Lockbox Functionality in SAP

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Lockbox Functionality in SAP

Components of the SAP Lockbox

1. Control Parameters (Transaction OBAY)
» Procedure
» The procedure for payment processing. The system currently only supports
the procedure LOCKBOX.
» Record Format
» The standardized record format of the file which you receive from the bank.
The only supported formats are BAI, BAI2 and IDOC. For record format BAI
only, you must also tell the system the length of the document and the
maximum number of invoices which can be contained in record types 4 and 6.
For the BAI format, record type 6 contains the detail per check. If there are
more than 3 invoices being paid by a check, then a record type 4 is required.
Record type 4 is the overflow record. The BAI data needs to conform strictly to
this format creating a new ‘overflow’ record only when the prior record is filled
with the number of entries indicated in the configuration. For the BAI2 and
IDOC formats, it is not necessary to specify this information.
» G/L Account Posting Type
» You have two options when posting to the GL. You can choose to post one
line item per check in both the clearing account and the GL bank account or
you can choose to post one line item per check in the clearing account and
only one line item for the total lockbox amount in the bank account. This
reduces the number of postings to the GL bank account. As of release 4.6,
you will also have the option to post one line item per batch. In the case where
you have a file with three batches, each containing 50 checks, you would have
150 line items to the clearing account and 3 line items to the GL bank account.
It is generally accepted to enable this compression on the GL account either at
the bank or the batch level.
» Partial Payments
» The “Partial Payments” option is not recommended for customers with high
volume. This box changes the default behavior of the program to post partial
payments rather than creating residual items. The result is an “on account”
posting with a reference to the original. This increases the number of open
items on the customer account since nothing was cleared. Note that new SAP
customers are typically accustomed to ‘partial payments’ in their view of the
lockbox cash application. Residual item creation and the clearing of the initial
customer invoice offers similar processing and capability along with the
reduction of open items on the customer account. Additionally, the link is
maintained between the residual item created and the original customer
invoice from which it was created.
» Insert Bank Details
» The execution of the lockbox program allows you also to create a batch input
session which will update your customer master records with bank account

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information, allowing the system to ‘learn’ customer bank information and
improve processing statistics.

2. Posting Data (Transaction OBAX)

» Destination / Origin
» The Destination and Origin can be almost anything and are agreed upon with
the lockbox bank as to their values. In some cases one of them may be the
ABA number of the lockbox bank and the destination may be a cash account to
which lockbox remittances are eventually transferred. They are both contained
in record 1 of the file. The destination is in fields 4 to 13 and the origin is in
fields 14 to 23.
» House Bank / Account ID
» If the lockbox is receiving payments which are of a currency other than the
company code currency, then you have to create a house bank and account id
for the lockbox account and specify the alternate currency in the house bank
account. Canadian companies may have a US dollar lockbox for example.
Note that lockbox accounts for each currency of receipt need to be configured.
You can not have multiple currencies in the same file.
» Bank (G/L) Account / Bank Clearing Account (A/R)
» The automated lockbox posting program uses a two-step posting process. In
step one, it posts to a GL account which is a bank account (House Bank /
Account ID) and also to an AR clearing account commonly called an ‘unapplied
cash’ account. In step two, the program attempts to clear a customer open
item. If successful, it clears the customer open item and also the item in the
clearing account (unapplied cash) which was posted in the first step. *** If you
are using the cash management module, then the GL account in the “Bank
(G/L) acct” field should contain a clearing account for incoming cash rather
than the actual GL account for the bank.

3. Lockbox Addresses for House Banks (Transaction OB10)

» You can store different addresses, such as PO box numbers, for the lockbox to
which customers mail their payments. The billing documents will then have the PO
address rather than the bank street address. You must also maintain the lockbox
field in the company code payment transaction screen in the customer master.
» Lockbox
» This is a 7 digit designation which you can define freely. It is suggested that
you use the same name as the account id at the house bank in order to avoid
confusion.
» Lbox No
» This is the number of the lockbox at your bank.

