Treasury incoming payments Reconciliation Automation

[Colin_Thomas]

According to the standard SAP TRM process,  the incoming payments in Treasury deals put together and accounting posting is processed in two legs, one to the Balance sheet and other to the Bank Clearing/interim GL account. At a GL account level, it would be a tedious task to reconcile incoming payment from counterparty. There would be debit/credit posted through TRM sub module using TBB1 which, has to be reconciled with debit/credit posted through Bank statement incoming payment posting related to TRM deals.

User Story

Anna is a financial analyst responsible for processing Treasury incoming payments. Her day starts with a huge number of bank statements that are processed and treasury incoming GL, posting getting credited into Bank clearing GL account.

Anna spends half of her time, during the day getting the details of incoming payment settlements received on a bank statement and reconciling the amounts posted from sub-module TRM. She reports the challenge to her supervisor Rohan.

Rohan understood her challenge and the efforts spent by Anna on a daily basis. Rohan reaches to IT Consultant to provide a Solution. Lee is an IT Consultant who understood Anna’s challenge and proposes an RPA (Robotic Process Automation) to Rohan.

Business Requirement

When a treasury deal for Forex spot (USD buy and EUR sell) is entered into the system, the transaction has two legs.

1. Currency EUR outgoing payment is processed and accounted.
2. Currency USD incoming payment is processed and accounted.

According to the above scenario,  with USD incoming, likewise there could be many more treasury deals such investments, borrowing, commodity swaps that happen in USD currency for which,  there could be multiple transaction happening with multiple Counterparties. For example,

1.  Currency 10000 USD incoming payment against Forex spot with counterparty BKDTBANDKE (Deutsche)
   
2. Currency 10000 USD incoming payment against Forex spot with counterparty CITIBANK
3. Currency 20000 USD incoming payment against Forex spot with counterparty CITIBANK

As we have received on a bank statement two Credit

1. USD 10000 with payment note BKDTBANDKE (Deutsche)
   
2. USD 10000 with payment note CITIBANK
   

The incoming payments USD10000 and USD 10000 have be cleared against the open item posted through TRM posting.

At any point of time Anna should be able retrieve the incoming payments from Counterparty,  based on due date which are not settled by counterparty.

Fig 1 – TRM Clearing GL accounts posted through TBB1

Automation required to clear open items in TRM clearing and when incoming payments are processed on a bank statement posting.

Fig 2 – TRM Clearing GL accounts posted and cleared through TBB1 and Bank statement

SAP Solution

Lee , the IT architecture had proposed a solution, when treasury deal is entered, treasury deal should have a unique Account Assignment Reference (AAR) which identifies the Counterparty. So that when treasury deal is posted to accounting (TBB1), a separate Clearing GL account based on counterparty is posted. Incoming treasury payments are identified with counterparty on bank statement.

When a bank statement is processed, the posting rule should be defined to clear the open item/post in unique Clearing GL account with counterparty and debit the main bank account.

Account Assignment reference solution is not restricted to a Product type, all deals with an Account assignment reference with a Counterparty, will have the above solution works.

How can we  achieve the above process automation

1. In customization for Account Assignment Reference setting, Account assignment reference will be created specific to Counterparty
2. In customization for OT83, we define posting rules to post and clear the GL account for clearing Counterparty.

User end transactions link

https://1drv.ms/v/s!Ah2KZic1YUA_gZh529MlUoNKPwxEMw?e=8EsFTb 

Customization:-

Fig 3 – Account Assignment Reference Configuration setup

Fig 4 – GL Accounts assignment to Account symbol (specific to Counterparty)

Fig 5 – Searching string setup for posting to Counterparty bank clearing account

Fig 6 – Assignment of Search string to Co code configuration setup

Fig 7 – Configuration setup of OT83 Accounts symbols

Fig 8 – Define posting rules

MT940 sample

Fig 9 – Bank statement sample format

Fig 10 – GL Account posting

Customization link

https://1drv.ms/v/s!Ah2KZic1YUA_gZh4NMjf-I_8ZKCuFw?e=8AVQjy 

Disclaimer

Please check with bank to populate reference of Counterparty reference, so that search string can be configured for automation. In case, if we do not get data on bank statement, posting can be without clear open item. Later, open items should be manually cleared.

Conclusion

Treasury incoming payments can be reconciled at a counterparty level. As the sub-module Treasury posting into GL is  identified at a Counterparty level. Similarly, when bank statements are processed and posted into GL, posting will be into GL identified at a Counterparty level.

[Sabyasachi2]

Excellent article on the end-of-day bank statement processing with incoming Treasury payments.