Unit 2: Banking Process Contents: Outgoing and incoming payments. Payment means (cash, check, credit cards, bank transfer, BOE, payment wizard). Deposits

Unit 2: Banking Process

Contents: Outgoing and incoming payments. Payment means (cash, check, credit cards, bank transfer, BOE, payment wizard). Deposits. Clearing an account - by payments and deposits. Bank statement handling and external reconciliations.

Banking Process: Unit Objectives

After completing this unit, you will be able to: List the basic steps in the banking process in a typical small business Explain the consequences of each step on the involved G/L accounts Perform the banking process steps in SAP Business One Choose the appropriate option of bank statement handling according to the customer

needs and localization. Perform the steps of bank statement handling and external reconciliations in SAP

Business One.

Banking Process: Course Overview Diagram

Banking Process

Topic 1: Handling Payments

Topic 2: Managing External Reconciliations in the Bank Account

Banking Process: Business Example

You are implementing SAP Business One at a new customer, OEC Computers. Your main contact in the customer site is Maria the accountant. You ask Maria about the way they handle payments and bank statement. You then make a quick needs analysis and explain to Maria how SAP Business One

can help her in handling and tracking the banking process in everyday work.

Handling Payments

Banking Process



Handling Payments: Topic Purpose

After completing this topic, you will be able to: List the steps of the payment process and perform them in SAP Business One

including: Incoming Payments, Outgoing Payments, Deposits and the Payment Wizard

Explain the consequences of each step on the involved G/L accounts. Adjust the appropriate payment scenario to the customer needs and localization. You

need to make decisions together with the client accountant.

Handling Incoming Payments: Business Example (1)

The customers pay their debts, that is open A/R Invoices, according to agreed payment terms: Cash Basic, Installments, Net 30, etc.

Maria, the accountant at OEC Computers, deals with Incoming Payments every afternoon: When registering an Incoming Payment you first choose the customer and then

you choose the A/R Invoices the customer pays. Lastly, you record the payment means.

During the day OEC Computers employees created Incoming Payments for customers who shopped in the store point of sale or called the customer service center. So Maria needs to register the remaining Incoming payments and monitor the ones that were registered during the day.


Maria enters Incoming Payments for checks received by mail. She checks the credit card accounts (Visa and Master Card) to see the amount of

credit card Incoming Payments issued in the store point of sale and in the customer service center during the day.

She checks the Cash on Hand account to see the amount of cash Incoming Payments issued in the store point of sale.

And she connects the company bank account on-line: To see the amount of bank transfer Incoming Payments received from customers. To make sure that Visa and Master Card transferred the credit card payments

according to the agreement with OEC Computers.


At the end of the day: Maria enters a Credit Card Deposit in SAP Business One to record the payments

Visa and Master Card transferred to the company bank account. Then, she goes to the ATM located just across the street and deposits:

– The money accumulated in the cash register. – The checks received today.

She issues Check Deposit and Cash Deposit in SAP Business One based on the ATM reference.

Now, Maria can go home.

A customer pays with check. You deposit the check 2 days later.

When is the customer account being credited in SAP Business One? When the incoming payment is entered. When the check is deposited in the bank.

Reflection Question:

A/R Invoice Incoming Payment Deposit

Reflection Question:Answer

A/R Invoice Incoming Payment

Debit Credit

Customer 105

Income account

105

Debit Credit

Check clearing account

105

Customer 105

Debit Credit


105

Bank account 105

Deposit

The customer is not involved in the Deposit

Journal Entry.

A customer pays with check. You deposit the check 2 days later.

When is the customer account being credited in SAP Business One? When the incoming payment is entered. When the check is deposited in the bank.

The Payment Process in SAP Business One – Sales

Debit Credit

Clearing Account:Check/ Credit card/

Cash105

Customer 105

Incoming Payment: Payment Means Bank transfer

Incoming Payment DepositClearing Account

Bank Account

Debit Credit

Clearing Account :Check/ Credit card/

Cash105

Bank Account 105

Incoming Payment Bank Account

Debit Credit

Bank Account 105

Customer 105

A/R Invoice

A/R Invoice

Incoming Payment: Payment Means Check Credit card Cash

Structure of a Payment Document

Incoming / Outgoing Payments

Open Invoices, Credit Memos, and Journal EntriesOpen Invoices, Credit Memos, and Journal Entries

Payment Document HeaderPayment Document Header

Totals, RemarksTotals, Remarks

Cancel Add in SequenceAdd Select AllDeselect All

The Payment Document Header


Cancel Add in Sequence

Code

Name

Pay to

Contact Person

No. (from Series or Manual)

Posting Date

Due Date

Document Date

Vendor master record

Customer master record

Project

Reference

Transaction No.

