Introduction

Medium to large scale businesses do thousands of transactions each day. Lot of these transactions are banking related. Reconciling bank balances with book balances manually is not possible.

Uploading manual bank statement in ERP system is a time consuming affair and prone to clerical errors due to manual intervention. Treasury staff in an organisation may end up spending lot of time usually at the end of month for reconciliation.

Electronic bank statement feature provided by SAP can save a lot of time and is error free. SAP will upload the file which is sent (FTP) by bank. Based upon SAP configurations financial postings will be done. This configuration will upload the statement automatically and at the same time will do the bank sub ledger postings and clearing postings.

Prerequisites

Following are the basic requirements for setting up EBS in SAP:

  • House Bank
  • Bank file in specified format
  • SAP Configurations for EBS
  • Set up connection between SAP and bank for file transfer mostly secured (sFTP)
  • SAP automated batch set up

SAP Configuration of electronic bank statement(EBS)

Financial Accounting –> Bank Accounting –> Business Transaction –> Payment Transactions –> Electronic bank statement

EBS is done at Chart of Account Level

1. Account symbol creation – Account symbols are specifications for general ledger accounts. These are posted with each possible transaction contained in bank statement.

2. Assign accounts to account symbol – GL accounts are mapped to account symbols in this step.

3. Create keys for posting rule – Description for the necessary posting rules is entered in this step. Each posting rule represents a business transaction.

4. Define posting rules – In this activity posting specifications for each posting rule is created. You specify how a certain business transaction is to be posted with which posting key, document type and posting type.

5. Create transaction type – Transaction type contains the external transaction type. External transaction types are codes used by banks to specify the business transaction in bank file. Transaction types in turn  are link between External Transaction Types, Posting Rules and Interpretation Algorithms. Interpretation algorithm interprets the note to payee line in bank statement and accordingly clears the open items accordingly.

6. Assign bank account to transaction types – Last step involved is assigning bank accounts with transaction types as defined above. This step contains the list of external transaction which are valid for a house bank. Please note that assignment is of Bank account number and Bank Routing Number and not of GL account in this step.

Summary Relationship

GL Account –> Account Symbol –> Posting Rule –> Transaction Type (linked with bank account number and algorithm) –> External Transaction Codes

File format

There are many EBS file format currently being used. Most commonly used are BAI, MT940 and Multi Cash formats.

BAI format is a standard format and recommended by SAP. Main difference between BAI and other formats is that it allows file to be processed even if some of the external transaction codes are not available in SAP. System will post all those transactions which have valid external transaction codes. Missing codes need to be mapped and the statement need to be reprocessed using standard SAP transaction code FEBAN (Edit bank statement).

Illustration

Company X has decided to use SAP delivered Electronic Bank Statement processing for uploading and reconciling its daily bank statement. You have been asked to configure EBS upon considering below details:

  • Company received listing of external transaction codes (BAI codes) used by bank
  • External transaction code 100 signifies Agency fees
  • External transaction code 101 signifies interest earned
  • Bank account number is 1122334455 and routing number is 2778899 of the house bank

Configuration steps

  • Define the account symbol for

       –  Agency Fees as AGENCY

       –  Interest Earned as INTEREST

       –  House bank as HOUSEBK1

  • Link the account symbols with corresponding GL accounts
  • Create posting key for

– Agency Fees as ZAGY

– Interest Earned as ZINE

  • Define the posting rule for

– Agency Fees (ZAGY) with posting key 40 assigned with account symbol AGENCY and posting key 50 assigned with account symbol for House           bank  HOUSEBK1

– Interest Earned (ZINE) with posting key 40 assigned with account symbol INTEREST and positng key 50 assigned with account symbol for House        bank HOUSEBK1

  • Create a transaction type as TRAN1
  • Assign transaction type

        – 100 with  posting rule ZAGY along with Interpretation Algorithm as 12

        – 101 with posting rule ZINT along with Interpretation Algorithm as 12

  • Assign bank account number and routing number with transaction type TRAN1
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