FI-4000 Bank Accounting

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Bank Bank AccountingAccounting

FI-40005-03-2003 5-03-2003

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Course Agenda

Bank Accounting Time Welcome 9.00 – 9.10 Practicalities 9.10 – 9.15 Objective and Scope 9.15 – 9.25 Course Structure and Content 9.25 – 9.30 Bank Accounting Introduction 9.30 – 10.30 Break 10.30 – 10.40 Maintain Bank Accounts 10.40 – 11.40 Lunch 11.40 – 12.25 Payment Processing 12.25 – 13.25 Break 13.35 – 13.45 Bank Statement Processing 13.45 – 14.45 Break 14.45 – 14.55 Bank Switching 14.55 – 15.55 Summary of Learning Points 15.55 – 16.00 Course Wrap Up 16.00 – 16.05 The Sandbox 16.05 – 16.10 Next Step – Getting Help 16.10 – 16.15 Questions? 16.15 – 16.20 End of Course 16.20 – 16.30

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Welcome & Introduction

Welcome to Bank Accounting

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Practicalities

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Objective and Scope

This course will cover: A bank account business overview: The bank account statement process, bank

switching process and payment process Integration between the different financial accounting modules The bank account basic structure and the procedures of bank accounting Bank accounting key terms The bank statement process activities and their financial impact The venture bank accounting process and the financial impact of bank switching for

cash switch entries, non cash switch entries and non cash switch entries for inter funding groups

Describe the financial impact of execute the payment program Business process procedures, demonstrations and exercises for essential functions

in connection with bank accounting This course will not cover:

Travel Management, Cash Management and Exchange Rate Differences Oil and Gas Upstream Business Overview (Course: FI-0000) Financial Closing (Course: FI-2000) Business Accounting (Course: FI-3000) Asset Management (Course: FI-5000) Joint Venture Management (Course: FI-6000) Financial Reporting Tools (FI-7000)

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Course Structure and Content

Presentations Demonstrations

Exercises Business Process Procedures

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Bank Accounting Introduction

Scope This topic covers the bank account statement process, bank switching

process and payment process

Objective At the end of this topic you will be able to:

Describe the activities of the bank statement process and their financial impact

Describe the bank process and the financial impact of bank switching for cash switch entries, non cash switch entries and non cash switch entries for inter funding groups

Process incoming and outgoing payments for vendors and customers

Describe the financial impact of executing the payment program

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Bank Accounting Introduction: Agenda

BA Introduction Time

9.30 – 10.40 Bank Accounting Statement Process 20 min Bank Switching Process 20 min Payment Process 20 min Break 10 min

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Bank Accounting: Bank Accounting Introduction

The Financial Impact of Bank Switching

The Bank Accounting Statement Process

The Financial Impact ofProcessing the Bank Account Statement

The Bank Switching Process

The Payment Process

The Financial Impact ofProcessing Incoming and

Outgoing Payments forVendors and Customers

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Payment

Cash receipt AR

Cash receipt w/o clear

Cash receipt (OP Cash Call)

Bank interest

Uncleared Payment

Standing Order (fixed value)(clear recurring doc)

COST

SUSPENSE 355590 AR CLEARING

VENTURE FIRM

AP

Pyt ref, nr..

Customer, allocn key.....

With c/o for venture or use substitution based on bank acct - manual!

Separate clearing process using SEI’s....

(Reverse for bank interest earned. Same for Bank Charges)

1)

Note:The WBS need to be manually coded, so the WBS is assigned to the correct venture i.e. per the bank account

1) Venture or WBS required

Cash Receipts

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Direct Debit

Pyt ref, nr. (DME number)

Costs

Suspense 355590 AR Bank clearing

Venture bank firm

Bank Switch

Direct Debit(variable value)

Quantum

Quantum clearing

Pyt ref, nr. (DME number)

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A cash switch is a document requiring a payment. A non-cash switch does not require a payment. Payments originating from the general ledger accounts that are identified as banks by being associated with funding groups on the JV Bank Accounts screen are considered cash switches. Cash and non-cash switches are summarized and reported separately. The effective date of the summarized switches is calculated as a weighted average of the individual switches.

