Checks with due date in Accounts Receivable

Limitations

Japanese customers working with drafts use market unique functionality in 'Received Tegata Settl. Reconcile Prop' (ARJP10) and can therefore not use the functionality in (ARS355) for bank confirmation. You must define the Payment types defined for draft payments in Japan with 'Bank confirmation type' (BNCT) parameter set to 1 in 'Payment Type. Open' (CRS078).

Before you start

'Accounting Identity. Open' (CRS630

Define the company bank account as a bank account by selecting the check box for 'Bank account' (AT12) on (CRS630/E). Connect the bank account to the correct currency, local or foreign, on (CRS630/F). If you must use the bank operation codes for the bank account, activate this functionality in the Enter bank operation (BACR) field on (CRS630/F).

'Bank Account. Open' (CRS692)

Define the company bank account with the currency code and accounting string that you must use for the bank transaction in the general ledger.

'Payment Type. Open' (CRS078)

Define a payment type for payment class 4='Draft' with 'Bank confirmation type' (BNCT) set to 2='Bank confirmation per due date' and 'Remittance method' (ARTP) set to 2='Discount before the due date'.

'AR Payment Method' (CRS076)

Define a payment method using the payment type defined in (CRS078). If bank operation codes are used, select such a code, which is defined in 'Bank Operation. Open' (CRS079), in the Bank operation field for the payment method on (CRS076/E).

'Number Series. Open' (CRS165)

You must define these number series in (CRS165):

'FAM Function. Open' (CRS405)

You must define these FAM functions in (CRS405):

• AR80 Confirmation of remittance proposal in (ARS300).
• AR86 Reconciliation of bank confirmation proposal in (ARS355).
• AR87 Deletion of draft from proposal in (ARS356).

'Accounting Rule. Set' (CRS395)

You must define these accounting rules in (CRS395):

• AR30-195 Posting in debit during entry of a payment document in (ARS105) or (ARS110). Posting in credit at confirmation of a remittance proposal in (ARS300).
• AR75-197 Posting in debit at confirmation of a remittance proposal in (ARS300). Posting in credit at reconciliation of a bank confirmation proposal in (ARS355).
• AR80-301 Posting in credit for currency gain at reconciliation of a bank confirmation proposal in (ARS355).
• AR80-302 Posting in debit for currency loss at reconciliation of a bank confirmation proposal in (ARS355).

'AR Accounting Option. Open' (ARS020)

Define accounting option 99 that is used for any rounding differences that may occur at reconciliation of a bank confirmation proposal in (ARS355).

'Payment Received. Specify Bank Fee Type' (ARS015)

Define up to six different bank fees to be specified during reconciliation of bank confirmation proposals in (ARS355).

'AR Additional Info. Update' (ARS950)

Use F14='Standard' to generate the additional information number 296 (Bank confirmation number).

'General Ledger. Update Additional Info' (GLS950)

Use F14='Standard' to generate additional information number 041 (Bank confirmation number).

Workflow

The process begins when a check with due date is received from a customer. The outcome is described for each step in this process.

1. Register the check.

   The customer check is registered as a draft in 'Payment Document. Enter' (ARS105) or in 'Payment Received. Record' (ARS110) using a payment method that is connected to a payment type defined with 'Bank confirmation type' (BNCT) set to 2='Bank confirmation by due date' in (CRS078). The check number is specified in the Draft no (CKNO) field on (ARS105/F) or in Drawee ref (DRRN) field on (ARS112/E). The due date is specified on the same panel.

   These are the outcomes of this step:

   • The draft is posted on the accounting string defined for accounting rule AR30-195 (FGLEDG table).
   • The draft is created in accounts receivable and displayed in 'Acc Receivable. Display' (ARS200) with an internal draft number from number series 85-1 in (CRS165) and with remittance status (PYRS) that is set to 10='Draft' (FSLEDG table).
   • The draft is also created in the draft master and displayed in 'Customer Draft. Display' (ARS280) with remittance status set to 10='Draft' and with the accounting string for AR30-195 that is displayed under 'heading 'Not remitted' on (ARS280/F) (FDRFMA table).
   • The check number that is specified on (ARS105/F) or (ARS112/E) is stored as additional information number 211 (FSLEDX table).