4. House Bank / EDI Partner (Transaction FI12) – Optional

» DME Section of the House Bank
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» EDI Partner Profiles
» Partner No. – Use the ABA number to designate the partner number for the
house bank.
» Partner Profile
» Header Information
» Partner Type – “B” for Bank
» Classification
» Partner Status – “A” for active
» Post Processing: Permitted Agents – The user entered in this area will
receive messages in his or her inbox if there are problems with the
import.
» Typ – “US” for User
» Lang. – “EN” for English
» User – user id for the SAP system
» Inbound Parameters
» Message Type – “LOCKBX” for Lockbox
» Inbound Options
» Process Code – “LOBX” for lockbox
» Trigger Immediately – the inbound IDOC is processed immediately
» Post Processing: Permitted Agents – The user entered in this area
will receive messages in his or her inbox if there are problems with
the import.
» Typ – “US” for User
» Lang. – “EN” for English
» User – user id for the SAP system

4a. ***EDI Port – an EDI port must be created in the system. This topic
is not covered in this document.

5. Examples of possible user exits to increase hit rate.

» Cross-company postings. The bank account is actually owned by one company but
the customers are in another company. The cash portion of the posting should be
in one company code and the clearing of the customer item will be in the other.
Since the posting rules for the lockbox are company code specific, you would need
to have the user exit post the other side of the transaction to a GL in another
company code.

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» Alternate field search. The lockbox programs searches for document numbers
(BELNR) and reference document numbers (XBLNR) to clear open items. With
many customers, the billing document number is placed in the allocation field when
the AR invoice is created. You could create a user exit which searches the
allocation field in addition to the document and reference document fields. Post
processing of the lockbox file relies on the document number when creating the
payment advice. You could also have the user exit put the document number in
the payment advice rather than the value which is in the allocation field since the
system has already done the search for the allocation field.

6. Execute Program RFEBLB00 (BAI, BAI2) or RFEBLB30 (EDI)

» File Specifications (RFEBLB00)
» If you want to store the file in the system, you should check the box. If the file
is either on the c drive of your PC or on a disk, you will need to check the box
for PC upload and give the path name.
» Lockbox Data (RFEBLB30)
» The statements brought in to the system via EDI are processed with this
transaction. Enter the origin, destination, lockbox, and statement date.
» Processing Parameters
» Invoice numbers
» You can tell the system which field to search for the invoice numbers. Your
choices are document number, reference document numbers, or both.
The order of the search can be specified.
» Enhanced Invoice number check
» This parameter ensures that invoices on a line item in the statement are
only cleared from the same customer account. If the invoice number is
transposed, for example, it could erroneously clear an invoice on another
customer account.
» Algorithm: checks with and without advice
» You can tell the system to post on account those payments which are not
able to clear an open item. If you choose the option to distribute by date,
then the system will collect all payments which are on the customer
account and try to clear the open items, beginning with the oldest item.
» Account Assignments
» The program can assign the value date to the postings based on the file date.
If you enter a profit center or business area, the program will assign it to every
document in the ledger and subledger.
» Output Control
» You can, and typically do, print the posting log from the program run.

