BBP Template

SAP Implementation Project: PARINAAMBusiness Blue Print Document for Finance Bank Account

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Document History

Document NameBusiness Blueprint

TitleFinance Bank Account

Document PurposeManaging & Maintenance of Bank Accounts

Key WordsChecks Deposits , Payments , Electronic Funds Transfer, Bank Statements , Bank Reconciliation & Maintenance of Bank Accounts

Document Status

Contact for Enquiries

Process BasicsIllustrative Response

Process NameFinance Bank Management

Process NumberMHRIL-FI-02-02-109

Process Description (Brief Bullet Points) What Does the Process Do Maintaining bank master and various payment methods

Process Owner (preferably indicate the position in the organization structure rather than the name)Head Finance

Input Process Dependent BBPs AP,AR & GL

Document Sign-Off

CompanyNameDateSignature

Document Change Control

Release / VersionDescriptionDateDateSign

V1.0Bank AccountingCreated BySuanand K

Reviewed BySundar N

Approved ByKumar S

Created By

Reviewed By

Approved By

Glossary

S.NoDescriptionFull Form

1. Company CodeCompany Code is the smallest organizational unit for which a complete self-contained set of accounts can be drawn up for purposes of external reporting. Generally, a company code is defined to represent a legal entity.

2. CompanyThe Company is used in SAP to aggregate/ consolidate the financial statements for several operating companies into a consolidated statement for the group, suitable for statutory reporting. Companies can be grouped together according to legal entity structures

3. CurrencyA currency is the money in general use in a country. In Financial Accounting, a currency has to be specified for each company code. This is the local currency All other currencies are considered as foreign currency.

4. Chart of AccountsChart of Accounts is a list of all G/L accounts used by one or several company codes. For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how an account functions and how a G/L account is created in a company code.

5. House BankThe banks with which your company (company code) maintains a bank account are referred to as house banks.

Introduction

This document depicts the SAP enabled TO-BE version of the business process of MHRIL. The document contains how the process under reference will be handled in the TO-BE SAP scenario along with the business benefits and organisational changes required to implement the SAP enabled business processes. The document also highlights Bank Accounting covers the reporting requirements of MHRIL with respect to the Bank Accounting activity. These are evolved based on the detailed study of the business processes and functions of Customer and with the inputs from the series of Business Blueprint Workshops conducted for this purpose Intended UsersThis document will help: MHRIL to understand and approve the requirements and design of the proposed application, as adequate for meeting its stated business needs. TCS team to design and develop the application using the requirements as the basis, as well as to plan and manage all project resources thereof. The acceptance testing team to develop test data and to test the application. The maintenance and support team to understand all aspects of the process, application, and maintain it.This document states all of the conceptual results of the project PARINAAM. These project results were devised and decided on by the project team and the department experts from customer MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED during the Business Blueprint project phase. This is the main concept document of the project. It is supplemented by separate specifications for custom developments.The content of this document forms the basis and the guidelines for the subsequent Realization phase. This document aims to describe the future business solution based on SAP ERP. Both, IT subjects and organizational issues that are required to understand the situation, are described in it. Any additional explanations that are only relevant when the project is in progress are given in the various project management plan documents, which the project management team will provide on request. Authors and contributors can be referred to in section Document History. SAP R/3 AR/GL module provides a very wide and comprehensive range of functionality that meets the requirement of most of the enterprises worldwide. Thus there was a requirement to study the existing Finance and Reporting practices of MHRIL and map the same to the functionality provided in SAP ECC6.0 in order to evolve the Business Blue print. The main project objectives and business drivers behind MHRILs decision to implement SAP are to Streamline the processes related to Bank Accounting Process in Finance. Standardize business processes and practices. Eliminate the processes which add no value such as redundant data collections and reconciliation. Address the current and future business requirements. Capture and make available information needed for effective and accurate Finance strategies. Integrated Solution for real time accounting and enhanced reporting.