Cash Clerk

Cash Applications

Payment Received

BankFile

Cash Switch

Cash Movements on behalf of other

Venture or Funding Groups (e.g.

payment of a multi venture invoice)

Non-Cash Switch

Inter Funding Group allocations (e.g. Common Cost

Venture time writing to SIRI)

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Profit andLoss Vendor

30 30

30

Nini O0495XBank cl

10 1030

10 10

10

Nini O0495X

Bank firm

3010

10

3010

SIRI O0695XBank cl

SIRI O0695XBank firm

10 101010

Steps:

1 Invoice split to Nini and Siri

2 Payment run (Nini Bank)

3 Bank statement processing Nini

4 Bank Switching


6 Bank statement processing Siri

1

2

3

4

56

N

S

N

NN

N

S

S

S

S

S

N

SS

S

SSS

Check Venture

& generate

switch

Cash Switch Entries

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Non Cash Switch Entries

Steps:

1 Time writing from Common Cost (departments) to Siri

2 Bank Switching


4 Bank statement processing Siri

Balance to zero

P+LBank cl Bank firm

O0695X

Bank firmWBSP+L

20 20

INTERVENTURE

2020

1

20

2020

A

A B

D

B

C

C 20

202020 20

D2

22

43

CCOSTX

Bank cl

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The Financial Impact of the Bank Switching




Non Cash Switch Entries – Intra Funding Group

150

150

150

150

150

150

150

Cost Allocation

Bank Switch150

Note: YOU MUST NEVER CLEAR THE ITEMS BY ACCOUNT CLEARANCE - THIS PRODUCES AN INCORRECT JV DOCUMENT!

150

150

150

150

Manual post with

clearing

150

150

150

150

INCORRECT!

CCORPX N0789X

Profitand Loss Interventure Interventure

ProfitandLoss

Corp Bank cl

Corp Bank cl

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The Payment Process

JVA Partner

Cash Clerk

M T W T F S S

29 30 1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31 1 2

MAY, 2000

Payment due date

Adjustments/Analysis

Reconciliation

BS/P&L

Joint Venture Partner Record

CustomerInformation

Invoicing

Invoicing

Cash Applications

Payment Received

BanksFile

JVA Accountant

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The Payment Process

The Financial Impact ofProcessing Incoming and

Outgoing Payments forVendors and Customers

Vendor

Bank Clearing Account

Bank AccountCost

100 100

100 100

100 100

INVOICE

PAYMENT

BANK STATEMENT

The open item management and clearing is extremely important for JVA!

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Bank Accounting Introduction: Summary

You are now able to: Describe the activities of the bank

statement process and their financial impact

Describe the bank process and the financial impact of bank switching for cash switch entries, non cash switch entries and non cash switch entries for inter funding groups

Process incoming and outgoing payments for vendors and customers

Describe the financial impact of executing the payment program

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Break

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Bank Accounting: Bank Accounts Maintenance

Scope This topic covers maintenance of bank accounts


Describe the bank account structure Control the appearance of a bank account Describe the assignment of bank accounts to customer/vendor

master data Maintain bank accounts and display the bank directory

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Bank Accounts Maintenance: Agenda

Bank Accounts Maintenance Time

10.40 – 12.45 Bank Account Structure 5 min Control of Bank Accounts 5 min Difference GL and Bank Accounts 5 min Assignments to Master Data 5 min Exercise 35 min Summary 5 min Lunch 45 min

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Name and Explain theDifference between a GL

Account and Bank Account

Key Terms

Describe the Bank Account Structure

Control the Appearance ofa Bank Account

Describe the Assignments to Vendor/Customer Master

Records

Display the Bank Directory

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Key Terms

Bank Account Structure:

