Answer Posted / hannah
Hi,
Bank Reconciliation
The Bank reconciliation process is based on the entries
passed through the Bank sub account and main account. The
process is dependent on the Bank Statement received from the
Bank that will be entered into SAP. Accounting rules are to
be defined for each transaction type and posting rule for
posting accounting entries as per bank statement. Bank
statements to be uploaded into SAP.
Bank Main account balance is the actual balance as per the
bank statement whereas the Bank sub accounts denote the
reconciliation items. These sub accounts show those entries,
which will flow from the sub account which are not cleared
in the bank statement.
Adding or subtracting the Bank sub accounts will help in
preparing the Bank reconciliation statement.
The following scenarios would explain the reconciliation
process:
- Cheque received from customer
- Cheque issued to vendors
- Cheque received from Other than Customers
- Direct Debits in Bank Statement
- Direct Credits in Bank Statement
- Fund Transfer between Bank Accounts
1) Cheque Received From Customer
Accounting entry at the time of cheque deposit entry
Bank Cheque deposit account Debit
Customer Credit
Accounting entry after cheque has been cleared in the Bank
statement Main Bank account
Debit Bank
Cheque deposit account Credit
The clearing criteria for updating the bank main account and
bank sub account will be amount and document number which
will be captured in the allocation field of the bank sub
account. The items, which have not been cleared in the bank
statement, will remain open in the bank sub account and will
form part of the bank reconciliation statement.
2) Cheque Issued To Vendors
Accounting entry at the time of cheque issue
Vendor account Debit
Bank cheque payment account Credit
Accounting entry after cheque has been presented in the Bank
Bank cheque payment account Debit
Main Bank account Credit
The clearing criteria used for updating vendor account and
Bank cheque payment account will be amount and cheque
number. The cheques presented to the bank and are cleared
are transferred to the bank main account. The remaining
cheque issued will form part of the bank reconciliation
statement.
3) Direct Debit In Bank
Direct debit instructions will be given to the bank for
example, LC payments or certain bank charges are directly
debited in the Bank Statement. In this case accounting entry
is passed only after the entry is passed in the bank statement.
Vendor / Expense Account Debit
Bank clearing account Credit
4) Direct Credit In Bank
Customer receipts are sometimes directly credited in Bank.
E.g. export receipts. In this scenario accounting entry is
passed only at the time of bank statement entry. The
following accounting entry is passed
Bank clearing account Debit
Customer account Credit
Main Bank A/c Debit
Bank Clearing A/c Credit
5) Bank Fixed Deposits
HZL has a practice of converting any amount above Rs. 1
crore in its Main bank account, to a fixed deposit subject
to a minimum of Rs. 1.01 crores. The FDR number can be
filled in one of the fields available in the accounting
document.
6) Cheque Management / Cheque Printing Cum Advice
The function of cheque management will enable printing of
cheque through SAP. Cheque series will be defined for a
combination of a Company code and Bank Account. Cheque
numbering will be sequential order.
Cheque series for automatic payment has to be in sequential
order. Cheque printing facility will be available for the
bank account.
7) Cash Management / Liquidity Analysis
The day-to-day treasury process in a company includes a
number of transactions. This includes determining the
current liquidity using bank account balances (cash
position), determining open receivables and liabilities
(liquidity forecast), manually entering planned cash flows
(payment advice notes), through to clearing bank accounts,
that is, collecting multiple bank account balances on one
target account.
The main objective is to ensure liquidity for all due
payment obligations. It is also important to control and
monitor effectively the incoming and outgoing cash flows.
This section shows you the overall liquidity status of your
company by displaying together the cash position and the
liquidity forecast. The cash position is used in Cash
Management to show the value-date-dependent bank accounts
and bank clearing accounts, as well as the planned cash
flows (payment advice notes). The liquidity forecast
comprises the incoming and outgoing cash flows, as well as
the planned items on the sub-ledger accounts.
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