Cash Management Bank Reconciliation
Contents 1 Introduction...... 3 1.1 Context......... 3 1.2 About This Document...... 3 2 Overview of the process...... 5 2.1 Inputs and triggers...... 5 2.2 Process step details...... 5 3 Document Control...... 18 3.1 Revision History...... 18 3.2 Approvals...... 18
1 Introduction 1.1 Context This is a work instruction for Bank Reconciliation process which is part of the Cash Management function. The objective of this process is to ensure all cash movements are recorded accurately. 1.2 About This Document 1.2.1 Document Purpose This document is a work instruction. It should be used as reference guide and as a support but not a substitute for training. This is a living document that is constantly updated and improved. 1.2.2 Intended Audience This document is intended to be read by: The Finance Team 1.2.3 Roles and Responsibilities Role Responsibilities Obtain bank statements from online banking on a weekly basis. Export bank statement to spreadsheet and save. Classify reconciliation type required into Manual or Automatic. For manual reconciliation, compare bank statement balance to corresponding Bank GL balance. Cash Management Team o o If comparison matches, then update excel rec. If comparison doesn t match, then create in spreadsheet a reconciliation between bank statement balance and GL balance to identify errors / missing postings in payment / receipt. For automatic reconciliation, identify whether the upload is done via a file or manually. o o If manual, process manual bank statement in SAP If file upload, save bank statement in MT940 format and
import file with parameters Post Immediately in SAP SAP will match bank transactions against items posted in clearing accounts where it can. Manually match off remaining transactions where possible in SAP Cash Collection (CC) Correct error / missing postings in payment; send confirmation email Accounts Payable (AP) Correct error / missing postings in receipt; send confirmation email There are key dependencies with the Account Payable and Cash Collection teams. Account Payable need to complete payment postings. Credit Control team needs to complete receipt postings.
2 Overview of the process 2.1 Inputs and triggers The process starts with Cash Management Team obtaining bank statements from online banking as weekly activity. 2.2 Process step details 2.2.1 Obtain Statement 1. Cash Management Team to obtain bank statements from online banking on weekly basis. And, export bank statement to spreadsheet (MS Excel) and save in bank statement folder. 2. Classify reconciliation type into any one of the below categories a. Manual; compare bank statement balance to corresponding bank GL balance, refer to section 2.2.5 b. Automatic; check file upload type and classify it into manual or automatic i. Manual; copy and paste bank statement from spreadsheet. This process continues in SAP, refer to section 2.2.2 for further instructions.
ii. Automatic; resave bank statement as MT940 file format. Then, Import file with parameters Post Immediately. This process continues in SAP, refer to section 2.2.3 for further instructions. 2.2.2 Copy and Paste bank statement in Excel (Process Manual Bank Statement) 1. Use transaction code FF67 in command field of SAP Easy Access screen and press Enter: 2. Specification screen is displayed. (Screen appears when you process for first time only else goes to next screen): Enter the following fields in Specification screen: Tick on Import advices
Start variant : select SAP01 from the drop-down menu (Memo record entry section) Process type : Select 4 from drop-down menu (Further processing section) Press Enter or click on 3. Process Manual Bank Statement screen is displayed: Enter the following fields in Process Manual Bank Statement screen: Bank Key (Sort Code) Bank Account (Account #) Currency (as applicable) Statement Number (as applicable) Please note: click on Overview button to get the last statement # Statement Date : date on the bank statement On the same screen go to Control section enter the following fields:
Opening Balance : previous day s closing balance Closing Balance : from the bank statement Posting Date : week ending date Press Enter 4. The below Process Manual Bank Statement screen is displayed: Enter the following fields in Bank statement items section of the screen for each bank statement items: Trans : 009+ (use this transaction type for cash receipt) Value date : statement date Amount : value on the statement from the customer Doc. No. : customer invoice #. Please Note: Copy / paste bank statement items from soft copy as applicable. 5. On the Process Manual Bank Statement screen, click on Bank Statement menu and click on Save as displayed below:
. 6. On the Process Manual Bank Statement screen, click on Bank Statement menu, select Post and click on Individual statement as displayed below: 7. Update Account Statement/Check Deposit Transaction screen is displayed: The amount posted on the Bank Account # can be viewed in above screen. The below confirmation message is displayed at the bottom of the screen.