   See Record Customer Check or Draft in the Payment Document Master.

2. Create bank remittance proposal.

   A remittance proposal is created in 'Bank Remittance. Open' (ARS300) for the company bank account to which the check must be cashed. On (ARS301/E), the payment type and the currency used for the draft that is created in the previous step are selected. You must set the Remittance type to 2='Advance (discounting)'.

   The proposal can include drafts with different due dates, but the drafts must be in the same currency as the bank account for which the proposal is created. Thus, the currency selected for the remittance proposal on (ARS301/E) must be the same as the currency defined for the bank account in (CRS692).

   These are the outcomes of this step:

   • A remittance proposal is created with a remittance number from number series 81-0 in (CRS165). The header record is displayed in (ARS300) (FARREM table) and the detailed records are listed in 'Bank Remittance. Enter Details' (ARS310) (FARRED table).
   • The drafts that are included in the proposal are updated to remittance status (PYRS) 15='Draft included in a bank remittance proposal' in (ARS200) (FSLEDG table) and in (ARS280) (FDRFMA table).
   • The remittance number is stored for the drafts in the draft master (FDRFMA table) and as the additional information number 210 (FSLEDX table).

     See Remitting Customer Checks or Drafts to Bank for Collection.

3. Confirm bank remittance proposal.

   The remittance proposal is confirmed in (ARS300) and the drafts are thereby remitted to the bank.

   These are the outcomes of this step:

   • A voucher is created through FAM function AR80 with a posting for accounting rule AR30-195 in credit and a posting for accounting rule AR75-197 in debit (FGLEDG table). The corresponding payment transactions (TRCD=20) are also created for the draft in accounts receivable (FSLEDG table).
   • The remittance proposal is updated to status (RSTA) 19='The bank remittance is confirmed in (ARS300), and the bank confirmation handled in (ARS355)' in (ARS300) (FARREM table).
   • The check number specified on (ARS105/F) or (ARS112/E) is updated in the Drawee reference number (DRRN) field for the detailed records in the remittance proposal (FARRED table).
   • The drafts that are included in the proposal are updated with remittance status (PYRS) set to 20='Draft remitted' in (ARS200) (FSLEDG table) and in (ARS280) (FDRFMA table).
   • The accounting string for AR75-197 is displayed under heading 'Remitted' on (ARS280/F) (FDRFMA table).
   • The drafts that are included in the proposal are updated with internal reconciliation code (RECO) set to 8='The transaction has been preliminary reconciled' and internal reconciliation date (REDE) set to the accounting date selected at confirmation of the remittance proposal in (ARS300) (FSLEDG table).
4. Create bank confirmation proposal.

   When the bank has confirmed that customer checks for certain due dates have been cashed, a bank confirmation proposal is manually created through option 1='Create' in (ARS355). On (ARS355/K), the selection is made by entering the Bank account ID (BKI2), the Payment type (PYTP), and a range of due dates (DDTF and DDTT). Drafts with a due date within the selected date range are then included in the bank confirmation proposal in (ARS355). These drafts might have been remitted to the bank through different remittance proposals in (ARS300).

   These are the outcomes of this step:

   • A bank confirmation proposal is created with a bank confirmation number from number series 85-A in (CRS165) and displayed in (ARS355) (FARREC table).

   • The drafts that are included in the bank confirmation proposal are updated to status (RSTA) 08='The record is selected for reconciliation' (FARRED table).

   • The bank confirmation number is stored for the drafts in the BNCN field (FARRED table), and as additional information number 296 (FSLEDX table).

5. Adjust bank confirmation proposal.

   The drafts that are included in the bank confirmation proposal are listed in (ARS356), reached through related option 11='Remitted pmts' in (ARS355). You can hold drafts using option 3, release drafts using related option 6, or delete drafts using option 4, from the proposal in (ARS356).