Add Select AllDeselect All

How To Determine the Payment Amount


Add Cancel Add in Sequence

Payment on Account

Display Invoices with Matching Billing Address

25

205

Open Balance 25

Total Amount Due

98RC9898*1 of 1204

JE

CN

IN

IN

Doc.Type

2525251 of 1303

-50-50-501 of 1202

982%1001002 of 2101

180180200*1 of 2

Total Payment

Dis-count

Balance Due

Total*Installm.Doc.

Payment Document HeaderPayment Document Header

Sel.

101

How To Specify the Payment Means

1.Determine the Payment Amount

2.Split the Payment Amount According to Payment Means

Possible Payment Means: Check Bank Transfer Credit Card Cash

Deposits of Cash and Checks

Cash on Hand

1 2

Bank

2

Cash Deposit

Checks Rec.

1 2

Bank

2

Deposit of Checks

CustomerCustomer

1OI

Open Invoice

Incoming PaymentPayment Means Cash

CustomerCustomer

1OI

Open Invoice

Incoming PaymentPayment Means Check

Handling Outgoing Payments: Business Example

OEC Computers pays open vendor A/P Invoices, according to agreed payment terms: Cash Basic, Installments, Net 30, etc.

Maria, the accountant at OEC Computers, deals with outgoing payments every morning: She runs the Vendor Liabilities Aging report and enters today's date in the Due Date

To field to display the open A/P Invoices to be paid today. She then enters Outgoing Payments to those vendors.

OEC Computers pays using Bank Transfer or Checks according to agreement they have with each vendor. Maria issues Outgoing Payments with Checks as Payment Means. She then prints

the checks that are created automatically and sends them via mail. She connects to the bank account and transmits Bank Transfers to the vendors

online. She then issues Outgoing Payments in SAP Business One with Bank Transfer as

Payment Means to document those online Bank Transfers.

The Payment Process in SAP Business One – Purchasing

Outgoing PaymentBank Account/ Cash account

Outgoing Payment: Payment Means Check Credit Card Cash Bank Transfer

Debit Credit

Bank Account 202

Vendor 202

A/P Invoice

Exercise – Incoming Payments and Deposits

House Bank Account

The Payment Process in SAP Business One – Bank Account Reconciliation

Deposit

Deposit

Outgoing Payment

Deposit

Outgoing Payment

Bank Transfer

3 options for external reconciliation:

You can create payment documents while you reconcile

the bank statement with the bank G/L account in SAP

Business One.

3 options for external reconciliation:

You can create payment documents while you reconcile

the bank statement with the bank G/L account in SAP

Business One.

Bank Statement

Outgoing Payment

The Payment Process in SAP Business One – Business Partner

A/R Invoice Incoming Payment

Debit Credit

Customer 105

Income account 105

Debit Credit


105

Customer 105

Outgoing Payment

Debit Credit

Bank Account 202

Vendor 202

A/P Invoice

Debit Credit

Vendor 202

Expense / Clearing account

202

Internal Reconciliation

Internal Reconciliation

The Payment Process in SAP Business One – Payment Wizard

Incoming Payments: Bank Transfer

Bank Account

Payment Wizard

Outgoing Payments: Bank Transfer Checks

The Payment Wizard (1)

Selection Criteria

Execute

Save

Lo

ad

Saved Payment

Runs

Recommendations

Document Parameters

Business PartnersSelection Criteria

General Parameters

Payment Run Sel.

Payment Method – Selection Criteria

The Payment Wizard (2)

00000150900 12131400 67291500 11

Deutsche Bank

To

The printed text must not be modified or crossed out.Acc. No.X X X X

€ - 400,-- Four*Hundred -

Check Printing

Payment File

■ Report Printing

■ Document Printing

Bank TransferChecks

Payment documents

$

© SAP 2007 / Page 25

Document Parameters

Business PartnersSelection Criteria

General Parameters

Selection Criteria

Payment Run Sel.

Payment Method – Selection Criteria

Recommendations

Payment Methods as Main Control Instrument

Validation Options

Outgoing

Incoming

Type Payment Means

House Bank and Account

AP Invoice

Definition

G/L Account

Payment Method

Business Partner

0000015090012131400 67291500 11

Deutsche Bank

To

The printed text must not be modified or crossed out.Acc. No.X X X X

€ - 400,-

- Four*Hundred -

Exercise – Payment Wizard (Optional)

Managing External Reconciliations in the Bank Account

Banking Process



Managing External Reconciliations in the Bank Account: Topic Purpose

After completing this topic, you will be able to: Explain the options for Reconciling externally a bank G/L account. Choose the appropriate option of bank statement handling according to the customer

needs and localization. You need to make decisions together with the client accountant.

