Electronic Bank Statement

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Introduction

MT940 is a standardized SWIFT (Society for Worldwide Interbank Financial Telecommunication) message format used for the electronic exchange of financial transactions and statements between banks and their customers. The purpose of MT940 is to provide a structured and standardized way to communicate detailed information about a customer's account transactions. MT (Message Type) 942 provides intraday account balance updates. It helps banks and their customers monitor their accounting transactions accurately. 

How to read MT942 

It is a txt file which will be uploaded into the program of electronic bank statement by FF_5.

{1:F01HABBPKKAA0429999999999}{2:I940HABBPKKAXXXXN}{4:  Header for bank's use 
:20:0786CF9VDU007                                            Transaction reference number 
:25:07867903388503                                           Account number 
:28C:012/1                                                           Statement number/Sequence number 
:60F:D240123PKR97000,00                                Opening balance 
:61:2401260126DR50000,00NCHK//FR 004259323PK TO 07867903388503    Statement line 
:86:FR 004259323PK TO 07867903388503         Description 
:61:2401260126CR35000,00NCMI//FR 004347680PK TO 07867903388503
:86:FR 004347689PK TO 07867903388503
:61:2401260126DR40000,00NTRF//FR 004349689PK TO 07867903388503
:86:FR 004347689PK TO 07867903388503
:61:2401260126DR140471312,00NCMS//FR 004347684PK TO 07867903388503
:86:FR 004347684PK TO 07867903388503
:62F:D240126PKR140623312,00                       Closing balance 
:64:D240126PKR140623312,00                        Closing available balance 
}

Understanding External Transactions - SWIFT Transaction Codes 

External Transactions	Description
NCHG	Charges and other expenses
NCHK	Cheques
NCMI	Cash management item- no detail
NCMP	Compensation claims
NCMS	Cash management item-Sweeping
NCSH	Cash transaction
NFEX	Foreign exchange
NINT	Interest
NLDP	Loan deposit
NMSC	Miscellaneous
NTRF	Transfer

For all the SWIFT codes, refer https://develop.hsbc.com/sites/default/files/hsbc_pdf/HSBC%20SWIFT%20BAI2%20and%20ISO%20Transaction%...

Understanding Bank Layered Structure in SAP 

Banks layered structure would help in configuration of Account symbols on SAP. 

A 5 tier structure consists of 

Let us suppose my organisation The Silent Way has a bank account in Standard Chartered Bank through which cash will be inflowed and outflowed. In SAP, bank account gets opened with real account number but with 3 or 5 different GLs. 

GL ********   Standard Chartered Main Bank Account   - is responsible for the reconciliation of the account balances. 

GL ********   Standard Chartered Outgoing Bank Account - automatic payment transactions that leads to the cash outflows. For e.g, suppliers payments

GL ********   Standard Chartered Outgoing Manual Bank Account- user adjusts some payments other than SAP. 

GL ********   Standard Chartered Incoming Bank Account -automatic incoming payment transactions that leads to the cash inflows. For e.g, customers payments

GL ********   Standard Chartered Incoming Manual Bank Account - other than automatic incoming transactions, user creates manual payments, for that IC Manual is used. 

TSW has 5 suppliers outstanding, CODM signed $4000 each to pay. Outgoing manual account will display the 5 line items of $4000 with total of $20,000. The $20,000 balance will be credited in the main bank account of SCB, that's how manual reconciliation work. 

Incoming payment case will be vice versa, where main bank account will be debited against the incoming manual account. 

Conclusion

I hope the blog will help in understanding of basics for the new learner in SAP, it will be connected into the next blog of back end configuration of MT940.