   When you select option 3='Hold', these are the outcomes:

   • A draft that is held in the bank confirmation proposal through option 3='Hold' in (ARS356) is updated to status (RSTA) 03='The record is blocked for reconciliation' (FARRED table). The total remittance amount (RMTC) of the bank confirmation proposal is reduced (FARREC table).
   • The status of a draft that is held in the bank confirmation proposal is reset to 00='The record is not reconciled or selected' when the proposal is reconciled in (ARS355). You can then include the draft in a new bank confirmation proposal in (ARS355).
   When you select related option 6='Release', these are the outcomes:

   • A held draft that is released in the bank confirmation proposal through related option 6='Release' in (ARS356) is updated to status (RSTA) 08='The record is selected for reconciliation' (FARRED table). The total remittance amount (RMTC) of the bank confirmation proposal is increased (FARREC table).
   When you select option 4='Delete', these are the outcomes:

   • When you delete a draft from the bank confirmation proposal (FARRED table) through option 4='Delete' in (ARS356), the total remittance amount (RMTC) is reduced for the bank confirmation proposal in (ARS355) (FARREC table) and for the remittance proposal in (ARS300) (FARREM table).
   • The value in the Discounted amount not overdue (DNOV) field that is displayed for the company bank account on (CRS692/F) (CBANAC table) is reduced by the amount of the deleted draft.
   • The additional numbers 210 and 296 are removed (FSLEDX table) because the draft is no longer connected to any remittance number in (ARS300) (FARREM table) or to any bank confirmation number in (ARS355) (FARREC table).
   • The remittance status (PYRS) of the draft is updated to 11='Draft rejected by the bank before reconciliation' in the draft master (FDRFMA table) and in accounts receivable (FSLEDG table). You can then include the draft in a new remittance proposal in (ARS300).
   • If cash register for payment receipts is used, the cash register status for the payment receipt document is set to 10-'Not remitted'. See Cash register for customer payment receipts for a detailed description.
   • A voucher is created through FAM function AR87 for the accounting date selected on (ARS356/D) with a posting for the accounting rule AR75-197 in credit and a posting for accounting rule AR30-195 in debit (FGLEDG table). The corresponding payment transactions (TRCD=20) are also created for the draft in accounts receivable (FSLEDG table).
6. Reconcile bank confirmation proposal.
   The bank confirmation proposal is reconciled with related option 9='Reconcile' in (ARS355). The details of the reconciliation are entered on (ARS355/L):

   • You must select an accounting date for the reconciliation voucher, whereas the voucher text is optional.
   • The account used for the bank transaction is retrieved from the setup of the bank account in (CRS692) that is connected to the bank confirmation proposal in (ARS355). If account supplementation has been activated for FAM function AR86, then you can specify values for accounting dimensions 2 to 6 for the bank transaction on (ARS355/L).
   • If the use of bank operation codes has been activated for the bank account in (CRS630), then the fields Bank operation (BOPC) and Value date (CURD) are displayed on (ARS355/L). You can manually specify the bank operation code (BOPC), but it is defaulted from the payment method used for the first draft included in the bank confirmation proposal. The value date (CURD) is then automatically calculated based on the selected accounting date and the setup for the bank operation code in 'Bank Operation. Define Value Date Method' (GLS010). You can also specify the value date manually.
   • The reconciliation amount specified in the Foreign currency amount (CUAM) field on (ARS355/L) must be equal to the amount in the Remittance amount in foreign currency (RMTC) field minus any bank fees.
   • You can specify up to six bank fees on (ARS355/L), based on the setup in (ARS015). You can specify a VAT code for each bank fee, unless the account used for the bank fee has been defined with VAT account type (AT04) set to 0='Not a VAT account' in (CRS630).
   These are the outcomes of this step:

