SAP-TO BE Process

New Allenberrry Works

FICO NAW
Finance and Controlling

Version 1.0
28.09.2006

STATEMENT OF CONFIDENTIALITY / DISCLAIMER

This document is the property of Caritor, Inc. No part of this
document shall be reproduced, stored in a retrieval system,
or transmitted by any means, electronic, mechanical,
photocopying, recording, or otherwise without prior written
permission from Caritor, Inc.

Table of Contents

Table of Contents
Bank Accounting......................................................................................................................................3
1. AS IS Process-Vendor Payment...................................................................................................4
2. Core to Be Process-Vendor Payments......................................................................................6
3. AS IS Process-Receipts from Customer.................................................................................10
4. Core to Be Process- Receipts from Customer....................................................................12
Further Notes........................................................................................................................................................13
Changes to Existing Organization........................................................................................................................13
Description of Improvements and Key Metrics.....................................................................................................13
Notes on Further Improvements...........................................................................................................................13
Functional Deficit and Method to Remove That....................................................................................................13
Interface Requirement..........................................................................................................................................13
System Configuration Considerations..................................................................................................................13
File Conversion Considerations............................................................................................................................14
Any reports required related to current business process....................................................................................14
Any document/output would be printed for this business process........................................................................14
Authorization Considerations................................................................................................................................14
End User Training Requirements..........................................................................................................................15

A. SAP Standard Reports.............................................................................................................................16

B. Custom Developments............................................................................................................................17

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SAP-TO BE Process
Bank Accounting.
TO-BE Document
For SAP R/3 Implementation at New Allenberry Works.
Date: 28.09. 2006
Sr. No of TO BE document

12

Ref. Sr. No. Of AS-IS document

Name of Business Process:

Bank Accounting.

Module: Finance

Sub module: Bank

Version no of document:

Date: 28.09.2006

Version Management This Document is subject to change control. Every change of the document has to Undergo change
control procedure and has to be registered in the following table
Version

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SAP-TO BE Process
1. AS IS Process-Vendor Payment
The following payment methods are used for domestic vendors
Cheque
Demand draft
Account adjustment
The following payment methods are used for foreign vendor payments.
Payment through Bank
L/C
Partial payments to vendors are handled manually on GL account.
NAW issues single payment for multiple invoices.
Separate account is prepared for vendor and customer for handling payments to vendors
who are customers also.
Mostly foreign currency payments are made in advance hence no case of exchange
fluctuation. In some cases where payment is made after receipt of invoice, exchange
fluctuation is adjusted in expenses booked earlier i.e. machinery spares etc.
Preprinted and pre numbered cheque book is used.
Cheque register is reconciled manually with the bank statement.

Vendors down Payment

In case order preparation takes time and goods are required urgently and vendor wants
advance payment - vendor down payment are made.
Mostly down payments are made as per the purchase order. Hence payments are made as
per terms of purchase order through cheque or cash. Process is detailed in the process
flow chart.

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SAP-TO BE Process
Vendor Payment Request
On vendor offering cash discount, payments are made before due date.
Whenever a payment is released on discount, System should provide information of such
transactions giving details like Vendors Name, discount availed etc to FI accounting system.

Employee Salary and Expenses

There is no module for HR for salary payments. These are calculated by personnel dept
and given to accounts for verification and payment. Employees expenses are paid on
submission of bills.

Manual outgoing payments

In all cases vendor payment is processed manually. Payment media is hand written.

Automatic outgoing payment

NAW does not have automatic payment at present. Payments are posted through bank
voucher by debit to vendor and credit to bank.
Payments are not entered automatically based on an electronic bank statement. NAW uses
mainly UCO Bank for vendor payment. Sometimes HDFC bank is also used.
Daily Bank balance position is done manually. Bank charges are also handled manually.
These charges are posted through bank voucher manually.

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2. Core to Be Process-Vendor Payments
Bank Sub module
Bank sub module handles all Bank and Cash Transactions. It enables Bank

Reconciliation. Cash Transactions are managed in this module through Cash Journals
House Bank
House Bank functionality in SAP will be introduced for NAW Fbd. House Bank contains the
Master details of the Bank against which you have the a/c. The House Bank has Account ID
assigned to it, which will specify the exact Bank A/c which the company has against that House
Bank. House banks with the relevant Account will be created and the Bank G/L Account
Structure for the main banks with operations will be as follows:

Confirmed Cash account (Main bank account)

Incoming Cheque Account

Outgoing Cheque Account

Confirmed Cash Account will be the only balance sheet Account/Main bank accounts while
Incoming cheques account and outgoing cheques account are clearing accounts.