Table of Contents1.Scope51.1Business Process Master List reference51.2Scope in Brief51.3Location where the Business is performed61.4Key Policies/Operational Decisions or Logic within the Process62.Process Description / Requirements72.1Explanation of Functions and Events72.2Business Requirements93.Solution in SAP103.1Defining House Bank103.2Bank Account Operations113.3Cheque Management144.Business Process Diagram154.1Define House Banks154.2Bank Payment154.3Bank Reconcilation System164.4Cash Payment164.5Cheque Management175.Organizational Consideration185.1Organization Structure Consideration185.2System Configuration Considerations186.Changes to Existing Organization Process186.1Changes observed / Suggested187.Description of Improvements188.Functional Deficit189.Approach to Cover Functional Deficit1810.Integration & Interface Considerations1811.Reporting Requirements1811.1Standard Reports1811.2Developed Reports1912.Data Migration1912.1Data Conversion / Historical Data1913.Enhancements & Forms1913.1Functional Deficit1913.2Enhancements1913.3Outputs (e.g. Forms)1914.Authorization Requirements2015.Workflow Requirements2016.Traceability Matrix20

ScopeBusiness Process Master List referenceBPML Reference

Process Number Core Process Level-1 Process Area Level -2 Business Process Level-3Remarks

MHRIL-FI-02-02-109FICOFinancial AccountingBank Accounting

Scope in Brief

The Bank Accounting component are used for managing Bank Accounts, which includes Customer Payments, Supplier Payouts, Employee Salaries, Project Related Expenses, IPO related transactions and loans advances. Further the Scope covers the following. Creation of House Banks Account ID Mapping of GL Accounts Electronic Bank Statement Check Deposit Transactions Check Management Cash Journals

Location where the Business is performedLocation Scope covers Head office / branches / resorts of MHRIL company code and Line of Business (LOB) as defined in organization Structure.

Key Policies/Operational Decisions or Logic within the ProcessNot Applicable

Process Description / RequirementsExplanation of Functions and Events Multiple Bank Accounts By Corporate / Branches / ResortsMahindra Holidays & Resorts India Limited (MHRIL) Operating Multiple Bank Accounts in order to meet its varied banking requirements. As part of the banking operations MHRIL currently has relationship with 5 Major Banks in India and nature of account operations. Bank Accounts are opened and maintained at Corporate level which includes approval and designating authorized signatories for operating the accounts.

Payments (Suppliers, Employee Reimbursement, Credit Card Transactions etc.)1. Cash:Cash payments are made towards employee advances, expenses reimbursements and to meet ad-hoc petty expenses. Further, at times part of instalment payment or Down Payment customer remits cash payment at branch / corporate offices.When Instalments from Customers are received the following entries are posted in the system:For Creating Customer Receipt (Payment collected receipt made in the system but not deposited)Dr Deposit in Transit AccountCr Customer

The cash collected from the Customer will kept in the branch, ones the cash is deposited on the next working day the following entries are posted.Dr Bank Cr Deposit in Transit Account.

2. Cheques : Cheques are the major mode of payment & receipt, most of the supplier payments and customers remittances are transacted in Cheques.

3. Credit Card : Credit Cards Payments are received towards customer payments at Branch / Corporate / resorts / online payments. Further, as part of the monthly payments, customers make credit card payment as part of standing instructions.

When a customer remits Credit Card payment through IVR, payments are received in MHRIL bank account through the payment gate way. Upon receipt of the bank statements MHRIL finance team identifies the source and nature of transactions, and posts necessary journal entries.

For example, if the payment received is towards advance Home Stay fees,Dr BankCr Sundry Debtors Account

4. Standing Instructions through Electronic Clearing Services (ECS) :Monthly Customers Instalments are received through ECS mode of payments. This includes direct bank transfer, Debit & Credit Card payments.For Credit / Debit Card Standing Instructions, MHRIL Corporate has the facility to create the charge in slip and daily basis for the payments which are falling due and submit with the bank for payments.

