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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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