in the MM module.
The accounting entries will be :

Returns after GRN
GR/IR A/c                              Dr
Stock A/c                               Cr

The accounting in respect of debit / credit memos for FI vendors, the process will be similar to that of invoice processing.  The accounting entries will be:
On issue of debit note

Vendor Account                               DR
Expenses Account                          CR

Study more about SAP HANA

35 In respect of import vendor - capital goods exchange differences are to be accounted manually through a Journal Voucher for capitalization. Exchange rate differences will be accounted at HO. An example of the accounting entry in this case shall be:
Invoice entry @ 40 INR: 1 USD

Asset / Expense A/c                          DR                 100   
Vendor A/c                                        CR                  100    

Payment Entry @ 41 INR: 1 USD

Vendor A/c                                        DR                  100   
Bank A/c                                           CR                  110               
Exchange rate loss Capital A/c     DR                    10     

Asset A/c                                        DR                  10
Exchange rate loss Capital A/c     CR                  10

36 A new G/L account shall be created for the special G/L transactions.

The accounting entry for making the down payment shall be:

Advance to supplier  account                                Debit
Bank A/c                                                                 Credit

When the invoice is booked the following entry is passed

GR/IR account                                                         Debit             
Vendor account                                                       Credit            

Clearing of Invoice against Down Payment

Vendor A/c                                                             Debit             
Vendor down payment account                            Credit           

Wherever, TDS is applicable, the TDS will be deducted at the time of down-payment to the vendor.

Down Payment for Capital (tangible) Assets

37 Down payment to vendors for capital acquisitions is to be reported separately in the Balance Sheet under the head Capital Work in Progress. Hence down payment for capital goods would be tracked through a separate special general ledger indicator.

38 The procedure to be followed is:

1- Definition of alternative reconciliation accounts for Accounts Payable for posting down payments made for Capital assets
2- Clearing the down payment in Accounts Payable with the closing invoice.

A new G/L account shall be created for the special G/L transactions.

The accounting entry for making the down payment shall be:

Vendor Advance for Capital Goods Account      Debit 
Bank A/c                                                               Credit            

When the invoice is booked the following entry is passed

Asset A/c /  Asset WIP                                             Debit             
Vendor A/c                                                                Credit            

Clearing of Invoice against Down Payment

Vendor A/c                                                            Debit             
Vendor Advance for Capital Goods Account      Credit

39 The Following are the TDS Rates (to be confirmed with the recent changes)

Particulars	Tax Rate	Surcharge Rate	Total
Contractors – 194 C	2%	5%	2.10%
Advertising – 194 C	1%	5%	1.05%
Prof. Fees – 194 J	5%	5%	5.25%
Rent – Others – 194 I	15%	5%	15.75%
Rent – Company – 194 I	20%	5%	21%
Commission – 194H	5%	5%	5.25%
Interest  - Others – 194 A	10%	5%	10.50%
Interest – Company – 194 A	20%	5%	21%
Special Concessional Tax
Works Contract Tax

Security Deposits /Earnest Money Deposit Received from  Vendors

Bank A/c                                                      DR
Security Deposit Vendor                             CR

EMD to give the age so as to enable the same to be transferred to unclaimed EMD account.

Payment OF TOUR Advance Domestic tours

40 Employee Advances will be paid by the Accounts Department unit wise based on the requisition or recommendation of the respective departmental head.

Employee Travel Advance A/c                  DR
Cash / Bank Account                                  CR

Settlement of Tour Advances Domestic/Foreign

41 Settlement of advance will be done by the Accounts Department based on the Travel Expense Statement submitted by the employee, which is approved by the Concerned Department Head.

Expenses  Account                                               DR
Cash/Bank  Account                                        DR  (if, refund)
Employee Advance Account                           CR
Cash/Bank Sub ledger Account               CR  (if, payable)

2 Banking Operations

Maintenance of Bank Master   

2.1 A House Bank is a combination of a Bank and a Branch. Account id is the account number. A house bank can have multiple account IDs.. There could be a main account as also payable account, which will be defined as separate account ids. General Ledger accounts have to be created for each combination of a house bank and account ID. The bank master details are to be provided by HZL.

2.2 General Ledger accounts have to be created for each account ID in the house bank. Bank Account Master data will be maintained by the Finance Department centrally.

2.3 Each house bank and account ID combination shall have one main general ledger account and several sub accounts mainly based on broad transaction types. These sub accounts are necessary to facilitate automatic bank reconciliation process in R/3 system.

Bank Accounting

2.4 The accounting entries will be generated automatically according to the posting rules attached to the Transaction type. The following accounting entry is passed by the system in respect of cheque deposit on account of collection from domestic customers.

Bank cheque deposit account                  Debit
Customer account                                    Credit

2.5 In this case, a bank sub account is selected based on the transaction code entered by the user. The customer account is cleared i.e. invoice is cleared against the receipt. In respect of any other deposits, the relevant accounts to be credited will depend on the nature of transaction.

2.6 Payment against bills for collection. Based on the bank advices falling due on a particular day one payment advice is made debiting the vendors and crediting bank.