In respect of other banks one main bank account alone would be created.
Outgoing Payment
All the vendor bills will be booked in to the system through materials management and
Finance module. Standard transaction will be used for making payment to the vendors.
Through the standard transaction, the system will print cheque and payment voucher.
Outgoing payments would be made through the system by printing the check s in the
format given by the banks. Check lots would be created and assigned to bank account
through transaction FCHI. Transaction code F-58 Post + Print forms would be used for
making the outgoing payments. Immediately after saving the entry system will create a
spool request for check and payment advice printing, which will be printed after passing
all the entries. The following entries are passed for outgoing payments made:
Vendor A/c

Dr.

To Outgoing Checks A/c

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SAP-TO BE Process
After the check encashment by the vendor, using the transaction code FF67 the following
entry would be passed in the system:
Outgoing Checks A/c

Dr.

To Confirmed Cash Account

Check Registers would be maintained in the system.
Outgoing Payment-Details
Outgoing payment mentioned above will require the individual line items to be selected and
paid. The following information is required for making payment.

Document date and Posting date

Currency in which payment is to be made

Bank from which payment will be made

Vendor to whom payment to be made

Selection option for choosing the open items

Once these options are selected list of open line items will be displayed in the subsequent
screen Payment item to be selected from the list
Partial payment and residual payment is also possible
Document numbers will be generated internally by the system.
Down Payment made
Down payment to vendor will be made using F-48.
As and when the closing (or final) invoice relating to down payment is received, it is processed
through T Code F-43 or even T Code FB60.
The system will prompt the user about existing unadjusted down payment(s), so that such down
payment(s) is (are) cleared against the invoice.
Once the vendor invoice has been processed, the user must immediately clear the appropriate
down payment against this invoice. If the down payment clearing transaction (F-54) is

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SAP-TO BE Process
processed straight after the Process Invoice (F-43) transaction, then the SAP document number
of the invoice just posted will be defaulted by the system as the invoice number to clear down
payments against.
The down payment(s) is cleared against the closing invoice(s) to which it relates. The system
notes the document number of the invoice in the line item of the down payment .The down
payment(s) must be cleared immediately after the final invoice(s) are posted.
Employees as Vendors & Advances
All the employees will be created as Vendor and they are called as internal vendors for this
purpose. Employee Payments such as Advance for Travel will be handled through special
GL. Both Cash and Cheque payments for the Advance payments can be done.
Noted Items

LC/Bills of Exchange accounting can be monitored through the Noted Item/Special GL

facility of SAP. More discussion on B/E accounting will be done in Business Blue Print on
Bills of Exchange

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SAP-TO BE Process

Process Charts

Valid Down
Payment Sanction/
Approval with (out)
Request

Transaction
complete in all
respects

Send back for

completion

Y
Down Payment
Posting

Generate AP
Document

End of
Process

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SAP-TO BE Process
3. AS IS Process-Receipts from Customer
The following payment methods are used for customer payments
Cheque
Demand draft
Payment through Bank
LC
Payment differences are handled manually. It is handled mostly by talking to customers on
telephone for payment differences. Sometimes a letter is also sent to customer in this
regard.

Payment Advise Note

In most of the cases payments are received along with advice from customer. Bank
voucher / Payment advice is entered manually after receiving the payment.

Customer Payment Follow-up

Regular correspondence with customer and personally visiting the customer is done if
payment is blocked.

Cheque deposit transaction

App. Ten cheques are deposited to the house bank per day.
Cheques from customers are entered manually. Cheque numbers, invoice number given
by cheque issuer are used to allocate items. Cheques are posted directly to customer
account and not via clearing account.

Electronic bank statement

NAW does not have the facility of receiving the electronic bank statements at present.

Manual account statement

The following specific informations are contained in the bank statement
Debit side

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SAP-TO BE Process
Cheque payment contains cheque no and partys s name
Other charges contains nature of charges only
Credit side
Payment receipt No cheque no, bill no or partys name is provided
The house bank does not transfer business transaction codes with the bank statement to
help classify the posting.
The posting steps for typical bank statement posting, like payment received against export
sale are detailed below. In case of export sale two types of bills are generated.
In INR
In foreign currency
Both the bills are generated simultaneously at the time of sale. Hence at the time of receipt of
payment, it is required to adjust both the invoices. Further it contains exchange fluctuations too
which need to be posted.