5. Electronic Funds Transfer ( EFT) :EFT is mostly used for remitting Employee Salaries / Overseas /Domestic Suppliers Payments. Transfer request is manually prepared and submitted to the bank post approval, upon receipt of the same bank effects funds transfer to the appropriate accounts. Banking of Customer ReceiptsPayments received from Customers are deposited to various bank accounts and following are the procedure / process adopted: Payment Slip is prepared instrument wise and sent to the bank for depositing. MHRIL creates receipts for all cheque deposits made as per the information provided on the payment slip. Bank updates the payment slip with post realization of the instrument by updating the date of clearance. Metro and Local Cheques generally takes 2 days for clearance and Mini Metro and outstation Cheques takes 3 to 7 days for clearance. There are bank charges levied for outstation cheques, in such cases MHRIL absorbs the bank charges by taking it to P& L Account.Dr Bank ChargesCr Bank Account The bank gives credit for the entire cheque amount on the date of deposit and funds are available for utilization. However, in case of any rejection / dishonour reverse the transactions and intimate the same to MHRIL. In case of any dishonour of cheque , MHRIL reverse the receipt made with appropriate comment For receipts through credit card, ECS, EFT, MHRIL prepares a file with unique no. for every transaction and sends it to the bank. On receipt of the file the bank will match the same against the bank statement and updates the information in the same file and sends it back to MHRIL.

Reconciliation of Bank AccountsCurrently MHRIL performs Bank Reconciliation on Daily basis. Reconciliations are manually driven and carried out in MS Excel.The Daily Bank Statements are received through fax or e mail, Banking transactions are downloaded from Axapta GL and the reconciliations are carried out for open / unmatched / reconciling items.As part of the transformation to SAP, MHRIL Requires Automated.

Cash pooling Currently customer payments are received at various branches. The same is deposited to the respective bank accounts attached to the bank.Payments received from such banks are transferred to centralized bank account managed at corporateStanding Instructions provided by Corporate office to respective branch bank accounts for this funds Transfer.The transfer of cash from branch bank account takes place everyAccounting Entries for Cash Pooling which are to be mapped in SAP are Dr Corporate Bank AccountCr Corresponding Bank Account.

Business Requirements Real-time integration between AP, AR, Payroll and General Ledger Maintenance and consolidation of Multiple Bank Accounts Month End Closing & Reconciliation of Bank Accounts Facilitate in Foreign Currency Month/Quarter/Year End Closing activities

Solution in SAPDefining House BankHouse BankMHRIL currently operates multiple bank accounts. The bank accounts are opened and operated based on the transactional Requirement. The broad requirement and the name of the banks are provided below:S.NoBank NameNature of Transaction

1YES BankCapital Procurement

2ICICIPayroll

3State Bank of IndiaStatutory Payments

4CITI BankIPO related transactions

5HDFCCustomer Receipts and Vendor Payments

To facilitate Corporate / branch / resort Operations MHRIL currently has . Bank accounts opened at its branch / resort locations. Company Code: In SAP each bank account must be assigned to company code.For Example: Yes Bank Should be assigned to MHRIL Company Code (1025).

House Bank: House Bank is a 5 digit Alpha Numeric character for identifying the House bank name (e.g. Yes Bank can be termed as YESBA)

Account ID: Account ID is created to determine the nature of the transaction carried out from a particular bank account.Text: For each of the House bank account created, brief text to be provided.For example, for Yes Bank with current account operations will have the text as Yes Bank Current Account.

Bank Master Data In Bank Master following information requires to be updated, taking the above example of Yes BankBank Country: IndiaBank Key = Bank Account NumberAddress = No 18, Pattulos Road, Chennai, 600002, Tamil Nadu.