Cheque Deposit- Customer Receipts

2.7 All cheques received from customers shall be accounted at the point of receipt           
The entry posted shall be

Bank  Sub account   Dr    
Customer Account   Cr

Cheque  Deposit – Other Than Customer Receipts

2.8 All  other receipts will be accounted through the Incoming Payment Transaction of the Accounts Receivables module.

Cheque Bouncing – Other Than Customer Receipts

2.9 Based on the information of cheque bounced from the Bank, the accounts Department will pass accounting entries for the cheque that have been bounced. The procedure to handle bouncing of a cheque has been discussed under the following

2.10 Reset the clearing document – If the document has been cleared i.e. an    open outstanding item has been cleared against an incoming receipt, then the clearing document has to be reset to its original status of open item. This process is known as reset of cleared document.

2.11 Reverse the entry passed for cheque deposited earlier – Once the document has been reset it will be reversed. The following accounting entry will be passed.

FI Customer                                              DR
Bank cheque deposit account                  CR

2.12 In case of cheques being damaged while printing, the concerned cheques no. has to be voided and the payment will be rerun.

Bank Reconciliation

2.13 The Bank reconciliation process is based on the entries passed through the Bank sub account and main account. The process is dependent on the Bank Statement received from the Bank that will be entered into SAP . Accounting rules are to be defined for each transaction type and posting rule for posting accounting entries as per bank statement.  Bank statements to be uploaded into SAP.

2.14 Bank Main account balance is the actual balance as per the bank statement whereas the Bank sub accounts denote the reconciliation items. These sub accounts show those entries, which will flow from the sub account which are not cleared in the bank statement.

2.15 Adding or subtracting the Bank sub accounts will help in preparing the Bank reconciliation statement.

2.16 The following scenarios would explain the reconciliation process:

1- Cheque received from customer
2- Cheque issued to vendors
3- Cheque received from Other than Customers
4- Direct Debits in Bank Statement
5- Direct Credits in Bank Statement
6- Fund Transfer between Bank Accounts

Cheque Received from Customer

2.17 Accounting entry at the time of cheque deposit entry

Bank Cheque deposit account                 Debit
Customer                                                  Credit

2.18 Accounting entry after cheque has been cleared in the Bank statement

Main Bank account                                  Debit
Bank Cheque deposit account                 Credit

2.19 The clearing criteria for updating the bank main account and bank sub account will be amount and document  number which will be captured in the allocation field of the bank sub account. The items, which have not been cleared in the bank statement, will remain open in the bank sub account and will form part of the bank reconciliation statement.

Cheque Issued to Vendors

2.20 Accounting entry at the time of cheque issue

Vendor account                                          Debit
Bank cheque payment account                Credit

2.21 Accounting entry after cheque has been presented in the Bank

Bank cheque payment account                Debit
Main Bank account                                  Credit

2.22 The clearing criteria used for updating vendor account and Bank cheque payment account will be amount and cheque number. The cheques presented to the bank and are cleared are transferred to the bank main account. The remaining cheque issued will form part of the bank reconciliation statement.

Direct Debit in Bank

2.23 Direct debit instructions will be given to the bank for example, LC payments or certain bank charges are directly debited in the Bank Statement. In this case accounting entry is passed only after the entry is passed in the bank statement.

Vendor / Expense Account             Debit
Bank clearing account                    Credit

Direct Credit in Bank

2.24 Customer receipts are sometimes directly credited in Bank. E.g. export receipts. In this scenario accounting entry is passed only at the time of bank statement entry.

The following accounting entry is passed

Bank clearing account                                Debit
Customer account                                       Credit
Main Bank A/c                                              Debit
Bank Clearing A/c                                       Credit

Bank Fixed Deposits

2.25 HZL has a practice of converting any amount above Rs. 1 crore in its Main bank account, to a fixed deposit subject to a minimum of Rs. 1.01 crores. The FDR number can be filled in one of the fields available in the accounting document.

Cheque Management/ Cheque Printing cum Advice

2.26 The function of cheque management will enable printing of cheque through SAP. Cheque series will be defined for a combination of a Company code and Bank Account. Cheque numbering will be sequential order.

2.27 Cheque series for automatic payment has to be in sequential order. Cheque printing facility will be available for the bank account.

Cash Management/Liquidity Analysis

2.28 The day-to-day treasury process in a company includes a number of transactions. This includes determining the current liquidity using bank account balances (cash position), determining open receivables and liabilities (liquidity forecast), manually entering planned cash flows (payment advice notes), through to clearing bank accounts, that is, collecting multiple bank account balances on one target account.

2.29 The main objective is to ensure liquidity for all due payment obligations. It is also important to control and monitor effectively the incoming and outgoing cash flows.

2.30 This section shows you the overall liquidity status of your company by displaying together the cash position and the liquidity forecast.

The cash position is used in Cash Management to show the value-date-dependent bank accounts and bank clearing accounts, as well as the planned cash flows (payment advice notes). The liquidity forecast comprises the incoming and outgoing cash flows, as well as the planned items on the sub-ledger accounts.

Read more about SAP Fico --  ERPBUG.BLOGSPOT.COM