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Derive Greater Value from Little-Known SAP Electronic Bank Statement Functionality Jaime Ryan e5 Solutions Group © 2009 Wellesley Information Services. All rights reserved.

Speaker Bio •

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Jaime Ryan has been successfully implementing the electronic bank statement solution for more than 14 years at client sites across North America, Latin America, Europe, and Asia-Pacific. He was the first in North America to pilot the BAI/BAI2 Bank Statement format He continues to be one of North America’s leaders in SAP Treasury implementations and recommended by SAP Jaime Ryan helped co-found the e5 Solutions Group in early 2001 after being a Platinum Consultant with SAP America

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In This Session … •

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We’ll address some of the issues facing companies who want to reconcile and apply cash automatically Œ Such things include generic coding by banks and little or no remittance details from sender Our solution will be to explore advanced configurations such as search strings and enhancement programming With these new tools your organization will be able to explore possibilities for increasing hit ratios on your bank statement processing Adding value back to the organization by increasing the timeliness of reconciling or applying cash and reducing the overall number of hours required each month to manually handle such processes 3

What We’ll Cover … • • • •

An introduction to electronic bank statement (EBS) Understanding the basics of how EBS works Leveraging advanced EBS configuration and enhancements Wrap-up

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Electronic Bank Statement’s Place in the SAP Treasury Applications SAP Treasury Applications Analyzers Credit Risk

Money Market

Market Risk

Transaction Manager Securities Foreign Derivatives Exchange

Cash Management Liquidity Planner

Elec. Bank Stmt Banks

In-House Cash

Financial Accounting (FI) Controlling (CO)

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Electronic Bank Statement’s Place in SAP Financials Electronic bank statement is now part of SAP Financial Supply Chain Management (SAP FSCM) Strategic Enterprise Management

Stakeholder Relationship Management

Strategy Management

Business Analytics

Financial Analytics

Customer Relationship Analytics

Supply Chain Analytics

Human Resource Analytics

Product Lifecycle Analytics

Financial Statements

General Ledger & Sub Ledgers

Revenue & Cost Accounting

Order & Project Accounting

Product & Service Cost Calculation

Accounting Financial Supply Chain Management Corporate Services Financial Portal Solutions Technology Solutions

Credit Management

Electronic Bill Presentment & Payment

Real Estate Management

Manager Self-Service

Performance Measurement

Dispute Management

Strategic Planning & Business Consolidation Simulation

In-House Cash

Travel Management

Cash & Liquidity Management

Treasury & Risk Management

Incentive & Commission Management Corporate Finance Portal

SAP Technology Infrastructure (SAP NetWeaver®)

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Electronic Bank Statement Implementations •

Sample listing of companies who successfully implemented electronic bank statements Advanced Medical Optics (AMO)

Discovery Channel

Owens-Illinois

Air Products

Dyno Nobel

PayPal

Ashland Inc.

GATX Corporation

PQ Corporation

BASF Corp.

General Mills

Procter & Gamble

Brown-Forman

MeadWestvaco

Sun Chemical

Bunge

Miller Brewing Co.

SC Johnson

Burger King

Microsoft

Toro

Colgate-Palmolive

Nike

TransAlta 7

Electronic Bank Statement Overview •

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EBS functionality was designed to help companies automate bank account reconciliations Focus on shifting from manual processing of paper-based monthly statements to automated daily statements Single user interface and ability to standardize via “rules-based” processing Multiple banks and formats supported

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Business Challenges for Your Organization • • • •

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Overwhelming number of external bank accounts High volumes of transactions Cash sweeps intercompany loans Monthly paper bank statements ΠUsually arriving after month-end close Manually intensive accounting

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Benefits of Electronic Bank Statement •

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Gain greater control over bank reconciliations through online statement processing Increase timeliness of cash application through daily statements Enable higher accuracy of postings Increase efficiency/productivity through automation and standardization

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What Types of Transactions Can EBS Handle? •

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Reconciliations of items initiated from SAP ΠCheck payments including updating check register ΠElectronic payments ΠLockbox deposits ΠCustomer collections debits ΠCash concentration sweeps Reconciliation/cash application of items not initiated in SAP ΠCustomer deposits/receipts ΠRejected/returned payments ΠSupplier direct debits ΠMiscellaneous debits and credits ΠTarget balance sweeps 11

What We’ll Cover … • • • •

An introduction to electronic bank statement (EBS) Understanding the basics of how EBS works Leveraging advanced EBS configuration and enhancements Wrap-up