Account Data In Bank Master following Account data information requires to be updated, taking the above example of Yes Bank: Bank Account: ************* Currency: INR (Indian Rupees) General Ledger Code for Banks In Bank Master following Account data information requires to be updated, taking the above example of Yes Bank.

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 account in Indian Rupees at your bank, you must enter the currency key for this currency in the G/L account master record.For example, Yes Bank Account INR, Chennai Branch will have a G/L account .

Bank Account OperationsPayments:MHRIL currently making payments in following modes:BeneficiaryMode of Payments

Domestic SuppliersCheques, RTGS

Overseas SuppliersTelegraphic Payments

EmployeesEFT, Cheques & Cash

Customers RefundCheques

Statutory PaymentsCheques

Cash PaymentsBranch / Corporate Petty Cash Expenses

Domestic Suppliers: MHRIL Suppliers are paid towards supply of Services / Goods. Suppliers have different payment terms and payment modes.Payment run is carried out on weekly basis for remitting payments to suppliers. At times there may be a need to pay suppliers on Ad-Hoc basis. Cheques payments mailed/ handpicked by Suppliers. For Real Time Gross Settlement (RTGS), Suppliers banking details are stored in the master data and RTGS request are printed internally and post due verification and authorization submitted by fax to the bank for effecting payments.

Overseas Payments: Payments to Overseas Suppliers are effected through Telegraphic Transfer, MHRIL obtains the Rate of Exchange of prevailing on the transaction date and converts that in to Indian Rupees (e.g. US $ 1 = 49.00, US $ 500 to be remitted, in this case, INR= 2450) and record the amount as INR.When foreign currency payments are made in SAP the rate of exchange will be picked up from exchange rate table which are updated last closing date, in such case system will create exchange difference plus or minus depending on the rate at which transactions are carried out and same will get posted in the respective G/L account.

Employees Payments: Payments to employees are made towards expense reimbursements, in such cases, upon approval of employee expense, employee bank account is credited or at times cheque payments are made.

Customer Refunds: As part of Timeshare sales, at times customer requires to be paid back the payments made due to cancellation of products.During this, upon posting of required entries in financial system credit will be initiated in Customer account for refund, in such cases customer will be paid through Cheque.

Statutory Payments:Payment to Government organizations (Tax, Duties, Employee PF Payments etc.) are treated as Statutory Payments. These types of payments are paid through cheques.

Cash JournalsCertain Payments which are required to be paid for business reasons are made through this functionality. The nature of disbursement could be towards employee advances & reimbursements, Ad-Hoc petty Expenses, low value expenses which cannot be processed through cheques, Payments to Administration related expenses or at times temporary staff salaries like Drivers, Janitorial payments etc.,

In Cash Journals supports in define the nature of expenses to which reimbursements can be made.Cash Journals supports in making journals for the payments made further facilitates in park & post option.

Cash Journal for all the branches is to be activated. Example Cash Journal for Delhi 1 branch BDL1.

Reconciliations Currently MHRIL performs Bank Reconciliation on Daily basis. Reconciliations are manually driven and carried out in MS Excel.The Daily Bank Statements are received through fax or e mail, Banking transactions are downloaded from Axapta GL and the reconciliations are carried out for open / unmatched / reconciling items.As part of the transformation to SAP, MHRIL Requires Automated.

