Umoja Job Aid Bank Reconciliation. Copyright United Nations 1

Transcription

1 Umoja Job Aid Bank Reconciliation 1

2 Agenda Course Introduction Module 1: Introduction to Bank Reconciliation Module 2: Outgoing Payments Module 3: Incoming Payments 2

3 Bank Reconciliation - Overview In Umoja prior day electronic bank statements are imported into the system daily, for every bank working day. The system validates each and every transaction on the imported bank statement to ensure that the transactions have matching operational and/or Treasury items in the Financial Ledgers. As the transactions are validated and matched, the open items originating from the Operational and Treasury Transactions are automatically cleared. Items which are not so cleared are to be manually matched and cleared. This User Aid explains how this manual matching and clearing is to be performed. Each transaction on an imported bank statements has a direct impact on the balance of the account that the UN keeps with the bank. It results in either a reduction in this balance (i.e. the bank has paid out money from our account) or in an increase in the money we have at the bank (i.e. the bank has received money into our account). The material in this User Aid is organized around these two types of transactions Outgoing and Incoming Payments. The remainder of this Introduction explains the framework in which Outgoing and Incoming Payments are manually matched and cleared. We ll consider the following successively: 1. House Banks, 2. Bank Clearing Accounts, 3. FEBAN, the tcode used for manual bank reconciliation, 3

4 Payments Processing through House Banks Treasury Pool Funds: With the introduction of House Banks, all bank accounts now belong to one of three Treasury Pool Funds. 1. Main Pool Cash & Investment 64VQA-> all operational in/out payments 2. EUR Pool Investment 64VQE 3. UNSMIS Pool Investment 64VQZ Operational Funds (e.g. Missions) no longer have balances in their own bank accounts. Instead they have equity in the Treasury Main Pool. The equity of each Fund in the Pool increases with the Fund s incoming payments and falls with outgoing payments. Outgoing Payments will be pooled by currency, based on House Bank Determination logic. Foreign currency payments will be delegated to the appropriate House Bank account, maintained by UNHQ Treasury. Local payments will continue to be the responsibility of the mission-based cashiers. Outgoing Payments will result in a decrease in the equity that mission fund has in the Treasury Main Pool 64VQA. Similarly, incoming payments will be recorded in the Treasury Main Pool Fund 64VQA and will result in an increase in the equity of the mission for which the money is destined. 4

5 House Bank Example - Outgoing Payment Sells supplies UNMISS Payment amount deducted from the balance of the UNMISS fund in the cash pool Funding Vendor in Lebanon Pays for supplies from its House Bank Account UN Treasury Fund Cash Pool LBP House Bank Account Suppose the UN Mission in South Sudan (UNMISS) purchases goods from a vendor in Lebanon and payment is by cheque in Lebanese Pounds (LBP). According to the house bank determination logic, the vendor will be paid from the LBP House Bank Account, managed by the United Nations Interim Force in Lebanon (UNIFIL). UNMISS s equity in the Treasury Pool will reduce by the amount of the payment. 5

6 Bank Clearing Accounts In Umoja besides the Nominal Account opened for each physical bank account, there are 7 other GL accounts associated with the same bank account. These 8 accounts are used to record the balance and reconciling items linked to the physical bank account. Example: The GL accounts of the bank account opened in the books of NY JP Morgan, Cash HQ New York JP Morgan USD Wire ACH Nominal are as follows: Cash HQ USD Nominal Cash HQ USD Cheque Out Cash HQ USD Cheque In Cash HQ USD EFT Out Cash HQ USD EFT In Cash HQ USD Invest Cash HQ USD Charges Cash HQ USD Unidentified Later, we ll see how these clearing accounts ensure that bank reconciling items do not appear in the GL Bank Nominal account. This ensures that the balance in the Nominal is equal to the balance in the physical bank account. 6

7 FEBAN The tcode used to access bank statements that have been uploaded is FEBAN. It is used as follows: 1 2 Enter FEBAN in the Command field Click the Enter icon 2 1 This opens the Selection of Bank Statements by Banks and Account Nos. screen. 3 Enter data in the following fields: Company Code House Bank Currency 4 Click on the Check button at the bottom right corner of the screen to verify input, then click on Execute if no errors are reported. This opens the Edit Bank Statement screen

8 FEBAN Note the following in the Edit Bank Statement screen. 1 House Bank whose statement is displayed. 2 Bank Statement Number 3 Unreconciled Outgoing Payment. It has a yellow status. 4 Unreconciled Incoming Payment. It has a red status. 5 Reconciled item. It has a green status. 6 Posting Areas. It is here that document numbers generated when reconciling items are posted are displayed. 7 External Transaction code: Code that identifies the transaction sent by bank