Perform the steps of bank statement handling and external reconciliations in SAP Business One.

Managing External Reconciliations in the Bank Account: Business Example

Maria, the accountant at OEC Computers, has just received by mail a printed Bank Statement from the bank.

Maria asks you what is the most effective way for her to enter this Bank Statement in SAP Business One.

And how to reconcile the transactions the bank recorded for OEC Computers, with the transaction she recorded for the bank G/L account in SAP Business One.

You should take into consideration that OEC Computers pays and is paid using all payment means (check and cash deposits, checks for payments as well as bank transfer).

External Reconciliations

External Bank Statement

20003000

External Reconciliation

House Bank Account

Debit Credit

2000

3000

External statement transactions

Options for External Reconciliation

External Bank Statement

Printed statement ending balance

Manual Automatic Semi-Automatic

Open transactions in G/L account


Bank Statement* Available for several localizations

* Reconciles the G/L account and at the same time posts bank transfer payments.

* ANZ, Canada, South Africa, UK & USA

* Option to deposit cash, check and credit card payments and post journal entries, or create payments.

* All Localizations

* Option to post journal entries.

* Austria, Belgium, Brazil, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Irish Republic, Italy, Japan, Korea, Netherlands, Norway, Poland, Russia, Singapore, Slovakia, Spain, Sweden, Switzerland, and United Kingdom

* Austria, Belgium, Brazil, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Irish Republic, Italy, Japan, Korea, Netherlands, Norway, Poland, Russia, Singapore, Slovakia, Spain, Sweden, Switzerland, and United Kingdom

Manual

Reconciliation

Reconciliation

Bank Statement

Processing

Bank Statement

Processing

House Bank Account

Bank Statement Processing – BSP

Bank Statement Processing automates the handling of bank statement transactions. It is designed for businesses that intensively use direct Bank Transfer for Outgoing and Incoming

Payments.

Bank Statement

Bank Statement

Processing

Bank Statement

Processing

The key to the BSP functionality:Question

The highlighted row is one row out of many imported automatically from the bank. It represents bank transfer payment.

The non highlighted rows below represent existing invoices in SAP Business One How does SAP Business One “know “which documents to apply to which payment?

The key to the BSP functionality

The key to the BSP functionality is the setup: To use bank statement processing you must define the correct system settings

for ensuring that automation occurs as required. The settings you specify should complement the way the company works with

bank statements and payment processing. If you follow the setup guidelines, then the functionality should greatly improve

and speed up the flow of tasks associated with bank statement processing. It is important to emphasize that the efficiency of the bank statement processing

is directly related to the accuracy of the system settings as relevant to the business

The BSP from the Customer Point of View

Bank Statement

Import/ manually enter bank statement

edit existing (draft) bank statement

View finalized bank statements

Perform internal andexternal

reconciliations

The end user:

SAP Business One:

Bank Statement

Demo – Options for External Reconciliation

From the following slides, choose the option/s that suits your localization


Records are automatically created

Demo - Manual Reconciliation (1)

External Bank Statement House Bank Account

Process External Bank

Statement

Manual Reconciliation





Demo - Manual Reconciliation (2)

Records are automatically created


Process External Bank

Statement





Demo – Reconciliation (1)

Manual Automatic

Semi-Automatic


ReconciliationReconciliation



Process External Bank Statement

transactions

Demo – Reconciliation (2)

Manual Automatic

Semi-Automatic



Process External Bank Statement

transactions

ReconciliationReconciliation


Process External Bank Statement transactions

Demo – Bank Statement Processing (BSP)

Bank Statement

Bank Statement

Processing

Bank Statement

Processing

Exercise – Options for External Reconciliation

Choose the option/s that suits your localization.

Review Question

Which option would you recommend Maria to use? And what if OEC Computers were located in Germany/ UK/ your localization?

Banking: Unit Summary

Main Terms: Incoming Payments. Outgoing payments. Deposits. Invoice is due (*). Payment on Account. Partial Payment. Payment Means Payment Method Clearing Account. Payment Wizard. External Reconciliation – 3 options:

Manual Reconciliation Reconciliation Bank Statement Processing (BSP)

Documents

Unit 2: Banking Process Contents: Outgoing and incoming payments. Payment means (cash, check, credit cards, bank transfer, BOE, payment wizard). Deposits