Bank Reconciliation in SAP:In SAP system the reconciliation process is known under two methods, viz. Manual and Automatic.System provides list of un-reconciled entries, for further decision making and matching.Every Bank account will have 3 General Ledger Accounts. First will be a Main GL for the bank, second will be Incoming clearing for all receipts, third will be Outgoing Clearing for all Payments. After the reconciliation process, payment and receipt entries in the incoming, outgoing and un-reconciled GL will be transferred in to the bank Main GL.The balances in the main bank account will be equal to the bank statement amount.The bank book balance shall be equal to the net balance of the all four bank GLs put together.Manual Bank reconciliation Process (Non-electronic bank statement)In case of Non-Availability of bank statements in the desired electronic formats, we can create and upload Bank statement manually.Every bank statements that are entered will be per bank account number and are identifiable by a unique number and statement date to be provided by the user.In the header data, Bank statement opening balances and closing balances are provided before creating the bank statement. This is the control check after entering all the lines in the bank statement.After providing the bank statement header data, create the bank statement in the system. The bank statement data can also be copied from an excel file to create the bank statement in the system.The system then automatically makes the postings to the bank account, bank clearing account along with the payment clearing. We have two options here:Immediate PostingCreate a batch input session, and then run it.The posting of this statement or after batch input session. This process creates postings in the main bank account. The accounting entries are passed as mentioned below.Dr Main Bank A/cCr Incoming Clearing A/cDr Outgoing Clearing A/cCr Main Bank A/cUnmatched entries generated by the system are to be matched manually through (FEBAN). Later on these unmatched entries need tobe manually transferred to Unreconciled Account.

Electronic Bank reconciliation Process: For the process of automatic bank reconciliation, electronic bank statement is required in pre defined format only.This format can be either in multicash or MT940.Uploading the bank statements received from banks in the above mentioned format. After the uploading of this statement, the process creates postings in the main bank account. The accounting entries are passed as mentioned above.The un-reconciled items will remain as open items in unreconciled accountwhich can be reconciled manually.

Reprocess Un-reconciled items (FEBAN)Through this session we can clear the un-posted (un-reconciled) items from the above mentioned manual & automatic processes.The session enables us to select any of the bank statements created by us based on statement date and identification key.Correct the selected items one after another. At the end, post again for all changed items.

Pay in Slip Reconciliation:For the Deposits made through pay in slip MHRIL Receives consolidated credit from bank.Bank marks the cheque clearance date on the pay slip provided by MHRIL.With information provided by the bank, MHRIL reconciles with the deposited amount and allocates to customer account based on the pay in slip information.

Intra Company Collections:As per the existing Business Process, Payments relating to other branches are received in Corporate office or other branches of MHRIL.When this type of transaction occurs the receiving branch accountant is posting following entries:Dr Branch Bank Cr Customer.In SAP posting of above entries to be enabled with entry of respective profit center.

Cheque ManagementThe check management functions help you to manage both pre-numbered checks and those checks assigned numbers from your own number ranges.In MHRIL cheque numbers are based on the numbers provided by the bank and which are assigned to sequentially to transactions.For cash withdrawal, self cheque can be printed.

Cheque Number Lots: Checks supplied by a bank are usually divided into lots. In the SAP System, a check number range represents a batch (lot) of numbered checks.In the Financial Accounting Configuration menu, you must define check lots (number ranges) that correspond to the actual check lots.

Cheque Void & Re-IssueCheques issued which are not honoured by the bank for the following reasons:1. Cheque issued with incorrect information 2. Cheque issued with wrong beneficiary3. Cheque Stolen4. Cheque is not in acceptable/mutilated shape for presenting to the bank 5. Stale cheque (beyond 6 months from date of issuance)System will be enabled in voiding the cheque, reversing the earlier cheque issued and system should facilitate to issue fresh cheque by creating fresh accounting entries.

For Reversing the cheque accounting entries areDr Bank Cr Vendor For re-issuance of chequeDr VendorCr Bank.

Manual Cheque EntryIn MHRIL, at times Checks issued manually. This requires to be dealt with separately in order to create a link between the check number and the payment document. In order to keep the use and management of manually created checks separate from those created automatically, a separate number range should be reserved for them.