9 External Transaction External Transaction is a code sent by the bank. This code is mapped to SAP posting rules. When you enter FEBAN, First check the external transaction. It will help you to identify the posting rule and the type of actions you have to take. The posting rules are the following: Posting area 1 Posting area 2 +- Pst. rule Debit Credit Posting type Debit Credit Posting type Outgoing ZB01 Cheques Out Nominal 4 Clear account in debit Outgoing ZB04 EFT Out Nominal 4 Clear account in debit Incoming ZB06 Nominal EFT In 1 No clearing EFT in Clear Sub-ledger in credit Outgoing ZB08 Bank Charges Nominal 1 No clearing Unidentifi Incoming ZB09 Nominal ed 1 No clearing Outgoing ZB19 Unidentified Nominal 1 No clearing Investmen Incoming ZB07 Nominal t 5 Posting with clearing in credit Outgoing ZB17 Investment Nominal 4 Clear account in debit Incoming ZC06 Nominal EFT IN 9

10 Other display of Bank statement By clicking on View> other display, you will see the bank statement with another display: On this display, you can see the posting rule You can also download to excel file 10

11 Agenda Course Introduction Module 1: Introduction to Bank Reconciliation Module 2: Outgoing Payments Module 3: Incoming Payments 11

12 Outgoing Payments Creation Accounts Payable Unit At the time an accounts payable is established (MIR7 or FV60) a vendor s invoice (KR doc type) is created with these entries: Dr. GR-IR or Expense Cr. Vendor Cashier s Office When the cashier generates payment (F110 and FPRL_LIST) an Outgoing Payment (KZ doc type) is created with these entries: Dr. Vendor Cr. Cash EFT AP 12

13 Outgoing Payments Clearance of Vendor Open Item When an Outgoing Payment KZ is matched to an open payable item KR, this clears the vendor s account for that item. For instance Outgoing Payment is created to settle vendor s invoice The status of the KR doc turns from red to green with a zero balance displayed for the item as shown below. 13

14 Outgoing Payments Bank Clearing Accounts Unlike before, when the cashier generates payments in Umoja (creates Outgoing Payments KZ), the nominal bank account or cash is not immediately credited in the GL. Instead the credit is temporarily booked to one of two bank clearing accounts for Outgoing Payments : 1. Cash Cheque Out (for payments by cheque) or 2. Cash EFT AP (for payments by Wire) As mentioned earlier these are two of the seven GL accounts created to record balances and reconciling items for each House Bank that UN Treasury opens. The task of reconciling transactions with the bank, which result from the Outgoing Payments that we create is essentially the processing of the credits that are temporarily booked to these clearing accounts when the cashier generates payments. While some of the transactions will reconcile automatically, others will have to be cleared manually. Whether a bank transaction resulting from our Outgoing Payment will be reconciled automatically or manually depends on what happens when bank statements are uploaded into Umoja. 14

15 Outgoing Payments Bank Statement Upload 1. Bank statements will be uploaded unto Umoja on a daily basis. A statement will show any prior day s Incoming Payments received by a House Bank, as well Outgoing Payments paid out from the House Bank. 2. For each Outgoing Payment listed in an uploaded bank statement, Umoja will generate a ZR document with the following entries in the GL: Dr. Cash EFT AP (or Cheque Out) Cr. Bank Nominal This reflects the fact that the bank has debited our account for the disbursement they made on our behalf. Umoja thus reduces the balance of the Bank Nominal in the GL to synchronize it with the balance held by the bank. Put differently, in principle, as far as Outgoing Payments are concerned the GL Bank Nominal a/c will only be credited when the bank has effectively paid out money as instructed by the UN. Any Outgoing Payments generated by us but for which the bank has not yet made disbursements will appear in the GL Cash EFT AP (or Cheque Out) and not in the GL Bank Nominal. Note: Later on, we ll examine what happens when the bank debits our account in their books without an instruction from us to them to make a disbursement on our behalf. 15

16 Outgoing Payments Automatic Clearance As mentioned earlier, when the cashier generates an Outgoing Payment, Umoja creates a KZ document clearing the vendor s account i.e.: Dr. Vendor Cr. Cash EFT AP (or Cheque Out) We ve also seen that when an uploaded bank statement shows a debit in our account at the bank, Umoja creates a ZR document crediting our GL Bank Nominal i.e.: Dr. Cash EFT AP (or Cheque Out) Cr. Bank Nominal Umoja will attempt to establish a link between the credit in the KZ document and the debit in the ZR document. Two possible outcomes exist. 1. If both entries relate to the same transaction, Umoja will establish a match and use the ZR document to clear the KZ document. In this case the ZR document could be viewed as confirmation to us that the instruction given in the KZ document has been executed successfully. We can therefore close the case. No more bank reconciliation work is needed for this Outgoing Payment. 2. If a link can t be established, automatic clearance will fail. We will have to manually apply the ZR document to the KZ document. Otherwise, both documents will remain open (un-reconciled items). 16

17 Outgoing Payments Automatic Clearance The match between the KZ and ZR documents is established by two elements: 1. 1 KZ document number. This is the Payment Doc. Number generated by the system after the cashier has successfully executed the process steps using t-codes F110 and FPRL_List (Assign, Approve and Pay). This number is included in the instructions that go to the bank. In return, the bank is required to reference the number in their bank statement against the corresponding disbursements made Amount. A match will not be established if there is a discrepancy between the amounts in both documents, whatever the magnitude of the difference. Example A payable of $1,400 was established for Vendor through KR The cashier generated payment (KZ ) via House Bank JPM Chase US with credit to clearing A/c Csh HQ USD EFT AP. The bank paid out the money and debited our account in their books by $1,400, as well as included the ref in bank statement # Let s see what happens when this statement is uploaded. 17