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Bank Account Structures in SAP Company Code Œ Within SAP ERP, the Company Code was intended to represent a “legal entity” House Bank and Account ID Œ House Bank = Bank Branch Œ Account ID = Bank Account General Ledger (GL) and Subledger Accounts Œ GL = Cash, Cash Clearing Œ Subledger = Customers, Vendors Note! In the real world, a bank account can belong to only one legal entity, therefore SAP ERP was designed around the concept of a unique bank account being set up only once in one particular company code. 13

Bank Account Structures in SAP (cont.) Bank Number and Bank Account Number combination must be unique to one company code

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Bank Account Structures in SAP (cont.) Company Code 1

Company Code 2

House House Bank Bank

House House Bank Bank

Bank Number

Bank Number

Acct Acct ID ID

Acct Acct ID ID

Account Number Currency GL Account

Account Number Currency GL Account

Payment Payment Item Item Main Bank Account Clearing Acct 1 Clearing Acct 2 Clearing Acct 3 Clearing Acct 4

GL GL Account Account (Chart (Chart of of Accounts) Accounts)

Payment Payment Item Item Main Bank Account Clearing Acct 1 Clearing Acct 2 Clearing Acct 3 Clearing Acct 4

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Bank Statement Postings

Posting Area 1

SAP FI Accounts Receivable SAP FSCM In-House Cash SAP FS-CML Loans Mgmt Other …

Posting Area 2

Cash Management Bank Statement

SAP General Ledger

Bank

Bank statements have two functional abilities per transaction known as “posting areas” 16

Posting Logic of SAP Banking Transactions Example 1: Outgoing Payment (1a) Invoice (1b) Payment Run (1c) Bank Statement

Example 2: Incoming Payment (1a) Invoice (1b) Bank Statement (1c) Cash Application

Vendor

Outgoing Clearing

Disbursement Account

100 (1a) (1b) 100

(1c) 100

Customer

100 (1b)

Unapplied Cash

100 (1c)

Main Account

(1a) 100 100 (1b) (1b) 100 100 (1c) (1c) 100

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How to Process Exceptions Transaction Code FEBA/FEBAN

Bank Statement Bank Number: Statement No:

0213783893 256

Bank Account: Statement Date:

7328793 03/16/2009

Statement Item: 00001 Bank Trans. Code: 475 Note to Payee: Check Number 0002095353

Status: POSTED Algorithm: 011

Statement Item: 00002 Bank Trans. Code: 475 Note to Payee: Check Number 0001098723

Status: POSTED ON ACCOUNT Algorithm: 011 Posting Rule: ZNCK

Posting Rule: ZNCK

Statement Item: 00003 Status: TO BE POSTED Bank Trans. Code: 399 Algorithm: Posting Rule: Note to Payee: Returned Check Number 0001073783 18

How to Process Exceptions (cont.) Transaction Code FEBA “Classic View” 1

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How to Process Exceptions (cont.) Transaction Code FEBA “Classic View” (cont.) 3

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How to Process Exceptions (cont.) Transaction Code FEBAN “New Design” 1

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Greater selection parameters than with the “classic” FEBA! Ability to change “standard tree” to your own “tree” Œ See SAP Note 494777

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How to Process Exceptions (cont.) Transaction Code FEBAN “New Design” (cont.) 2 •

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Two new views including flexible List Viewer Ability to edit fields and post in mass 3

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Ability to change “standard tree” to your own “tree” (see SAP Note 738353) 22

Electronic Bank Statement Basic Configuration Company Code 1 House House Bank Bank Bank Number

Acct Acct ID ID Account Number Currency GL Account

Assigned to Bank Number & Bank Acct Combo

Transaction Type Bank Bank Transaction Transaction Code Code Example: 495 Outgoing Wire +/- sign Algorithm Posting Rule

Posting Posting Rule Rule Payment Payment Item Item Main Bank Account Outgoing Clearing

Posting Area 1 Payment Payment Item • Credit posting key Item • Account Symbol 1 • Debit posting key • Account Symbol 2 Posting Area 2 : 23

Electronic Bank Statement Basic Configuration (cont.)

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Electronic Bank Statement Basic Configuration (cont.) 1

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What We’ll Cover … • • • •

An introduction to electronic bank statement (EBS) Understanding the basics of how EBS works Leveraging advanced EBS configuration and enhancements Wrap-up

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Leveraging Advanced EBS Configuration and Enhancements 1. 2.

Advanced Configuration Programming Enhancements

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How Do We Deviate from Default Configuration? • • • • • •

How can we switch an algorithm? How can we switch a posting rule? How can we switch or change an account? How can we add a cost center or other field value? How can we correct the check number? How can we correct a customer invoice number?