7. Post Processing (Transaction FLB1)

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» Enter specific data for the lockbox selection or select the Lockbox Overview button
to view all existing bank files. After entering or selecting the file, you see the status
of the checks by batch number. Checks are categorized as follows:
» Applied: The customer was identified and the check has cleared all document
numbers provided.
» No further processing is necessary. You can not look at the payment
advice because the system automatically deletes it.
» Partially Applied: The customer was identified and the check has cleared some
of the documents. The remaining amount is posted on account for further
manual processing.
» To process: choose the check and then press the post button. Clearing is
done via standard SAP processing.
» On-Account: The customer was identified but none of the documents could be
found. The full amount of the check is posted on the customer account for
further processing with via payment advice.
» For this status, you must first change the payment advice. Select the check
and you can insert or delete clearing information. You can also classify
deductions with reason codes. After the changes, the advice must balance
to zero. Save the advice and then post it.
» Unidentified: The customer was not identified. These are truly ‘unapplied cash’
and indicate inadequate customer identification either by MICR / Account
number in the lockbox data or via invoice remittance information. The check
remains in the unapplied payment clearing account. The payment advice is
used to clear the item once the customer is identified.
» This is similar to the on-account status. You must first identify the customer
in the payment advice before making other changes.

8. Test Lockbox Generation Programs RFEBLBT2 and RFEBLBT3.

These programs will generate customer open items and a lockbox file for processing.
Utilize program RFEBKA96 to delete loaded test data. Refer to the online support system
on this program for further information and extreme caution on its usage.
» File Name
» The program produces a BAI2 (or IDOC) file which is stored in UNIX. You can
use any name you wish. Once the file is displayed on screen, a menu
command allows PC download of it which facilitates repeated usage of the file
with minor modification.
» Customer fields (6 Fields)
» You must enter customer numbers in the first four fields in order for the program
to work. You can use the same customer number in all four fields if you wish.
You can generate complex parent-child relationships which test the ‘worklist’
configuration via multiple customer entry.
» Dummy Account

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» This is the offsetting account to the customer invoices and credit memos that
the program creates.
» Deduction ($100 each Invoice)
» If you place an “X” here the program will generate a file in which all the
amounts paid in the invoices differ by $100 from the actual invoice amount. In
other words, the customer is paying $100 less on each invoice.
» Deduction not related to invoice
» If you insert an amount here, the program generates line items on the file for
that amount which do not have a document number associated to them.
» Credit Memo
» If you place an “X” here, the program creates credit memos on the customer
account which are half of the invoice amounts. No credit memo appears on the
file.
» Credit Memo with Number
» If you place and “X” here, the program generates credit memos with numbers
and puts them in the file also.
» Check Difference
» If you place an “X” here, the program generates line items which total more
than the check amount.
» Run the Lockbox import program, using the filename which you chose for the test
tool. Since the file is in the UNIX directory, make sure the “”PC upload” box is not
checked.

Basic Steps in Configuring the Lockbox

» Maintain Control Parameters
» Maintain Posting Data
» Create Lockbox Addresses for House Banks
» Optional:
» For EDI processing: Create EDI Port, EDI Partner with Inbound Parameters
» Create user exit.

Menu Paths
The menu paths for setting up the lockbox:
» Financial Accounting Bank Accounting Business Volume Payment
Transactions Lockbox Define Control Parameters
or
Transaction Code OBAY.

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» Financial Accounting Bank Accounting Business Volume Payment
Transactions Lockbox Define Posting Data
or
Transaction Code OBAX.
» Financial Accounting Bank Accounting Bank Accounts Define Lockbox
Accounts at House Banks
or
Transaction Code OB10.
» Financial Accounting Bank Accounting Bank Accounts Define House Banks
or
Transaction Code FI12.

1. Financial Accounting Bank

Accounting Business Volume
Payment Transactions Lockbox
Define Control Parameters
2. Press the “New Entries” button.

3. Insert “LOCKBOX” as the procedure

and either “BAI”, “BAI2”, “IDOC” as the
record format.
4. For “BAI” record format, enter the 3
document number length, and the
number of documents in the 6 and 4
records.
4
5. Check the boxes “G/L Account Postings”
and “Incoming Customer Payments”.
5 6
6. Choose whether you wish to update the
general ledger with one posting per 8
7
check or one posting per lockbox file in
the “G/L account posting type” field. As
of release 4.6, you also have the option
to post per batch.
7. You can also choose whether to update
the customer master records with bank
details by clicking on the “Insert bank
details” box and filling in a name for the

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batch input session.
8. The “Partial Payments” option is not
recommended for customers with high
volume.
9. Press the save icon.
10. Financial Accounting Bank
Accounting Business Volume
Payment Transactions Lockbox
Define Posting Data
11. Press the “New Entries” button.