Joint Venture Founding Group

(FG) Founding Group

Assignments House Bank Bank Account

Bank Detail:

Bank Country Bank Name Bank Number Account Holder Control Key Bank Directory Bank Key

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Key Terms

Describe the Bank Account Structure

JV

CORPDKK Bank ActUSD Bank ActGBP Bank Act

House Bank

FIVenture

CORP

Payment Program

Venture NOP

JV

FGDKK Bank Act

USD Bank Act

GBP Bank Act

House Bank

FIVenture

SIRI

Payment Program

FGDKK Bank Act

NOK Bank ActHouse Bank

Venture NINI

FG : House Bank = 1 : 1

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Key Terms

Describe the Structure ofBank Accounts


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Key Terms

Describe the Structure ofBank Accounts


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Key Terms




Records

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Key Terms



Display the Bank Directory


Records

Transaction Code

S_P99_41000166 - Display Bank Directory

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Bank Accounts Maintenance: Exercise

Scenario Auke put exercise her!

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Bank Accounts Maintenance: Exercise Wrap Up

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Bank Accounts Maintenance: Summary

You are now able to: Describe the bank account structure Control the appearance of a bank

account Describe the assignment of bank

accounts to customer/vendor master data

Maintain bank accounts and display the bank directory

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Lunch

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Bank Accounting: Payment Processing

Scope This topic covers payment processing


Explain the payment program execution process Describe the upstream payment methods Describe the data required by the payment program Carry out postings (batch sections) and post process them Understand the payment program output

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Payment Processing: Agenda

Payment Processing Time

12.25 – 13.45 The Automatic Payment Process 5 min Upstream Payment Methods 5 min Data Required by the Payment Program 5min Demonstration 20 min Exercise 30 min Summary 5 min Break 10 min

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Describe the Data Required by the Payment

Program

Key Terms

Explain the Payment Program Execution

Process

Describe the Upstream Payment Methods

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Key Terms

Payment Program

Payment parameters

Payment proposal Payment proposal

list Exception list Payment run

Processing Parameters

Payment terms Payment block Payment methods House bank

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Key Terms


Process

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Key Terms


Process


A payment method is a procedure by which payments are made.

These methods can be utilized to pay vendors.

C Check

D Domestic payments

F Foreign payments

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Describe the Data Required by the Payment

Program

Key Terms


Process


• Address• Bank Details

• Address• Bank Details

Vendor Master RecordVendor Master Record

• Payment Terms• Payment Block• Payment Method

• Payment Terms• Payment Block• Payment Method

InvoiceInvoice

• Payment Terms• Payment Methods • Payment Block• Clear with Customer• House Bank

• Payment Terms• Payment Methods • Payment Block• Clear with Customer• House Bank

PAYMENTPAYMENT

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Payment Processing: Demonstration

Post Invoice

Check Payment ProposalLog, Proposal List and

Exception List

Create a Payment Proposal

Execute Payment Run

Set Payment Parameters

Post Cash Call

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Payment Processing: Exercise


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Payment Processing: Exercise Wrap Up

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Payment Processing: Summary

You are now able to: Explain the payment program

execution process Describe the upstream payment

methods Describe the data required by the

payment program Carry out postings (batch sections)

and post process them Understand the payment program

output

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Break

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Bank Accounting: Bank Statement Processing

Scope This topic covers bank statement processing


Explain the bank statement program execution process Handle the technical procedure for entering bank statement

manually Understand the bank statements output

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Bank Statement Processing: Agenda

Bank Statement Processing Time

13.45 – 14.55 The Execution Process 10 min Control Different Type of Bank Postings 5 min Demonstration 10min Exercise 30 min Summary 5 min Break 10 min

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Control Different Types of Bank Postings