   • The bank confirmation proposal is updated with the information about the reconciliation and is set to status (RSTA) 09='The bank confirmation is reconciled' in (ARS355) (FARREC table).
   • The drafts included in the bank confirmation proposal are updated to status (RSTA) 09='The record is reconciled' in (ARS356) (FARRED table).
   • The remittance status (PYRS) of the drafts is updated to 30='Draft confirmed by bank and reconciled in (ARS350) or (ARS355)' in (ARS200) (FSLEDG table) and in (ARS280) (FDRFMA table).
   • The accounting string for the bank transaction is displayed under heading 'Bank account' on (ARS280/F) (FDRFMA table).
   • When a reconciliation voucher is created through FAM function AR86, these happen:
     • Postings are created for the bank account (in debit), and, if applicable, for bank fees (in debit), currency gain or loss, and rounding transactions (FGLEDG table).
     • A payment transaction for each draft is posted on accounting rule AR75-197 in credit (FGLEDG table).
     • A corresponding payment transaction (TRCD=20) is also created for the drafts in accounts receivable (FSLEDG table).
     • The bank confirmation number is stored for all transactions in the reconciliation voucher as additional information number 041 (FGLEDX table).
     • If the use of bank operation codes has been activated for the bank account in (CRS630), the bank operation code (BOPC) and value date (CURD) are stored for the bank transaction (FGLEDB table).
     Note: If the 'Draft accounting method' (DAME) parameter has been activated on 'Settings – General Ledger' (CRS750/F), then the posting created for each draft during reconciliation in (ARS355) is different. A posting (TRCD=21) for accounting rule AR80-191 is created (in credit), instead of the payment transaction (TRCD=20) for accounting rule AR75-197. The additional information number 113 (holding the accounting year, the journal number, and the journal sequence number of the draft (TRCD=10)) is created for those transactions (FGLEDX table). The accounting string for AR80-191 is displayed under heading 'Risk canceled' for the drafts on (ARS280/F) (FDRFMA table). With this workflow, the drafts remain unpaid in (ARS200) even after reconciliation in (ARS355), until 'Customer Risk Cancellation. Create' (ARS330) is ran. At that point, the accounting string for AR80-191 is reversed through a posting in debit (TRCD=21), and a payment transaction (TRCD=20) is created for accounting rule AR75-197 (in credit), which updates the draft as paid in (ARS200) (FSLEDG table).
7. Delete bank confirmation proposal.

   You can delete a bank confirmation proposal from (ARS355) when it is still in status 01='The proposal is ready for processing' or when it has already been updated to status 09='The bank confirmation is reconciled'.

   When a bank confirmation proposal in status (RSTA) 09 is deleted, only the header record in (ARS355) is removed from the FARREC table. No other updates are made.

   When a bank confirmation proposal in status (RSTA) 01 is deleted, the header record in (ARS355) is removed from the FARREC table and the included drafts are reset to status 00='The record is not reconciled or selected' and the BNCN (holding the bank confirmation number) field is cleared (FARRED table). The drafts are then included in a new bank confirmation proposal in (ARS355).

Problem Solving

Recalculating the remittance amount for bank confirmation proposal

If required, the total amount of the drafts included in the bank confirmation proposal, displayed in the Remittance amount in foreign currency (RMTC) field in (ARS355) and (ARS356), can be recalculated with related option 7='Recalculate' in (ARS355).

The 'Remittance amount in foreign currency' (RMTC) (FARREC table) is recalculated to the total foreign currency amount (CUAM) of the drafts that are included in the bank confirmation proposal (FARRED table). Only the drafts in status (RSTA) 08='The record is selected for reconciliation' are considered when the remittance amount (RMTC) is recalculated.

Restarting an interrupted job from (ARS355)

During reconciliation of the bank confirmation proposal, the status (RSTA) is temporarily set to 08='The bank confirmation is being reconciled. Temporary status' in (ARS355) (FARREC table). If the reconciliation would be interrupted and remain in status 08, then you can restart the reconciliation with related option 19='Restart reconciliation' in (ARS355). When the reconciliation is completed, the status (RSTA) is updated to 09='The bank confirmation is reconciled.'.

If the update of the reconciliation voucher from (ARS355) would be interrupted at a later stage when the status of the bank confirmation proposal has already been updated to 09='The bank confirmation is reconciled.', then you can restart the interrupted job with related option 9='Restart' in 'Trans Work File. Restart Interrupted Jobs' (GLS047).

