Functionality of the Electronic Bank Statement

1.      There are different programs to upload electronic bank statement. FF.5 or FF_5.

2.      In case, if you are using Multicash format. You need to have three files in FF.5 and two files in FF_5

3.      You can prepare a Z program in order to truncate the electronic bank statement into two or three part files and save them on the application server.

a.      Take all the external codes list from bank.

b.      Take any available documentation from the Bank describing the relevance of the external codes.

c.       Make sure that your Chart of Accounts (Bank Accounts) last digits logic is appropriate to meet the requirements.

d.      Based on this decide the Account Symbols that are required to be created.

e.      Make sure that the masking rules are configured properly.

f.       Decide the posting rules that needs to be created.

g.      Link up your external symbols provided by the bank with Posting rules and give proper algorithms for posting and clearing logic.

h.      Concentrate on the posting areas to be posted while uploading the bank statement.

 

Further explanation would help you to understand the functionality when uploaded the electronic bank statement.

 

1.      Main purpose of uploading the bank statement into SAP is to make your Bank Main Account and physical bank statement balance in sync.

2.      You do not have any traditional Bank Reconciliation Statement (BRS) report in SAP.

3.       In SAP normally you maintain bank main account and bank sub account.

4.      Whenever you make a payment through F-53 or F-58 or F110, the entry would be:

Vendor Account Dr

To Bank Sub Account

5.      The ending digits of the sub-account would be important in configuring the masking rule. Based on this masking rule when you upload the bank statement the entry the system would pass the below journal entry:

Bank Sub Account Dr

To Bank Main Account

6.      It depends on the configuration, either the sub account will be cleared by the system automatically or you need to run F.13 to clear the sub accounts.

7.      At the time of receipts, you have different accounting entries unlike payments.

8.      It needs to post to two posting areas.

a.      GL Accounting

b.      Sub-Ledger Accounting

9.      The entries would system itself pass is:

Bank Main Account Dr

To Bank Sub Account

 

Bank Sub Account Dr

To Customer account.

 

10.   Clearing logic mentioned for your posting rules and the algorithm used for your external bank symbols will also play pivotal role in clearing the accounts.

11.   Ideally you will use FF67 / FF.5 / FF_5 for uploading manual or electronic bank statement FEBA / FEBA_BANK_STATEMENT is used for further processing.

12.   GO THROUGH SAP NOTE 48854 Please go through SAP Note. 48854. You will get an idea regarding the functionality of the algorithms. Though this note is in relevant to GB specific, you will find this very useful.

13.   Description follows below regarding the normal procedure for maintaining table T028G. Due to the different bank codes and posting rules, pre-Customizing is not possible at this point.

14.   The following processing types are available - unless stated otherwise, you should use the interpretation algorithm: '000 - No interpretation' in each case. 

a.      '00': There is no processing. The entry line is ignored.

b.      '01': A validation is made whether an entry exists for the transferred check number in the check table (PAYR). The check number and payment document number are transferred for further processing. Interpretation algorithm: outgoing check processing '011'-'013'; the update in the check file is via the interpretation algorithm.

c.       02': Transfer of the ending balance to the electronic bank statement

d.      '03': Transfer of the opening balance to the electronic bank statement

e.      '04': Clearing via the allocation number which is delivered with the bank statement. No interpretation algorithm.

f.       '05': Clearing of BACS payments or BACS bank collection. The reference text field is first read to ascertain whether it involves payments initiated by users or bank collection via BACS. Providing it does involve a cash transaction initiated by the user, the payment document numbers concerned are determined via the reference number and transferred as a reference to further processing. Interpretation algorithm: '000 - No interpretation' or '019 - Reference number DME'. Note To differentiate between the two procedures in table T028G, you have to maintain two separate entries. Example: the bank uses bank code '62' for cash receipts and for BACS bank collection. Ext. Transaction +/- sign Posting rule Int. Algorithm Processing type 62 + GB62 001 5 62 SAPBACS + GB63 000 5

g.      '06': Bank costs or interest revenues Recommended interpretation algorithm: '000 - No interpretation'

h.      '07': Total amount of cash disbursements

i.        '08': Total amount of cash receipts

j.       '09': Items not paid Recommended interpretation algorithm: '000 - No interpretation'

Step-by-Step Procedure for Customizing an Electronic Bank Reconciliation Statement

1. Create House Bank and Account ID (FI12) 

2. Setup EDI Partner Profile for FINSTA Message Type (WE20) 

3. Configure Global Settings for EBS (IMG) 
     - Create Account Symbols 
     - Assign Accounts to Account Symbols 
     - Create Keys for Posting Rules 
     - Define Posting Rules 
     - Create Transaction Types 
     - Assign External Transaction Types to Posting Rules 
     - Assign Bank Accounts to Transaction Types 

4. Define Search String for EBS (Optional) 
    - Search String Definition 
    - Search String Use 

5. Define Program and Variant Selection 

 

Additional information is also available in the SAP Library under:
Financial Accounting > Bank Accounting (FI-BL) > Electronic Bank Statement > Electronic Account Statement Customizing.