12. Enter the Destination and Origin

information from the file which you
received from the bank.
13. Enter the company code. 12
14. If the lockbox account has a currency
other than the currency of the company 13
code, you must maintain it as a house 14
bank and and account id and enter that
information here. Otherwise, you can 15
leave it blank.
15. Enter the “Bank (G/L) acct” and “Bank
clear.acct(A/R)” as descrbed above. 16
16. Maintain the posting parameters. The
most common settings are indicated in
the screen print to the right.

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17. Financial Accounting Bank
Accounting Bank Accounts
Define Lockbox Accounts at House
Banks
18. Press the “New Entries” button.

19. Enter the company code, freely defined

Lockbox (recommended to use the
account id from the house bank), house
bank, and Lbox no from the bank.

19

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20. Financial Accounting Bank
Accounting Bank Accounts
Define House Banks
21. Choose the appropriate house bank 22
from the list.
22. Press the DME button.

23. Enter the Partner Number. Common

practice is to use the ABA number.
24. Press the Partner Profile Button.

23 24

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25. Press the New Entries Button.

26. Enter the Partner number (same as

previous screen).
27. Enter Partner type B for Bank.
26
28. The partner status is A for active.
27
29. Enter the data for the user who will be
receiving error messages in the inbox.
30. Press Save. 28

29

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31. Go back one menu.
32. Highlight your new entry and press the
Inbound Parameters magnifying glass.
33. Press the New Entries button.
34. Leave Partn.funct., Message Code, and 35
Message function blank.
35. Enter “LOCKBX” for the message type.
36
36. Enter “LOBX” for the process code. 37
37. Check the Syntax check box.
38. Choose the Trigger immediately radio
38
button.
39. Enter the data for the user who will be
receiving error messages in the inbox.
39
40. Press Save.
41. Accounting Treasury Cash
Management Incomings
Lockbox Import (RFEBLB00)
42. Check then “Import into bank data 42
storage” to update the appropriate 44
tables which store bank file data. 43
43. Click on “PC upload” if you are 45
uploading the file from your PC.
46
44. Enter the path of the file you are going 48 47
to import.
49
45. The procedure is “LOCKBOX”.
46. The Input record format is “BAI”, “BAI2”, 50
or “IDOC”. 51
47. Choose the search rule for the invoice
numbers from the drop down menu.
48. Check the “Enhanced invoice check”
box if you wish to use it.
49. Choose the algorithms for checks with
and without advice.
50. Click on “Assign value date” if you want
the postings to have an associated
value date.
51. Enter a business area and / or profit
center if you wish.

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52. Accounting Treasury Cash
Management Incomings
Lockbox Post (RFEBLB30)
53. This program is used for the EDI
Process. EDI files are imported into the
system and stored in the bank buffers. 53
This program is then run to post. Follow
the suggestions above except that you
enter the destination, origin, and
statement date rather than the lockbox
procedure.

54. Accounting Treasury Cash

Management Incomings
Lockbox Postprocess
55. Enter specific data to a lockbox import
or select the Lbox overview button to
display all files. 55

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56. Transaction SE38. Program name
RFEBLBT2.
57. The function of each of the fields is
explained in the previous section.

