SAP Standard Lockbox functionality.

Configuration Checklist

1. House Bank: Bank address Master Data2. Lockbox Account The lockbox number at the house bank that gets mapped in

the customer master data.3. Lockbox Remit-to Address Maintain separate lockbox mailing address for the

location of to which the customer payments are sent4. Lockbox Control settings Document number length, Number of Documents,

GL Posting accounts, Incoming customer payment flag, Bank details, Gl account posting types

5. Lockbox Posting settings Destination ( Company code ) Origin ( lockbox number) Company Code, Bank GL cash receipt account, Bank Clearing account AR, Posting document types

6. Field status groups/Posting key field status Field Status can cause posting errors if data requirement doesn’t match data provided in the lockbox. Therefore, you must be careful to ensure that the posting keys and accounts to which postings will be made do not have field data input requirements that conflict with the incoming cash posting process

7. Tolerance group settings Invoice clearing tolerances, either at customer level or user level

8. Reason Codes mapping and Reason code account assignments Description & Reporting, Automatic generation of specific customer correspondence letters and Difference item write off/ dispute status account assignment

9. GL master record : General ledger accounts; Cash accounts and lockbox clearing accounts

10. Customer Master records Payment MICRs, Remit to Lockbox assignments, tolerance group assignments and possible alternative payer information

11. Payment advice settings ( type definition, Line layouts, Selection rules ) A payment advice note contains the incoming payment details required for allocating and clearing the relevant open items

Accounts called “ Lockbox” accounts at a bank act as a payment collection accounts for customer payments.Banks collect these payments along with the customer’s remittance information about what open items the payments intend to clear. Bank enters the information into an electronic file for transmission to the company to which the lockbox account belongs and typically transfers the electronic files nightly

Two formats are used for Lockbox processing BAI and BAI2. BAI is obsolete and is very seldom supported by banks. BAI2 has more robust functionality.

BAI2 splits the check total into Separate Invoice References and Associated payments. BAI2 allows the following 4 statuses

1. Applied2. Partially Applied3. On Account4. Unprocessed.

In BAI2 format the file uses “Record 6” as an identifier of the check dollar amount, the MICR number and the check number. No Invoices are contained in this record.

Following the “6 Record” are a series of “ 4 Records” which contains one Invoice each. These provide the Invoice number, Invoice open item amounts ( gross), deduction amount and External reason code.

** SAP imports transmitted data from bank running program RFEBLB00/RFEBLB20 and creates its own internal payment advice documents to match open items. Payment advice is only a list not an FI document. One payment advice is created per check. Payment advice documents are crucial, because the lockbox program do not perform any postings – this is handled separately by the standard FI document posting program SAPMF05A. The payment advice holds most information that the posting program will need to properly post payments against open items in customers accounts***

Posting Keys critical for incoming cash are 06 Payment Difference Debit Customer08 Payment Clearing Debit Customer15 Incoming Payment Credit Customer16 Payment Difference Credit Customer40 Debit Entry Debit GL Account50 Credit Entry Credit GL AccountField Status Groups It is important to note that the Field Status settings must be in agreement. If a posting key has a field that is suppressed and the same field is required in the Field status group a GL account uses, it will give errors.

** RFEBKA96 ( Recovery program )**RFEBKA***

The system stores information about already imported files in “ Bank data storage” and thus no files with the same time/date combination are allowed to be imported into the system ( Buffer )

*** FLB26-REID2 is used to modify the underlying data element to accommodate the new 13 digit account number into lockbox **

Lockbox Standard Reporting

1. Posting Log Information about what postings occurred (and status of each check

received via lockbox) “Hit rate” summary statistics Key dates: check numbers, payment advice numbers ( for an account or

unprocessed checks), system posting error messages, customer numbers, check amounts, header data ( destination, origin,Lockbox,date,time, short key ID

2. Log of Imported Checks Advice total and check amount total comparison Customer name Document Number and deductions Text description of why(or why not) postings occurred Description of how customers were identified

Other Reports can be customized as per the clients requirement.1. Lockbox Summary Reports2. Lockbox cash receipts reconciliation function by date or lockbox3. Lockbox Transmission reports4. Lockbox Unprocessed Checks report ( Error List )