Sap Banking Functional

overview of banking

Prepared by Rambabu Namamula E-mail:meghanasreram

Definition of banking :

Roles of Banks:

Intermediation:

Credit risk, liquidity risk,interest rate risk

Payment system:

Financial services:

Banking a business of trust:

liquidity, safety, profitablitiy, secrecy, service quality.

Banking services and products:

1. payment and remittance services

cheques, payorder,demand draft, multi city cheques, electronic funds transfer,debit cards, credit cards, charge cards, travel cards.

2.collection servies

transfer, localclearing, electronic clearing system, cheque collection, national clearing, cash management, service, Bill collection

Foreighn exchange:

Deposit services:

current accounts, saving accounts, fixed deposit accounts, recurring deposit accounts.

Loans or Credit services:

retail loans, personal overdrafts,credit cards, business cards, credit cards, business credit, term loans, leasing, working capital facility, overdraft, cash credit,packing credit,demand credit loans and lines of credit, business card, post sale finance, checque purchase, bill purchase, bill discount, letter of credit, bill negotiation, guarantees.

Distribution:

mutual fund units, insurance products,government bonds, stamp paper, gold coins, mobile phone recharge, share of companies offering public issues.

collection of taxes and bills:

taxes utility bills

demat accounts

safe keeping

safe deposit vaults, safe custody advisory service, investment advice

Types of customers:

individuals, mandate holder,nomination, joint accounts,minors,illiterates,deaf and dump,blind, aged persons,operation of bank accounts of illiterate customers,operation of bank accounts of sick/old/incapacitated customer, executor and administrator,proprietorship concerns,partnership firms, joint stock companies,hindu

undivided family, truests, societies and associations, clubs, self help groups, government departments and municipal bodies,

Types of deposits

demand deposits, savings accounts,current accounts, term deposits, two in one account, features of two in one account, recurring deposits.

Account opening:

customer, KYC policy,customer acceptence policy, customer identification procedure, monitoring, risk management, KYC documentation,verfication of documents.introduction, financial inclusion,opening accounts of individuals, accounts of proprietory concerns, accounts of partnership firms, accounts of companies,accounts of societies and associations, accounts of trusts, general precaution,

Banker customer relationship:

debtor-creditor, pledgee-pledger,agent-principal,agentof rights and obligations,right of general lien,right of set off,right of appropriation,obligation to maitain secrecy of account information, extent of secrecy, disclosure autorized by law,disclosure permitted as per banking practice.

Account operations:

credits,debit, negotiable instruments act, promissory notes, bills of exchage, cheques, characteristics of a negotiable instrument, consideration, transfer by endorsement and delivery, holder

cheques: features of cheques, date and period of validity,payee,amount, signatures, cheques of partnership firms,cheques of limited companies, printed forms, endorsements ,crossing of cheques, general crossing, special crossing, who may cross, material alterations, liability of drawer for non-payment of cheque, payment of cheques, scrutiny of cheques, multilation, crossing, date, payee,amount in words and figures should tally, aiteration of the cheque, available balance,signature of the customer, payment at the brancch where the account is held and anywhere banking, bearer/order cheques and endorsements, presentment within banking hours, cheque stopped by drawer, payment of high value cheques, returns of a cheque financial reasons, insuffcient funds, exceeds arrangement,effects not cleared, technical reasons, return timings and returns memo, wrongful dishonour of cheque, protection to due course, apparent tenor of the instrument, negligence, under circumstances whcih do not afford reason to doubt the payee,

collecting banker, special requests, transfer of account, addition of name, closure of an account, at the bank instance, at the request of the customer

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Definition and nature of insurance