Correcting erroneous reconciliation voucher from (ARS355)

If the reconciliation voucher from (ARS355) contains any errors, the job ends up in 'Trans Work File. Restart Erroneous Jobs' (GLS037). You can correct the erroneous transactions in 'Transaction. Open Erroneous' (GLS039), but you cannot delete any transactions from a voucher that are from (ARS355).

In 'Voucher. Open Erroneous' (GLS038), you can use related options 7='Create contra amt' and 8='Retrieve vouch no' to correct an unbalanced voucher from (ARS355) or retrieve a voucher number if the voucher number has not been set. However, you cannot delete a voucher that is from (ARS355) in (GLS038).

Reversing reconciliation voucher from (ARS355)

If required, you can use 'Voucher. Reverse' (GLS900) to reverse a reconciliation voucher from (ARS355). After reversal, the reconciliation is reversed in all related tables and the status of the bank confirmation proposal is reset to 01='The proposal is ready for processing.'. After reversal, you can perform a new reconciliation of the bank confirmation proposal in (ARS355).

If the 'New vouch date' parameter is activated on (GLS900/E), then two vouchers are created, a voucher for reversal of the original voucher and a voucher posted on the new accounting date. In this case, the bank confirmation proposal remains in status 09='The bank confirmation is reconciled.'. However, the bank confirmation proposal is updated with the new accounting date and the new voucher number.

Resetting status of bank confirmation proposal

• 02=The proposal is currently in use by another user.
• 04=The proposal is being deleted.
• 07=The remittance amount is being recalculated.

Processing bank confirmation proposals through API transactions

The processing of bank confirmation proposals can be handled through API transactions for ARS355MI and ARS356MI.

ARS355MI:

• CreateProposal – option 1 in (ARS355)
• DeleteProposal – option 4 in (ARS355)
• GetBankConfNo – option 5 in (ARS355)
• Recalculate – related option 7 in (ARS355)
• ReconProposal – related option 9 in (ARS355)
• RestartRecon – related option 19 in (ARS355)

ARS356MI:

• Delete – option 4 in (ARS356)
• Hold – option 3 in (ARS356)
• List – related option 11 in (ARS355)
• Release – related option 6 in (ARS356)

Statuses

Status in (ARS300) in the RSTA field in the FARREM table

When processing a remittance proposal in (ARS300), the proposal is updated to one of these statuses:

• 00 = The proposal is being created.
• 01 = The proposal is ready for processing.
• 02 = The proposal is currently in use by another user.
• 04 = The proposal is being deleted.
• 06 = The proposal or confirmed remittance document is being printed.
• 09 = The bank remittance is confirmed in (ARS300) and the bank confirmation handled in (ARS350).
• 10 = Temporary status indicating that the remittance is being updated to receive status 11=Reconciled in (ARS350).
• 11 = Bank remittance is reconciled in (ARS350).
• 19 = The bank remittance is confirmed in (ARS300) and the bank confirmation handled in (ARS355).
• 20 = Temporary status indicating that the remittance has been selected for deletion.
• 21 = The bank remittance is reconciled in (ARS355), but risk cancellation not performed.

Status in (ARS355) in the RSTA field in the FARREC table

Status in (ARS356) in the RSTA field in the FARRED table

For each draft that is included in a bank remittance proposal in (ARS300), a record is created (FARRED table) with status 00 and those records are listed in (ARS310). If the bank remittance proposal concerns 'Bank confirmation type' 2='Bank confirmation by due date', then you can include the records (FARRED table) in a bank confirmation proposal in (ARS355) later. The records are then listed in (ARS356). During processing in (ARS355) and (ARS356), the records (FARRED table) are updated to one of these statuses:

• 00 = The record is not reconciled or selected.
• 03 = The record is blocked for reconciliation.
• 04 = The record is being deleted from the proposal.
• 08 = The record is selected for reconciliation.
• 09 = The record is reconciled.

Remittance status for drafts in (ARS200) and (ARS280) in the PYRS field in tables FSLEDG and FDRFMA