Bank Reconciliation Statement

The following are the steps for BRS:

Create Bank Master Data - This can be created through T.Code FI01 or you can also create the house bank through IMG/FA/Bank accounting/Bank account

2. Define House Bank

3. Set up Bank selection payment programme- IMG/FA/ARAP/BT/AUTOIP/PM/Bank selection for payment prg.
   A. setup all co codes for payment transaction - Customer and vendors
   B.setup paying co codes for payment transactions
   C.setup payment method per country
   D.setup payment method per co code for payment transaction
   E.setup bank determination for payment transaction
Please go for Cheque management using T code FCHI     (IMG/FA/ARAP/BT/OP/AutoOp/PaymentMedia/CheckManagement) and for void reasons FCHV. You can create Bank Reconciliation statement by TC FF67 (SAP/AC/Treasury/CashManagement/Incomings/ManualBankStatement) . Don't forget to keep the opening Balance as zero. Use FBEA for post process.
All the steps together will lead to (FF67) Bank reconciliation statement.
 

What is the difference between Business Area, Profit center & Profitability Segment?

Business area is an organisational unit which corresponds to the specific business segment or area of responsibility. Identification of business area helps in segment reporting of a company in its financial statements. Business areas can be identified based on the products of the company or based on geographical area.

Profit centers are internal areas of a company that have the responsibility for achieving target profits or productivity goals.

The objective of business area is more for reporting purposes whereas profit center allows to analyse areas of responsibility and to delegate responsibility to decentralised units (eg., the various divisions within a company). Thus, profit center are basically treated as "companies within a company" and ensures effective control.
Profitability Segment corresponds to market segment. The market segments can be defined as products, product groups, customers, customer groups, geographic areas, etc. For example, a company may wish to analyze profitability for a specific group of products that the company sells to a particular customer (or group of customers). When setting up CO-PA, the company will have broad flexibility to choose whichever characteristics are relevant for defining the company's market segments. Each unique combination of characteristic values (e.g. sales of product A to customer X) defines a profitability segment.

Difference between Profit Center and Business Area

Business area will have many profit centers. For example Vehicle is a business area in a company. Vehicle can be cars and Bikes etc. Here Vehicle is business area and Cars and Bike are profit centers. In broad Vehicle is a profit center. But as it has sub areas those are profit centers. So profit centers cannot be replaced with business area and vice versa. We can replace business area by Profit centre, only condition is that it should be in same controlling area. The business area is more like a business unit of a company. You can have multiple profit centers within a business area.

Main distinguish factor is that distribution and assessment in possible in profit center but not in business area.

One more distinction is that Business area need not be attached to any organisation structure. But profit centres can be created only under the controlling area. Business area can be across controlling area.

Business area concept is used for making strategic decisions by the management whereas the primary purpose of profit centre accounting is responsibility accounting.

Asset Transactions - Accounting Entries :

Asset Acquisition:                              F-90 - With Vendor

 

Dr.        Fixed Asset – Acquisition Cost

Cr.    Vendor (Accounts payable)

 

• Posting date of the document will be copied into the asset master as the capitalization date.
• The depreciation start date of each depreciation area will also be determined and updated in the depreciation area data tab page.
• Asset acquisition posting could also be done without PO from the MM module.  
• Posting could be done in FI posting only.

 

Asset Disposal – Sales to a Customer:            F-92 - With Customer

 

Supposed an asset with historical cost $1,000 and accumulated depreciation of $100 is being sold to a customer at a price of $1,100, the posting entries will be as follows:

 

Dr. Customer account (A/R)                    1,100  

Cr. Revenue for asset disposal                1,100-

Cr. Fixed asset – acquisition cost            1,000- 

Dr. Accumulated depreciation                    100  

Dr. Clearing account for asset disposal    1,100 

Cr. Gain/loss of fixed asset disposal          200-

 

 

The posting date of the retirement posting will also be updated into the field "deactivation date" in the asset master as the retirement date.

 

 

Asset Disposal – Scrap without Revenue            ABAVN - Asset Retirement by Scrapping

 

Instead of selling, an asset could be disposed as a scrap.  In this case, no revenue is expected and a loss will be realized in the P&L if the fixed asset being scrapped still carries a net book value.

For the same asset with historical cost $1,000 and accumulated depreciation of $100, the posting of the scrapping will be as follows:

 

Cr. Fixed asset – acquisition cost            1,000-

Dr. Accumulated depreciation                    100

Cr. Gain/loss of fixed asset disposal          900

 

 

Asset Transfer within a Company – Reclassification

 

The NBV of an existing asset master record could be transferred to another asset within the same company.  The transaction could be used in the following scenarios:

• Reclassify an existing asset to a new class or to correct an error
• Transfer an asset to a new one with the same class.  This may be necessary to execute the change of the remaining useful life of an asset but still spread the net book value evenly throughout the remaining life without allowing the system to catch up the postings of the missing or extra depreciation of the past periods

 

For an asset with historical cost $1,000 and accumulated depreciation of $100, the posting of the intra-company transfer posting will be follows:

 

Cr. Fix asset – acquisition cost (old asset)                     1,000-

Dr. Accumulated depreciation  (old asset)                        100

Dr. Fix asset – acquisition cost (new asset)                   1,000

Cr. Accumulated depreciation  (new asset)                       100-

 

The old asset being transferred will become a retired asset and the transfer posting date will be updated as the retirement date in the asset master record. 