Related Documents
Appendix A – Tolerances and Reason Codes
Note 100943 Creating Lists of Exits
SD _ AR Line Item Enhancement Example
SD _ AR Line Item Enhancement Example

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Appendix A – Tolerances and Reason Codes

Overview

Tolerances
The use of tolerances is required by the system for clearing purposes. Tolerances can be set up
for users and for Customer/Vendor payments. You can set up blank tolerance groups for
customers, vendors, and users so that newly created customers and vendors will automatically
be assigned this tolerance group. The system requires at least one tolerance group per company
code. If you set up a blank tolerance group, then you don’t have to maintain that field in the
customer and vendor master records. You can also set up a blank tolerance group for users.
This way you don’t have to assign each user to a tolerance group. Users who are not specifically
assigned to a tolerance group in transaction OB57 are automatically assigned to the blank
tolerance group. Both sets of tolerances work together when clearing open items through the
lockbox processing. The stricter of the rules will always control whether the item is cleared or not.

Reason Codes
The “4” record in the BAI Lockbox file may contain an external reason code indicating the reason
for the payment difference. This external reason code must be linked to an internal reason code
which is used to charge off the payment differences to a separate account. This allows you to
clear customer items completely rather than having items posted on account which need to be
post processed. If the payment difference is within the tolerances set, the difference will be
posted to the charge off account. The external reason codes are linked to internal reason codes
per a conversion version. The conversion version is assigned to the customer master record on
the payment transaction screen.

Components
1. Define Customer/Vendor Tolerances (Transaction OBA3)
» Permitted Payment Differences
» This section refers to the total payment. In other words, you could be receiving one
check which is paying 10 invoices. The total amount of differences for all ten
invoices has to be within these tolerances.
» Example:
Permitted Payment Differences
Amount Percent
Gain 100.00 5.0 %
Loss 100.00 5.0 %

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» The two fields amount and percent work in conjunction. Given the configuration
above, and an invoice of 1000. The 5 percent would be used since 5 percent of
1000 is 50 which is lower than 100. The actual payment could be between 950
and 1050 to be within tolerance.
» Tolerances for Payment Advices
» This section refers to each invoice. In other words, each invoice is checked against
these specifications. This section and the one described above work together,
further restricting the clearing procedure.
» The fields work in conjunction exactly as the other set.
» Example:
Tolerances for Payment Advices
Amount Percent
Outst.receiv.from 100.00 5.0 %
Outst.payable from 100.00 5.0 %

» It is possible that you could have 3 invoices which each are within tolerance
and then be out of tolerance for the entire payment. Given the configuration
above and 3 invoices for 1000 each. The payment received is for 880
(customer deducted 40 from each invoice). Each invoice is within tolerance
because it is less than the 5 percent (50). Adding up the 3 invoices, however,
we have a difference of 120. This is not within tolerance for “payment
differences” because it is more than the 100 (amount). This is less than the 5
percent (150) but the program always uses the lower amount. In the example
above, the percent was used because it was lower; in this example, the amount
was lower.

2. Define Tolerance Groups for Employees (Transaction OBA4)

» Permitted Payment Differences
» This section refers to the total payment. In other words, you could be receiving one
check which is paying 10 invoices. The total amount of differences for all ten
invoices has to be within these tolerances. These tolerances are used along with
the tolerances from the customers and vendors to even further restrict the clearing
process.
» Example:
Permitted Payment Differences
Amount Percent
Gain 200.00 10.0 %
Loss 200.00 10.0 %

» The two fields amount and percent work in conjunction. The lower limit is the one
which takes affect. Given the configuration above and an invoice for 3000. The

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amount of 200 would be used since 10 percent of 3000 is 300 which is higher than
200. The actual payment could be between 2800 and 3200 to be within tolerance.
» Tolerances defined here work with tolerances defined for customers and vendors.
Again, the strictest tolerance will be used in the clearing procedure. Given the
configuration above for both users and customers/vendors, the parameters in the
customer/vendor tolerance configuration would be used since they are more
restrictive than the configuration for the users.

3. Assign Users to Tolerance Groups (Transaction OB57)

» If you create a blank tolerance group in the step above, you can skip this step. Users will
automatically be assigned to it. If you wish to have more than one tolerance group, you
will have to assign users accordingly in this transaction.