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SAP-TO BE Process
4. Core to Be Process- Receipts from Customer
All the customer invoices will be booked into the system through SD and FI modules. Payments
received from customers will be handled by standard functionalities for Incoming Payments and
Down Payments received.
Checks received from customers will be accounted using the transaction code F-28.
The accounting entry passed by the system is as follow:
Incoming Checks A/c

Dr.

To Customer A/c
In the assignment field of transaction F-28, check/DD no of the Customer has to be
entered, so that the system can clear the incoming checks on its realization.
On the realisation of Check , using the transaction code FF67 the following entry would
be passed in the system:
Confirmed Cash A/c

Dr.

To Incoming Checks A/c

When the payment is received, reference numbers of Invoices against which it is received
should also be made available. If the Invoice references are available at the time of booking
incoming payment, then incoming payment will be adjusted against the respective invoice by
Incoming payment transaction. User will specify the amount and the customer as well as the
bank charges, if any. User can select the open items to be cleared through the incoming
payment. Partial payment and residual item options are also available. While debiting Bank
account, the Incoming cheque account for that House Bank will be used to facilitate the Bank
Reconciliation. If the invoice reference is not available at the time of booking incoming
payments, an entry has to be passed with out clearing. Subsequently when the bill details are
available clearing can be done through customer clearing transaction code f-32
Down Payment receipt:
Down payment received from customer will be made using F-29.

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SAP-TO BE Process
As and when the closing (or final) invoice relating to down payment is made, it is processed - T Code F-22
or even T Code FB70.
The system will prompt the user about existing unadjusted down payment(s), so that such down
payment(s) is (are) cleared against the invoice.
Once the customer invoice has been made, the user must immediately clear the appropriate down payment
against this invoice. If the down payment clearing transaction (F-39) is processed straight after the Process
Invoice (F-22) transaction, then the SAP document number of the invoice just posted will be defaulted by
the system as the invoice number to clear down payments against.
The down payment(s) is cleared against the closing invoice(s) to which it relates. The system notes the
document number of the invoice in the line item of the down payment .The down payment(s) must be
cleared immediately after the final invoice(s) are posted.
Calculation of Interest on closing balances of debtors will be discussed during the
progress of the project.

Further Notes
Changes to Existing Organization
-

Automated Check and Payment Printing

Check registers are maintained in the system

- For Bank reconciliation purpose for each bank, three G/L accounts need to be created, one

for Incoming Cheque, one for Outgoing Cheque and one will be the House bank/Main Bank account.
Description of Improvements and Key Metrics
With the selection list available for payment it will be easier to control the clearing of receivables against the
payment received at the time of booking the receipt entry so the account get reconciled then and there itself with
the payments made to vendor. Advances made by customers are displayed as Noted Items in the customer
account and this facilitates monitoring Customer Advances.
Notes on Further Improvements
NA
Functional Deficit and Method to Remove That
NA

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Interface Requirement
NA
System Configuration Considerations
NA
File Conversion Considerations
NA
Any reports required related to current business process
The Customer Outstanding Report covering a period 18 Months prior to the current date
/period execution is required.
Any document/output would be printed for this business process
Payment Advice, Checks would be printed. Cheque register giving details of cheques issued
Authorization Considerations
Detailed Authorization matrix will be defined for all users in the common file for all modules.
The high level Authorization requirements are as below.
Business Roles

Number of Users

Business Manager
Operations Manager
Transaction Owners

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SAP-TO BE Process

End User Training Requirements

<E.g.:
Business User Segments

Number of Users

Type of Transaction

Business Manager

Display, Reports

Operations Manager

Change, Display, Reports

Transaction Owners

Create, Display, Reports

Geographical Location

Sign-off (Approval) for this document:

Name of Team members:

Organization / Bus. Unit

FI/CO Consultant-Vinod Atmakuri

Caritor Inc

Business Process Owners

New Allenberry Works

Key User-Balbir Khanna

New Allenberry Works

Key User-Vishal Sharma

New Allenberry Works

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Signature

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SAP-TO BE Process

A. SAP Standard Reports

<E.g.:
SAP Standard Reports
Sl No:
01

Report Description
Check Register

Selection Criteria
FCHN

Output
Screen View/Output

02
03
04
05
06
07
08
09
10
11

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SAP-TO BE Process

B. Custom Developments
<E.g.:
Print Requirements
Sl No:

Report Description

Selection Criteria

Output

1.0
2.0

Development Requirements
Sl No:

Report Description

Selection Criteria

Output

1.0

Report Requirements
Sl No:

Report Description

Selection Criteria

Output

1.
2.
3.

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