lockbox doc for training

7/28/2019 LockBox Doc for Training

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Lockbox

Overview/Purpose:

1. Banks offer lockbox service to help companies process incomingcheck payments.

2. Lockbox is similar to post box, which is used in USA only.

3. Company creates Lockbox accounts at its bank which acts as a

payment collection accounts for customers.

4. Company informs the customers to submit all open item payments to

the designated lockbox accounts.

5. Bank collects the payments from the customers along with remittance

which indicates what open items to be intended for clearance.

6. Data entry clerks at the bank manually enter the information into

electronic file for transmission to the Company.

7. The files are in one of the 2 standard banking industry transmission

formats: BAI , BAI2

8. BAI is Bank administration Institute.

9. The information in this file is matched to the accounts receivable

information in the R/3 system to clear the payments against the open

items.

Advantages:

1. Manual handling of checks can be avoided.

2. Checks can be processed in time.

3. Easy reconciliation

4. Clearing errors can be avoided.


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LockBox Process ( Business Flow)

SAP imports transmitted data from bank and create its own internal

payment advice documents to match payments to open items

BAI Vs BAI2:

Lockbox uses any one of these 2 formats.

1. Differ in level of information detail.

2. BAI file has one check total amount has all invoices listed underneath

it.

3. In BAI format entire check amount must match perfectly the total

amount of all invoices listed. It will lead to manual processing through

FLB1 ("On account" posting (if the payment and invoice totals don't

match), or "Unprocessed" posting (if no customer account and

documents could be identified from the transmission).

Customer

BANK LOCKBOX

BAI/BAI2 file format

SAP Client

Remit -to

Pa ment Advice

Check Transfer


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4. BAI2 splits the check total into separate invoice references and

associated payment amounts.

5. BAI2 file format will allow Partially applied status in which some

identifiable payments within the check total will be matched andcleared, others will land on account.

6. Hit percentage of payment invoice processing in BAI2 format is

higher than BAI format.

Sample Lockbox file of BAI:

100YPCCDESTINYPCCORIGIN9812151201

2YPCCDESTINYPCCORIGIN

50010010012345981214YPCCDESTINYPCCORIGIN

60010020001000000011000390997755331

000912302001800001900180000200018000021

400100360171800002200180000230018000024001800002500180000260

018000027

400100460190018000028

700100500123459812150100001000000

80010060012345981215001000010000009 1000000 1000000

9000010

Sample Lockbox file of BAI2

100BOA01LOCKBBANKOFAMER1204251000

21200000000004000800801


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500100051072 120424BOA01LOCKBBANKOFAMER

600100100014531101211051560120004980

4001001601 2000000206 00014531100000000000000

7001000005107212020300300001453110

8001000005107211112200030000145311000000000000000000000

9000011

LockboxConfiguration:

Define House BanksSAP IMG -> Financial Accounting ->Bank Accounting -> Bank

Accounts -> Define House Banks (Transaction Code: FI12)

Define Lockboxes for House Banks

SAP IMG -> Financial Accounting ->Bank Accounting -> Bank

accounts -> Define Lockboxes for House Banks

T code : OB10


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Define Control Parameters

SAP IMG -> Financial Accounting ->Bank Accounting -> Business

Transactions -> Payment Transactions -> Lockbox -> Define Control

Parameters

T code : OBAY Table: T049B


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Define Posting data

SAP IMG -> Financial Accounting ->Bank Accounting -> Business

Transactions -> Payment Transactions -> Lockbox -> Define Posting

data

T code : OBAX Table: T049A


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Customer Master FD03

We need to assign the Lockbox Key in Payment Transaction

tab of company code segment.


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After preparing the lockbox file (for test purpose) execute the following

transaction to test the lockbox configuration:

Import Lockbox File: FLB2

Customer Invoice: F-22


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Document 2000000118 was posted in company code 1036

Sample file:

LB file for Trng.txt

When LB file is imported in Lockbox Program FLB2, if customer is identifiedwith MICR number with the document number, then it will clear the open

item of the customer and check will show the status as Applied.


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Journal entries:

The control data and posting data settings enable the system to perform

the following postings when reading a lockbox transmission file.

GL Document:

40 Bank A/c Dr 1000

50 Bank Lock Box clearing a/c 1000

A/R Document posting:

40 Bank Lock box Clearing A/c 1000

15 Customer A/c 1000

The file is uploaded into SAP and G/L entries are posted. SAP creates

payment advices for customer items, and compares them against the

customers bank details and open items in an attemptto automatically clear

items. If open items are successfully found and cleared, and shows the

status as:

Applied (Customer MICR number and all items are matching )

Partially Applied (Some items are matched and cleared, the items which

are not found will be)


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On account (if the payment and invoice totals do not match)

Unprocessed (if no customer accountand no documents could be

identified)

Post processing Lockbox Data: FLB1

Payment Advice Note: T code - FBE3

A payment advice note contains the incoming payment details required for

allocating and clearing the relevant open item.

One payment advice is created per check.

Payment advice note headers contain:

Payment amount, payment date, and other information about the payment,and document number, reference number.

Lockbox Program:

Main Lockbox Program - RFEBLB00


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lockbox doc for training

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