4. Define Reason Codes (Transaction OBBE)

» The 4 record in the BAI file may contain an external reason code which indicates the
reason for the payment difference. You can have the program automatically charge off the
differences to other accounts.
» C – Charge off Difference
» This check box indicates whether the payment difference will be charged off to
another GL account or charged back to the customer account as an open item.
Checking the box means that you wish to charge it off to another account.

5. Define Accounts for Reason Codes ( Transaction OBXL)

» For transaction ZDI, you can define the charge off accounts by reason code.

6. Maintain Conversion Version for External Reason Codes

(Transaction OBCR)
» Define here the versions for converting external reason codes to internal reason codes.

7. Assign External Reason Codes to Internal Reason Codes

(Transaction OBCS)
» In this table you map internal reason codes to external reason codes by conversion
version. It is possible to map different external reason codes from different conversion
versions to the same internal reason code.

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8. Change Customer Master Record ( Transaction FD02)
» In the company code data, payment transaction screen, enter the conversion version and
tolerance group for each customer.

1. OBA3 – Define Customer/Vendor

Tolerances
2. Enter tolerances for “permitted payment
differences”.
3. Enter tolerances for “payment advices”. 2

4. OBA4 – Define Tolerance Groups for

Employees
5. Enter tolerances for “permitted payment
differences”.

6. OB57 – Assign Users to Tolerance Groups

7. Assign users to tolerance groups if
necessary.

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8. OBBE – Define Reason Codes
9. Check the “Charge off” box for each reason
code you create.

10. OBXL – Define Accounts for Reason

Codes
11. Assign GL accounts per reason code which
will be posted for payment differences.
11

12. OBCR – Maintain Conversion Version for

External Reason Codes
13. Create conversion versions which will be
used to map external payment difference
reason codes to internal reason codes.

14. OBCS – Assign Internal Reason Codes to

External Reason Codes
15. Assign internal reason codes to external
reason codes by conversion version.

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16. FD02 – Change Customer Master Record
17. Enter the tolerance group for the customer.
18. Enter the conversion version for the 17
customer.

18

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OSS Note 45436 – Lockbox Transactions
R/3 note no. 45436 19.01.2000 Page 1

_______________________________________________________________________

Number 0045436
Version 0001 from 19.07.1996
Status Released for customer
Set by Gerhard Hafner on 19.07.1996
Language EN
Short text Lockbox / Advice: List of all transactions, tables

Administrator Gerhard Hafner

Component TR-CM-CM Basic Functions

_______________________________________________________________________

Long text

Symptom
This note contains a list of all the tables and transaction codes that
were used by the lockbox program.

Additional key words

FLB1, FLB2, FBE1, FBE2, FBE3, RFEBLB00, RFEBLB20, RFEBBU00

Cause and preconditions

-
Solution

Lockbox tables and transaction codes:

o FLB2 Import Lockbox File (RFEBLB00)

o FLB1 Postprocess Lockbox Data

o OBVS / T049A Posting Data

o OBVU / T049B General Parameters

Remittance advice tables and transaction codes

o FBE1 / FBE2 / FBE3 Create/change/display remittance advice

o OBBE / T053R: Reason codes

o OBXL / T030: Automatic posting (write off)

o OBCQ / T053G: Rem.Adv. types

o OBCW/T053D: Reason codes for clearing according to pay.advice

o OBCR / T053V: Reason codes conversion versions

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o OBCS / T053E: Reason codes conversion (allocation external -
internal

o OBCT / T053A: Selection Rules

o OBCU/T053C: Selection sequence(allocation external -internal)

o OB57 / T043: Assign User - Tolerance group

o OBA4 / T043T: Tolerance groups for users

o OBA3 / T043G: Customer Tolerances

o OBXH / T041A: Posting keys for clearing transactions

Source code corrections

_______________________________________________________________________

Valid releases

R/3 standard 30C - 30F

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