Key Terms

Describe how to Stipulate the Account Assignment

Variants

Characterises the Bank Statement Initial Screen

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Key Terms

Bank Statement Program

Bank key Bank account


Start variant Match code ID Further processing type Transaction value date

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Key Terms


Variants

Transaction Code

FF67 - Manual Entry

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Key Terms


Variants


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Control Different Types of Bank Postings

Key Terms


Variants


Bank acct XXXXXX G/L account YYYYYY C.Code 6000 Currency DKK

Bank Statement ItemsTrans. Val.dt. Amount Doc.no. Cust. MC Alloc.051 12/23/YY 10000 180000000 AC805 Hugo

Bank acct XXXXXX G/L account YYYYYY C.Code 6000 Currency DKK

Bank Statement ItemsTrans. Val.dt. Amount Doc.no. Cust. MC Alloc.051 12/23/YY 10000 180000000 AC805 Hugo

Outgoing invoiceOutgoing invoice Outgoing invoice

Amount:

Outgoing invoice

Amount:

Outgoing invoice

Allocation: Cust. Hugo

Outgoing invoice

Allocation: Cust. Hugo

Master

Sort field: AC805

Master

Sort field: AC805

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Bank Statement Processing: Demonstration

Post Incoming Invoice

Post Outgoing Invoice

Post Bank Statement

Pay Invoice by usingManual Payments

Enter Bank Statement

Review Postings

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Bank Statement Processing: Exercise


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Bank Statement Processing: Exercise Wrap Up

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Bank Statement Processing: Summary

You are now able to: Explain the bank statement program

execution process Handle the technical procedure for

entering bank statement manually Understand the bank statements

output

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Break

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Bank Accounting: Bank Switching

Scope This topic covers bank switching


Describe the funding group structure Describe how the inter funding balance can arise Handle the procedure for venture bank account switching Describe the function of bank switching and perform bank

switching

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Bank Switching: Agenda

Bank Switching Time

13.45 – 14.55 Funding Group Structure 5min Inter Funding Balance 5 min Functions of Bank Switching… 5 min Demonstration 10 min Exercise 30 min Summary 5 min Break 10 min

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Key Terms

Describe the Funding Group Structure

Describe how the Inter Funding Balance can Arise

Describe the Function of Bank Switching

Describe when the Bank Switching Program should be Runned

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Funding Group Structure

Founding Group Founding Group

Assignments Mirror operated

venture Operated venture Non-operated

venture


Bank Switching Cash Switch Non Cash Switch

Key Terms

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Key Terms

Describe the Founding Group Structure

COST

COST

OP1

OP1

OP2

OP2

OP3

OP3

MOP1 MOP2

CORP

MOP3CORP NOP1 NOP2

CORPORATE

OPERATOR VENTURES

COMMON COST

OPERATOR (formerly Concorde)

DONG E&P Corporate (formerly ISU)

Note:

MOP = Mirror operated joint venture

NOP = Non-operated joint venture

OP = Operated joint venture

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Key Terms



Inter funding group balances can arise in two ways:

1. Inter Funding Group allocations (e.g. Common Cost Venture time writing to SIRI) – these are referred to as Non Cash Switches

2. Cash Movements on behalf of other Venture or Funding Groups (e.g. payment of a multi venture invoice) – these are referred to as Cash Switches

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Key Terms




Step 1 – Extract Venture Bank Switching View the individual line items that the system proposes for the venture bank switch Block joint venture documents for venture bank switching.

Step 2 – Venture Bank Reconciliation - Check that the bank switching will clear interventure postings in JVA Listing of all switches giving details of cash and non-cash switches, interest charges, and mean effective date “Formatted letters” to the managers of venture bank accounts, requesting a transfer of funds to other venture bank accounts. Batch input summary (name of any batch input session generated and the number of transactions included) List of errors and warnings encountered during the program run

Step 3 – Perform Venture Bank Switching Reads all documents posted during a particular period Identifies documents that involve net movements of expenditures between ventures. Each identified document is used to calculate a transfer of funds between the bank accounts associated with the unbalanced ventures I. e. any postings between joint venture funding groups

will result in an inter funding group indebtedness, which the bank switching programme will settle by a general ledger posting generating a transfer request to be sent to the bank.