Business Process DiagramDefine House Banks

Bank Payment

Bank Reconcilation System

Cash Payment

Cheque Management

Organizational Consideration0. Organization Structure Consideration Company Code Chart of Accounts0. System Configuration Considerations Vendor master Customer masterChanges to Existing Organization Process0. Changes observed / Suggested For the Deposits made through Pay in slips, Instrument-wise credit should be provided by the bank. Bank Statements are received manually; to receive the same through electronic mode, which will facilitate in auto reconciliation process.Description of Improvements Auto reconciliations Caters reporting in Multiple accounting books ( Depreciation Area) Company , IT & IFRS Park & Post Invoices facilitates in maker & checker process Workflow for Approval Close integration with SD, MM, PS, CO & GLFunctional DeficitReconciliations Processes are manually driven.Approach to Cover Functional DeficitSAP Standard Feature (Auto Reconciliation) will address the existing Deficits.Integration & Interface ConsiderationsThe FI-BL component is integrated in numerous ways with other SAP components such as Materials Management (MM), Project Systems (PS), Sales & Distribution (SD) and Controlling (CO) module.

The integration of Bank Management with the FI (Financial Accounting, including General Ledger, Accounts Payable and Accounts Receivable).

Interfaces

Sl.No.DescriptionInterface MethodApplicationsData ElementsFrequency / VolumesOwner

Reporting Requirements0. Standard ReportsSl. NoRequirementsSAP reports

1Cheque RegisterS_P99_41000101

2Bank Balances GL Code wiseS_ALR_87012277 S_ALR_87012301

3Cheque Number RangeS_P_99_410000102

4Print Cash BookS_ALR_87012309

5Cashed Cheque per Bank AccountS_ALR_87012348

6Outstanding Cheque Analysis Per GL accountS_ALR_87012349

0. Developed ReportsReporting

WWRICEF-IDDescriptionReport Type (ABAP, BI, BOBJ)Data ElementsRelevant KPIOwner

Cheque FormForms

Payment Advice

Data Migration0. Data Conversion / Historical Data Master Data: For historical data, template will be shared for all master data via GL Accounts by TCS and the data will be given by MHRIL. TCS will map the same in the SAP. For all current transactions, all the Master Data will be created directly in SAP R/3 by the MHRIL Business Users. Transaction Data: Trial balance upload and the cut off usually will be the month endEnhancements & Forms0. Functional DeficitNil.0. EnhancementsNil.0. Outputs (e.g. Forms)Output / Forms

WRICEF-IDDescriptionData Object (Sales Order)Output Type (Form, EDI, etc.)FrequencyVolumesOwnerAttachment

XX-xx-O001Cheque Forms

XX-xx-O002Payment Advice

Authorization RequirementsD Direct fit, W Work around, N Not in SAP, C Customization

ActivityData InputData OutputResponsibility / AuthorizationRemarksProcessing System (SAP, Non-SAP)

Bank Account CreationNew Bank Account DetailsNew Bank AccountTo be definedSAP

Bank Account ClosureClose the bank account in SAP Bank Account status changed to closedTo be definedSAP

Bank Account MaintenanceChange of signatory, change of addressAmendment to bank informationTo be definedSAP

Extract of Bank Statement from Bank siteBank Account informationBank StatementTo be definedSAP

Effecting Stop Payment Information to the bankPayment VoidTo be definedSAP

Reconciliation of bank AccountsBank Statement and GL Reconciliation of AccountsTo be definedSAP

Review and Approve ReconciliationReconciliation validationReconciliation CompletedTo be definedSAP

Workflow RequirementsNil.

Traceability MatrixKPMG Process MapTCS-MHRIL BBP

Process No.Process TitleBBP TitleProcess No.Process TitlePage No

3.1Opening of Bank AccountBA3.1Defining House Bank11

3.3Bank PaymentsAP3.10Vendor Payments18

3.4Physical Control of ChequesBA3.3Cheque Management16

3.5BRSBA3.2.3Reconciliations14

Mahindra Holidays & Resorts India LimitedTata Consultancy Services Limited

Project: PARINAAM MHRIL-TCS CONFIDENTIAL Page 2 of 9