1. Management of Bank Master data for your company s bank; 2. Keeps Bank Master data for the customer of your Company;

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1 This page contains the following topics : 1. Bank Accounting- An overview 2. Bank Master Record and bank directories 3. House Bank 4. Define House Bank 5. A practical Example of using house bank 1. Bank Accounting An overview SAP has a dedicated solution to handling of bank accounts. This component is used to handle accounting transactions that you process with your bank as well as with the banks of customer and vendor. This Solution is used to handle the following tasks : 1. Management of Bank Master data for your company s bank; 2. Keeps Bank Master data for the customer of your Company; 3. Keeps Bank Master data for the vendors of your company; 4. Cash balance management ( Check and bills of exchange management); 5. Creation and process of incoming payments; (1 of 12)3/30/ :46:49 PM

2 6. Creation and process of outgoing payments; 7. Handles Accounting transactions that you process with your bank; A Scenario of Banks used in by company, customer and vendors 2. Bank Master Records/ Bank Directories Master record must be created for every bank that is used in the system (for a house bank or customer/ vendor bank). In the R/3 System, bank master data is stored centrally in the bank directory. (2 of 12)3/30/ :46:49 PM

3 3. House Banks The banks, those are used by your company are called house banks. In other words, a business-partner represents a bank through which you can process your own internal transactions. The house bank contains the data like : 1. Bank master data 2. Information for electronic payment transactions 3. Bank accounts per house bank 4. General ledger account per bank account Notes : Bank Master data are created client level. That means, many company code can use one bank such as ICICI Bank. (3 of 12)3/30/ :46:49 PM

4 But only one account number can be used by one company code. Similarly a House bank can be a single company code. 4. Define House Banks Organisation s own banks are called house bank. (Original Notes from SAP) Each house bank of a company code is represented by a bank ID in the SAP system, every account at a house bank by an account ID. 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. Standard settings Several house banks are supplied as examples in the standard system in order to enable configuration of the payment program. Note For domestic banks, you should enter the bank number in the "bank key" field and for foreign banks, you should enter the SWIFT code in this field. For Belgium, the first three house bank ID items must be numeric. Do not forget to create a G/L account for the specified bank account. The G/L account is to be managed in the same currency as the account at the bank. Activities 1. Work out the specifications you have to enter in the system for your house banks. 2. Define your house banks and the corresponding accounts in the system under a bank ID or an account ID. (4 of 12)3/30/ :46:49 PM

5 Additional information If you have already carried out the step "Copy bank directory", you have already created house banks in the system or have updated the house bank data that already existed. If this is the case, in this step you only have to create the house banks that were not created in the "Copy bank directory" step. You can also add any data that may be required to house banks that were copied along with the bank directory. 4.1 Defining House Bank (Continued..) Menu Path : IMG Menu Financial Accounting Bank Accounts Define House Bank T- Code : FI Defining House Bank (Continued..) (5 of 12)3/30/ :46:49 PM

6 4.3 Defining House Bank (Continued..) Important Fields : (6 of 12)3/30/ :46:49 PM

7 Bank Key : In this field, you specify the bank key under which bank data from the respective country is stored. When you define the country key, you also specify the country-specific definition of the bank key. Normally, you manage banks using their bank number. The bank number in the control data for the bank is then displayed twice, that is, as the bank key too. In certain countries, the bank account number takes on this function; then there are no bank numbers and the bank data is managed using the account number. For data medium exchange, you may find it useful to be able to enter foreign business partners without a bank number, even if there are bank numbers in the country in question. In this case, the bank key can be assigned internally. To manage bank data using another key, for example, the SWIFT code, external number assignment can also be used Defining House Bank (Continued..) Important Fields : (7 of 12)3/30/ :46:49 PM

8 SWIFT Code for International Payments Uniquely identifies a bank throughout the world. Use The S.W.I.F.T. code is used for identifying banks in international payment transactions Bank group (bank network) Serves to classify banks in such a way that payment transactions within a group are processed as quickly as possible (bank chain optimization). Use For automatic payment transactions, if possible, a combination of the business partner's bank details and your own bank details is selected in which both banks involved belong to the same group Post Office Bank Current Account This indicator causes the account to be treated as a post office bank current account. Use This field is used in Germany and Switzerland 4.5. Defining House Bank (Continued..) (8 of 12)3/30/ :46:49 PM

9 Important Fields : Account ID : This field together with the house-bank Id uniquely defines a bank account. Bank Account no. : This field contains the number under which the account is managed at the bank. G/L : G/L accounts for your bank accounts For each of your bank accounts, you must define a G/L account in the system. In the G/L account master record, enter a currency key (this must correspond to the currency in which the bank account is managed). If, for example, you manage a foreign exchange account in German Marks at your bank, you must enter the currency key for this currency in the G/L account master record. Alternative Bank Acct Number (for Ambiguous Acct Number) The alternative bank account number is used for distinguishing house bank accounts with identical account numbers. This can occur if a house bank manages accounts in different currencies using the same account number. The alternative bank account number must then only be defined if it differs from the bank account number. You must maintain it together with the bank key in the system. (9 of 12)3/30/ :46:49 PM

10 If you have house bank accounts with identical account numbers and use the electronic account statement for these accounts, then you enter the internal key used by your house bank here (usually the account number with attached currency encryption). If you use the manual account statement, then you can freely assign the alternative account number. Using bank account number + currency code is, however, recommended. 5. A Practical example of using house bank In practice we use three General ledger accounts for a single bank account of any house bank. These are : 1. Bank Account (Main) Not a open item account GL No Bank Account (Incoming) is a Open Item A/c GL No Bank Account (Out-going) is a open Item A/c GL No Note : Bank A/c (Incoming) and Bank A/c (outgoing) are open items and the ledger Account number should be sequence. We will take here the following two entries as examples of Incoming payments and Outgoing payments: (10 of 12)3/30/ :46:49 PM

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12 Thus, by uploading the bank statement either electronically or manually as per the above example, the Bank A/c (Main) will exactly match with balance of the bank. Note : Bank (Incoming) A/c and Bank (Outgoing) A/c are clearing Accounts. Clearing Account : An account to which postings are recorded temporarily. Clearing accounts are auxiliary accounts that exist for technical reasons and which are cleared repeatedly. Postings may need to be made to a clearing account because of: A time gap between accounting transactions (GR/IR clearing account) Organizational task distribution (bank clearing account) Accounting transactions requiring clarification Note : All clearing accounts will be reconciliation account The above example shows how the entries are posted to incoming and outgoing bank accounts before being posted to main bank account. It also shows the actual cash balance in the bank in real time. To be continued.. Copyright Haresh Pradhan, Sai Technology, Mahipalpur, New Delhi No of Visitors. (12 of 12)3/30/ :46:49 PM