Answer: Search String Pattern Configuration

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How Search String Patterns Work Example: Switch Posting Rule for old legacy checks

Check 000200321

Check 0001098723

Basic configuration assigns standard Posting Rule for check clearing

Posting Rule: ZNCK DB CR

New Check Clearing Main Bank Account

Posting Rule: ZLCK DB CR

Legacy Check Clearing Main Bank Account

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How Search String Patterns Work (cont.) Example: Switch Posting Rule for old legacy checks (cont.)

Pattern Definition Name: LEGACY_CHECK Search for: 0001######

Pattern Assignment Assignment: CoCd, House Bank, Acct ID, BTC, Algorithm, +/Target Field: Posting Rule

Bank Statement Bank Number: Bank Account: Statement No:

0213783893 7328793 256

Statement Item: Bank Trans. Code: Algorithm: Posting Rule:

009 475 011 ZC10 ZLEG

Note to Payee: Check Number 0001098723

Target Value: ZLEG 30

How Search String Patterns Work (cont.)

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How Search String Patterns Work (cont.) Example: Switch Posting Rule for old legacy checks 1

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How Search String Patterns Work (cont.) Results: Switch Posting Rule for old legacy checks (cont.) 1

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How Search String Patterns Work (cont.)

Additional Target Fields for improving the automation and accuracy of postings to the general ledger and subledgers

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How Search String Patterns Work (cont.) •

Test your Pattern Searches using existing bank statements in the SAP ERP system

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How Do We Deviate from Default Configuration? What if the Search String Pattern is not enough?

Answer: Programming Enhancements

Custom programming should be designed by only experienced resources, as a poor design or coding can negatively impact performance, functionality, and even the integrity of the data. 36

Leveraging Advanced EBS Configuration and Enhancements 1. 2.

Advanced Configuration Programming Enhancements

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Types of EBS Programming Enhancements Enhancements – Technical types Œ Customer Exits Œ Business Transaction Events (BTEs) Œ Business Add-Ins (BAdIs) Interpretation enhancements Œ Occur during the RFEBBU10 “interpretation” logic and used to prepare the item for posting in area 1 and area 2 Posting enhancements Œ Occur during the RFEBBU00 “posting” logic and used to prepare the item for posting in area 1 and area 2

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Interpretation Enhancements •

Publish and Subscribe BTE 2810 Œ

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Process BTE 2820 and BAdI CHANGE_DATA Œ

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Ability to change data within the statement item before pattern search

Non-SAP Algorithms Œ

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Used to determine which application is to be used for posting areas 1 and 2

Ability to create/change A/R Payment Advices to apply cash to customers

Customer Exit ZXF01U01 and BADI2 CHANGE_DATA Œ

Ability to change data within the statement item after pattern search

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Posting Enhancements

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Process BTE 2810 Œ

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Used to post bank statement item in SAP non-Financial Accounting (SAP FI) module f Examples include In-House Cash (FSCM-IHC).

BADI CHANGE_POSTING_DATA and FEBCL function modules Œ

Ability to change posting data for FB01 and FB05 transactions 40

What We’ll Cover … • • • •

An introduction to electronic bank statement (EBS) Understanding the basics of how EBS works Leveraging advanced EBS configuration and enhancements Wrap-up

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Resources •

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SAP www.sap.com Œ White Paper “mySAP™ ERP FINANCIALS AT BROWNFORMAN” f www.sap.com/usa/industries/consumer/pdf/CS_mySAP_ERP _Financials_at_Brown_.pdf Œ FEATURES & FUNCTIONS: SAP ERP Financials TREASURY APPLICATIONS f www.sap.com/usa/solutions/business-suite/erp/financials/ featuresfunctions/treasury_applications.epx Americas’ SAP Users’ Group Œ Treasury Special Interest Group (SIG) f www.asug.com ƒ Requires user name and password for access e5 Solutions Group f www.e5solutions.com 42

7 Key Points to Take Home Electronic bank statement (EBS) within SAP ERP • • • • • • •

Companies can reduce costs through automation and increased efficiency Companies can increase accuracy and reduce month-end closing times Used primarily for bank reconciliation and cash application, though it can also post to SAP non-FI applications (e.g., FS-CML) Flexible for multiple banks and bank formats Single user interface and ability to standardize via “rules-based” processing Search strings configuration where necessary to deviate from basic config Enhancements (Exits/BTE/BAdI) for enriched interpretation and posting 43 43

Your Turn!

How to contact me: Jaime Ryan [email protected] 44

Disclaimer SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver®, Duet™, PartnerEdge, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled by SAP.

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