Evolution of insurance

Role and importance of insurance

Insurance contract and principles of insurance

Kinds of insurance

Nature of life insurance contract

Classification of policies

Annuities

Selection of risk

Measurement of risk and mortality table

calculation of premium

Treatment of sub-standard risks

The reserve

Investment of funds

Surrend value

Valuation and surplus

policy condition

life insurance for the under privileged

progress of the business of LIC

Accounts of life insurance company

Marine Insurance

Nature of marine insurance contract

marine insurance policies

An overview of banking

Types of customers

Types custmers

Types of deposit accounts

Account opening

Banker customer relationship

Account operations

Cash operations

Cheque collection services

Payments nand remittance services

Cash management service

Bills collection services

Inter-bank settlements

Financial services

Operations management

Retail credit

Business credit

Rural Finance

Foreign Exchange

International Banking

Treasury Management

Customer service

Marketing

Regulatory environment

Monetary policy

Trends and challengee in banking

Financial accounting

Business mathematics

SAP IS-Treasury and Risk management online Training

Hi sap friends I am giving sap Treasury and Risk management online training if anybody interest to learn please contact me below e-mail

[email protected]

Start date: 14032014

Treasury and risk management overview:

Functional view of the treasury and risk management process Treasury department view ,transaction manager market risk management credit risk management

Core treasury process:

money market process foreign exchange process commodity process security trading process derivative process

Risk management process overview:

market risk analyzer process credit risk analyzer process portfolio analyzer process accounting analyzer process hedge and exposure management process

General master data

set up house bank setting process the sap business partner explain the role types defined in the business partner and create business partner relationships set up standing instructions and defined authorizations for the business partner

Transaction manager money market trading :

Introduction to money market, money market trading functions, middle office functional, bank office functions accounting functions payment program valution special functions cash management integration

Transaction manager foreign exchange trading

Introduction to money foreign exchange trading, front office functions, foreign exchange accounting functions, currency valuation functions

Transaction manager :derivative trading

Introduction to derivative financial instruments, controlling exchange rate risks using otc

currency options, controlling interest rate risks using derivatives, controlling interest and FX risk.

Transaction manager : commodity trading

introduction to commodities, commodity specific master data, commodity trading function, margin management,

Transaction manager : hedge management

Transaction manager : securities management

Securities management overview, master data, trading and middle office functional, accounting and closing operations, position management,

Market data management

Analyzer basic settings : overview risk management, analysis strcture and basic settings evaluation types,

Market risk analyzer : NPV/sensitivity analysis, value-at-risk evaluations results data base,

Credit risk analyzer:Credit risk analyzer functional,Credit risk analyzer process, Credit risk analyzer basic terms

Skype: Rambabu.namamula

E-mail: [email protected] IS-Treasury and Risk management online Training


[email protected]







market risk analyzer process credit risk analyzer process portfolio analyzer process

accounting analyzer process hedge and exposure management process

General master data







Introduction to derivative financial instruments, controlling exchange rate risks using otc currency options, controlling interest rate risks using derivatives, controlling interest and FX risk.













[email protected]








General master data




















[email protected]








General master data




















[email protected]








General master data














Analyzer basic settings : overview risk management, analysis strcture and basic settings

evaluation types,






[email protected]








General master data




















[email protected]








General master data




















[email protected]








General master data










SAP IS-Treasury and Risk management online Training


[email protected]








General master data


















E-mail: [email protected] manager : securities management







E-mail: [email protected]

Configuring Lockbox for Cash Application in SAP FICOPrepared byRambabuThe United States, unlike much of the world, still relies heavily on paper checks for payments. In order to facilitate internal control and to streamline processing, many companies utilize a lockbox service at a bank. In this article, we’ll examine the process flow for cash application via lockbox, discuss a few keys to success, and then examine the configuration and technical details in SAP.

Lockbox Process

• A customer orders products from a company. The company sends the products to the customer.

• The company invoices the customer. On the invoice, the vendor includes a voucher. The voucher includes the invoice number and customer number.

• The customer mails their check with the voucher to the bank that the lockbox is setup with.

• The bank deposits the cash. The bank’s staff will capture the information off the customer’s check, possibly the information on the voucher, and possibly an image of the check.

• The bank sends the company a file with all of the captured payment information.

• The company uses the payment file from the bank in order to apply payments against the customer invoices.

• Any errors during step 6 must be manually researched and resolved.

