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Bank reconciliation
Added by Guest, last edited by Guest on Oct 26, 2007

Bank reconciliation

The A/R department in the SSC also processes the daily bank-statements / -mutations for the local units.
All bank-mutations are delivered from the connected banks in electronic format to SAP.
The central treasury department at SAP's headquarter creates from these electronic bank statements, on daily basis, batch-input-sessions for posting the items on the bank transitory accounts and
clearing/posting open items on sub ledger accounts.

Fig 9 - Corporate Treasury

The electronic bank statements are now also available and viewable in the ISP system.
For practical reasons and for further processing most clerks will open up a screen with the new statement of the day and continue with steps below.
Clearing of bank transitory accounts (11XXX1 to 11XXX9) is performed with the automatic clearing program by the SSC. With this program the batch input sessions are being processed, and for every
bank mutation on the processed bankstatement the system will automatically go look for "matching data" in the mutation line item. Most commonly it looks for invoice numbers. But it can also search for
other indicators like "bank costs". Whenever an indicator, such as invoice number is found, an automatic posting is created (customer payment in this case) which clears the open item found on the
customer. This process takes place in background mode, so the clerk will not see, or manual has to interact to create these postings. Whenever there is no link found one of the statements mutation
lines, the batch processing halts, and the clerk has the option to manual interact and search for the matching open items, by for example:
- analysing bank statement once more; sometimes invoice numbers are only halfway written in the mutation line, or invoice numbers are written joined together
- contacting the customer, if no invoice info is available
- match the payment with an earlier received written payment advise

Basically the manual interaction in the batch input processing allows the clerk to show the batch input which items needs to be cleared in the concerned bank mutation, save it, and then the batch input
processing continues with the rest of the mutation lines on the statement.
Another possibility is to "skip" the halted transaction. Then still the batch input processing continues, but the payment posting for the mutation is not made. The clerk has then at a later point in time the
possibility to fully manually create payment and clear that item on the transitory account.
The batch input processing will also process the clearing of outgoing payment documents (automatically posted by the payment run -> See accounts payable process). These mutations are matched
easier, since all info/details are already set by the same system. Only manual interaction could occure for example when there is occurance of currency difference, and therefore the actual currency
exchange rate on bank statement could differ for the currency rate in the payment document in the system.
If due to whatever reason a posting is not possible immediately (missing references /short payment /payment for other customer items as well ...), the posting should be done to one of the "special"
(internal) G/L transitory accounts. (So called dummy accounts; these accounts replace the main bank transitory accounts, since these last ones need to be cleared in the morning, to full extend for old
items).
To make this happen the clerk uses a special reposting program in the ISP system, which automatically "reposts" remaining uncleared items to the respective special G/L transitory accounts.
The clerks have then more time available to investigate in these remaining items in order to clear them as well, as described above in manual clearing mode.
The reason for this reposting is that the main transitory bank accounts need to be cleared every morning due to cash pooling purposes.
The effectiveness of the bank-batch input process highly depends on the content-quality of the electronic bank-statement data. Therefore regular interaction/allignment between global treasuries, A/R
responsibles and customers is necessary in order to reach the goal of high quality data.

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