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Key Terms




Describe when the Bank Switching Program should be Runned

The program should be run at least once a month. In practice it is recommended to run the bank switching after each payment run

It is possible to run the program separately for cash and non cash switches. In practice it is recommended to run cash and non cash switching together!

Therefore the execution of the bank switching program needs careful control!

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Bank Switching: Demonstration

Extract Bank Switch

Perform Venture Bank Switch

Venture Bank Switch Reconciliation

Review Postings

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Bank Switching: Exercise


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Bank Switching: Exercise Wrap Up

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Bank Switching: Summary

You are now able to: Describe the funding group structure Describe how the inter funding

balance can arise Handle the procedure for venture

bank account switching Describe the function of bank

switching and perform bank switching

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Bank Accounting: Summary of Learning Points

The bank statement entry is usually a two-step process. First, you enter the account line items in the system. Various tools are available to help you with this. You can vary the row format for entering individual transactions.In addition, the system supports individual account determination and checks data consistency. The second step is to post the line items you have entered.

All ventures belong to a funding group and each funding group will have at least one bank account. In DONG in company code 6000, each operator and common cost venture has its own funding group with a bank account. The corporate venture and the NOP and MOP ventures are all assigned to a corporate funding group and bank account. Any postings between these funding groups will result in an inter funding group indebtedness which the bank switching program will settle by a general ledger posting generating a transfer request to be sent to the bank

The venture bank account switching process is a three-step process. First you extract venture bank switching. Second you reconcile venture bank switching and at last you perform venture bank account switching

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SAP updates the General Ledger in real-time using the following elements: Customer Master Data, JV Partner Data, Invoice Processing, Cash Applications, and Reconciliation.

The high-level process flow begins with a cash call or hard copy billing to the JV partner with a payment due date. When JV partner pays by the specified date, cash is received and processed by the bank and posted to the A/R sub-ledger to clear open invoices. The bank provides a file on a daily basis that SAP will use to automatically clear joint interest receivables.

When the bank’s flat file is received in SAP, a machine generated journal entry will be made with a debit to the correct bank account and a credit to a cash clearing account. The total posted to the cash account can be matched to the cash total received by the bank. The bank will be notified in case of a discrepancy (cash posted to bank account). After the cash entry is made, its necessary to clear open receivables (debit cash clearing account, credit customer). SAP will use the invoice number transmitted by the bank to find matching entries in the customer’s account.

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Each bank transmission will produce a different set of entries and a different report. If the customer/partner does not pay on time, or the A/R department marks the invoice “open” and identifies that no payments have been made during reconciliation. The customer/partner either pays the outstanding balance in full or partial; or, the account is written off in the reconciliation process.

The reconciliation process analyzes all transactions in the period and make adjustments accordingly. During period end, a balance sheet and a P&L statement are generated to meet external reporting requirements.

The payment process is used to enable processing of both outgoing and incoming payments. It processes both Accounts Receivable and Accounts Payable. The payment program processes domestic and foreign payments for vendors and customers. It creates payment documents and supplies data to the payment medium programs. The payment medium program print either a payment list, payment forms or create data carriers such as magnetic tape or floppy disks.

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Course Wrap Up

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The Sandbox

You can practice the exercises from this course, and enhance your SAP skills by using the Sandbox Client:

Instance: srv063 Client: 150 User: SiriusXXX Password: ...

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Next Step – Getting Help

Use the Intranet Site and the SAP Library It tells you what to do, when and why It provides detailed information on how to complete SAP transactions It is an updated and validated way to get help for using SAP

Contact the Super Users Find relevant names on the Intranet

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Questions?

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End of Course

FI-4000 Bank Accounting

Documents

Transcript of FI-4000 Bank Accounting