2.2.3 Import Bank Statement File 1. Use transaction code FF_5 in command field of SAP Easy Access screen and press Enter:
2. Bank Statement Various Formats (Swift, Multicash, BAI..,) screen is displayed: Enter the following fields in above screen: File Specification section: Tick Import data Electronic Bank Statement format: select SWIFT MT940 with field structure from the drop-down menu Statement file: click on to get the path of Imported Bank statement File location. Tick on Work station upload Posting parameters section: Select option Post Immediately
Tick on Assign value date Output Control section: Tick on Print bank statement Tick on Print Posting log Tick on Print staticss Click on Execute 3. Bank Statement Various Formats (Swift, Multicash, BAI..,) screen is displayed: The above screen confirms that the bank statement upload was successful. Check closing balance agrees to statement closing balance. Once the Bank reference number (Invoice # or customer #) match against each other invoice is offset against the payment. The invoices which by FEBAN. do not get posted against the Payment need to be done manually 2.2.4 Manually Match Off Transactions 1. Use transaction code FEBAN in command field of SAP Easy Access screen and press Enter:
2. Selection of bank statements by banks and Account Nos. screen is displayed: Enter the following fields in Hdr data section of the above screen: Company Code House Bank Account ID
Press Execute button 3. Edit Bank Statement screen is displayed: Enter the following fields in Edit Bank Statement screen The transactions # posted successfully is in green. The transactions # that weren t automatically matched in red. These will have to be processed manually. 4. To process / post manually on the Edit Bank Statement screen, select the statement in red, click on Statementt Items menu, click on Post as displayed below:
5. Post with Clearing Select open items screen is displayed: Enter the following fields in Post with Clearing Select open items screen:
Company Code Account (incoming / outgoing as applicable) Click on Process Open Items 6. Post with Clearing Process open items screen is displayed: Enter the following fields in Post with clearing select open items screen screen Allocate the payment received (Not assigned) to the invoice by double-clicking on the amount for the relevant invoice. Click on Post button 7. Use transaction code FEBAN in command field of SAP Easy Access screen and press Enter. This is to verify if payment is posted. The below screen displays a transaction # not posted automatically before but manually posted successfully after:
2.2.5 Complete Bank Reconciliation 1. Cash Management Team to compare bank statement balance to corresponding bank GL balance. 2. If bank statement balance and corresponding bank GL balance match, then Cash Management Team update Excel rec. Financial Accountant then reviews and approves it. The process ends. 3. If bank statement balance and corresponding bank GL balance don t match, then Cash Management Team create in Excel a reconciliation between bank statement balance and GL balance to identify errors / missing postings. 4. Cash Management Team classify each identified error / missing posting into any one of the below two categories and send emails to respective team for corrections. a. Payment; Account Payable team to correct error / missing posting; send confirmation email to Cash Management Team b. Receipt; Cash Collection team to correct error / missing posting; send confirmation email to Cash Management Team` 5. After receiving confirmation from Cash Collection / Account Payable teams that error / missing posting has been corrected, the Cash Management Team check the reconciliation type and classify it into any one of the below two categories. a. Manual; Cash Management Team to continue process with Section 2.2.5 b. Automatic; Cash Management Team to continue process with section 2.2.4
3 Document Control 3.1 Revision History Version Date Author Description 0.1 3.2 Approvals The following roles relate to the most recent version of this document as listed in the Revision History above. Name Title Signature Date Emily Burlington Agnes Muszynska Mike Pollard Process Owner Process Sponsor Head of Finance