For the new receiving asset, the transfer will be the same as if it is being acquired. 

The transfer posting date will be used as the capitalization date.

 

Month End Processing – Depreciation Run      AFAB-Depreciation Run

 

Dr. Depreciation expense

Cr. Accumulated depreciation

 

Note that the above posting to G/L will be done in a summary level by G/L accounts and cost center levels because the depreciation expense has to be charged to cost center in CO.  However, the detailed depreciation amount of each asset will also be stored in Asset Accounting such that each unique asset master record will also have its unique posted depreciation amount.  Besides, after each depreciation run, the system will issue a report which list out the depreciation posting amount of each individual assets as a record.  This is advised that this report should be kept as an additional audit trail.

 

Asset Under Construction (AUC) Config & Process Steps:

 

Internal Order as Investment Measure:

 

 

1. Define the AuC Asset Class (with investment measure) - OAOA

2. Define the Asset Class – for Main Asset - OAOA

3. Define Investment Profile - OITA

a. Assign the AuC Asset Class (Step-1) in the investment profile

4. Assign Investment Profile to Model Order - OITA

5. Define Order Type (Investment) - KOT2

a. Settlement Profile - OKO7

b. Maintain Allocation Structures - OKO6

c. Planning Profile - OKOS

            d. Budget Profile - OKOB

6. Create an Internal Order - KO01

a. With the Investment Profile (Step-2)

b. AuC automatically created by the system using Asset Class given in the Investment Profile

7. Post the amounts to IO - FB01

 

Dr. Material supplied to Asset (Expenditure)

Cr. Cash account

 

8. Settle the amounts to AuC from IO (Prcg type: Automatic) - KO88

 

Dr. Asset Under Construction account
Cr. Contra Capitalized

 

9. Create the Main Asset - AS01

10. Settle the amounts to Main Asset from AuC (Prcg type: Full) - KO88

 

Dr. Final Asset account

Cr. Asset Under Construction account

 

AuC using Line Item Settlement:

 

1. Define the AuC Asset Class (with Line Item Settlement) - OAOA

2. Define the Asset Class – for Main Asset - OAOA

3. Define Order Type (Overhead) - KOT2

4. Create an AuC-Asset (using Step-1 Asset Class) - AS01

5. Create an Internal Order - KO01

a. Assign the AuC – Asset in Settlement Rule in IO

6. Post the amounts to IO - FB01

7. Settle the amounts to AuC from IO - KO88

8. Create Main Asset (using Step-2 Asset Class) - AS01

9. Assign the Main Asset in IO (Step-5) - KO02

10. Settlement AuC – Line Item List - AIAB

11. Settlement AuC - Receiver - AIBU

Difference Between CENVAT & MODVAT

In India, an excise tax is levied on the manufacturer of goods when those goods leave the place of manufacture. Formerly called the Central Excise Duty, this tax is now known as the Central Value Added Tax (CENVAT). Manufacturers may offset duty paid on materials used in the manufacturing process by using that duty as a credit against excise tax through a process known as Central Value Added Tax Credit (CENVAT Credit). The offsetting process was formerly known as Modified Value Added Tax (MODVAT).

 

MODVAT was replaced by CENVAT w.e.f. 1.4.2000. Principally, there is no difference between CENVAT and earlier MODVAT.

 

MODVAT contained separate provisions for capital goods, while CENVAT rules combine provisions in respect of capital goods and inputs

 

MODVAT required submission of declarations in respect of details of inputs and capital goods. CENVAT does not require any such declaration.

 

MODVAT prescribed statutory registers RG23A and RG23C. Such statutory registers are not required under CENVAT, but records have to be maintained, which require all information as was required in those registers.

 

If inputs are cleared as such, MODVAT credit just had to be reversed, while in case of CENVAT, these have to be cleared at the rate and value applicable as on date of removal.

 

MODVAT contained separate provisions for waste and scrap. CENVAT rules consider waste and scrap as any other final product and make no separate provisions in respect thereof.

 

In MODVAT, inputs were required to be sent for job work on payment of 10% duty. This nuisance has been removed in CENVAT. Goods sent for job work under CENVAT has to be brought back in 180 days.

 

MODVAT could be availed only on 'duplicate copy of invoice'. CENVAT can be availed on any copy of invoice.

 

MODVAT contained provision that duty paying document will be valid only for 6 months. CENVAT does not contain any such restriction.

 

In MODVAT, credit on capital goods could be taken immediately, while in CENVAT, it has to be taken in two yearly installments of 50% each.

 

MODVAT required installation of capital goods for availing credit. This requirement has not been specified in CENVAT.