BAI2 Overview for SAP Lockbox

Setting up lockbox processing starts with getting a correctly formatted file. SAP requires the file to be formatted in what it calls the BAI2 format. This is not the BAI2 layout that the rest of the world considers the BAI2 format. It is the BAI2 format for lockboxes. SAP thankfully gives us the layout for the file, but not a lot of detail about what is going on. From the help documentation in FLB2, we see that the layout of the file is contained in tables FLB*

Lockbox_Record_Layout_Help

You can view the fields in each of those tables to see what fields should be contained in the file. The lockbox file if a fixed width text file. Even if the field is not being used, spaces should be added to the field. All of the meat of the file is in record types 5, 6, and 4. Record type 5 contains the lockbox information, record type 6 contains the check information as well as any invoice numbers that are being cleared. Record type 4 is an overflow of record type 6 and is used for adding additional invoices if they do not all fit in record type 6.

An example of the layout from the SCN wiki is below. You can see that the record type is the first digit of each line.

BAI2 Lockbox Format Example

This workbook details what each field does in each record type. Note that I had to work this out by reading the ABAP of RFEBLB20, so be aware that it may not be exactly perfect, but it’s a very good start.

Some banks are able to actually send the file in the correct format. Other banks are not able to do so and instead a custom program will need to translate the file out of the bank’s format and into the BAI2 lockbox format that SAP expects.

SAP Lockbox Configuration

The first step in the configuration is to set the control parameters for lockbox processing. This step is usually already done by default in most ECC 6.0 installations, but you should double check the settings.

SAP Lockbox Control Parameters

The most important setting here control the postings in the lockbox process. The standard set of journal entries are:

Dr Bank Account

Cr Incoming Payments

Dr Incoming Payments

Cr Customer Account

The settings in this config screen will determine how and if the postings are made. Have a look at the help text for each for more in depth discussion. The next screen has the setup for each individual lockbox.

SAP Lockbox Control Parameters

The most important setting here control the postings in the lockbox process. The standard set of journal entries are:

Dr Bank Account

Cr Incoming Payments

Dr Incoming Payments

Cr Customer Account

The settings in this config screen will determine how and if the postings are made. Have a look at the help text for each for more in depth discussion. The next screen has the setup for each individual lockbox.

SAP Lockbox Posting Parameters

Here, the origin and destination that is coded in the lockbox file is entered. Additional parameters such as GL accounts to use for the bank and clearing accounts, document types, and posting keys can be selected. If you choose to code this activity to a house bank account that you setup in FI12, then it can be connected here.

That should give us enough configuration to process a lockbox file. There are other configuration items such as reason codes in AR, default profit centers in the GL, house banks in cash accounting, and disputes in FSCM Dispute Management that integrate here as well, but these are a separate topic and will make a long post even longer. Let’s look at the lockbox processing screen:

SAP Lockbox Posting FLB2

A couple of key items here that impact processing in a big way. The procedure and format should match what is configured in our first config screen. The field “Invoice Numbers” is incredibly important as it determines how the invoice numbers on the lockbox file will be matched to the FI document numbers.

Any items that do not match an invoice after FLB2 is run will show up in FEBA_LOCKBOX. This screen is used for post processing and fixing errors.

Keys to Success in SAP Lockbox Processing

There are a few critical points in the process to ensure that lockbox cash application has a high hit rate.

• Bank Integration: The bank who is providing the lockbox file must be on board with providing enough information. Similarly, the treasury department must be willing to pay the fees to capture the information

• Cross CoCd Payments: If the lockbox belongs to one company code and the payments are being received in another, then enhancing a user exit will be necessary.

• Updates during post processing: Each time that a payment is applied manually, the customer’s bank information should be updated. This approach requires enhancement.

• Routine error handling: All lockbox issues and unapplied cash should be examined on a daily basis. If these problems back up, it can make for an ugly close at month end.

Hopefully this information gives you a decent sense of how to configure lockbox for Rambabu. Feel free to leave comments or questions.

Rambabu namamula

E-mail [email protected]

Date post:	14-Dec-2015
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Sap Banking Functional

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