18 Outgoing Payments Automatic Clearance To access a given bank statement: Enter FEBAN in the Command field and click the Enter icon. 1 This opens the Selection of Bank Statements by Banks and Account Nos. screen. 2 Enter data in the following fields: Company Code, House Bank, Bank Statement#, Currency. Click on the Execute button to run the search

19 Outgoing Payments Automatic Clearance The Edit Bank Statement Screen displays. Note the following: 1. 4 The statement no. is 13283, for House Bank USCH1, currency USD, closing bal. $3, The transaction uploaded has reduced our bank nominal balance it is an Outgoing Payment (negative sign) Also the status of the transaction is green, meaning that the debit of the ZR document ( ) created by Umoja when the statement was uploaded automatically cleared with the credit of the existing KZ document ( ) Double click the ZR document # to see its accounting entries. 5. Note that PmtAcc field is empty

20 Outgoing Payments Automatic Clearance Review ZR Doc As expected, the ZR doc debits EFT AP and credits Bank Nominal. Both accounts are in the GL, hence the 50 and 40 posting keys used respectively. Note that the Ref. generated by the system is a combination of the House bank, currency and bank statement number. Also note that as both accounts belong to the Treasury Main Pool they have the same Fund (64VQA) and Business Area (S101). This information will be helpful when we manually apply the ZR to a KZ document. 20

21 Outgoing Payments Automatic Clearance Review EFT AP A/c Next, review the EFT AP a/c to confirm that the existing credit entry from the KZ document has indeed been cleared by the debit entry from the ZR doc Type FAGLL03 at the command field and click Enter. The G/L Account Line Item Display G/L View screen displays Enter in the GL account field Select Cleared Items in Line Item Selection Enter the date the item was cleared in the Clearing Date field Click Execute to run the search. The results are shown in another G/L Account Line Item Display G/L View screen, which opens

22 Outgoing Payments Automatic Clearance Review EFT AP A/c Note that effectively, the credit of the KZ document has been cleared by the debit of the ZR document. This is attested by the green status that both lines now have. The clearing document number is , which is nothing other than the ZR document number. 22

23 Outgoing Payments Manual Clearance Automatic clearance of Outgoing Payments when bank statements are uploaded is the ideal. However, this will not always be the case for a number of reasons: a) An Outgoing Payment may have indeed been generated by the cashier i.e. a KZ doc exists. However, the bank may incorrectly quote either the KZ doc number or amount of the Outgoing Payment on the bank statement. As a result, when the statement is uploaded Umoja will be unable to establish a match between the KZ and ZR documents and thus fail to clear them automatically b) An Outgoing Payment doesn t exist i.e. the bank has debited our account when our cashier has not generated payment and sent them an instruction to disburse funds on our behalf. This could be due to a number of reasons such as: The bank debited our account in error. Bank charges and other fees that the bank directly imputes to us but for which we do not need to raise a payable and generate an Outgoing Payment. The disbursement by the bank is legitimate but it was made before we had raised the payable and the cashier generated an Outgoing Payment. 23

24 Outgoing Payments Manual Clearance Whatever the reason, each time the bank debits our account, Umoja will always create a ZR document crediting our GL Bank Nominal at the time the bank statement is uploaded i.e.: Dr. Cash EFT AP (or Cheque Out) Cr. Bank Nominal Bank reconciliation in this case is all about how we manually clear this debit of the of Cash EFT AP (or Cheque Out) before we close our books at the end of the month. How this is done depends largely on the reason why automatic clearance failed in the first place. We ll examine this in greater detail in a series of cases. a. Case 1: The bank wrongly references a disbursement they made in honour of an instruction we gave them (Outgoing Payment). b. Case 2: The bank debits our account when we did not instruct them to disburse funds on our behalf i.e. they debited us in error. c. Case 3: The bank correctly charges our account but for expenses for which we do not have to raise a payable and generate an Outgoing Payment (i.e. bank charges). 24

25 Outgoing Payments Manual Clearance Case 1: Wrong Reference of an Outgoing Payment on the Bank Statement Suppose the cashier generated Outgoing Payment (KZ) ref for the amount of $500 via House Bank JPM Chase. However, the bank incorrectly quoted the KZ ref. # on the bank statement. When the statement was uploaded, this is what happened. 1. Automatic clearance failed as expected. 2. A ZR document was created with a credit to Bank Nominal and a debit to Cash EFT AP. It is this debit line that has to be manually applied to the credit of the existing KZ document. 25

26 Outgoing Payments Manual Clearance To manually clear an item, first locate the bank statement on which it is found through FEBAN as described earlier. In our case, we are looking for statement 23 of House Bank USCH Double click the item. This brings up the ZR doc# but this time it appears in the PmtAcc field. When manual clearance is completed another ZR document will be generated in the now empty Doc. Field Double click the PmtAcc Doc#. It will show the debit to Cash EFT AP and credit to Bank Nominal Click Statement Items and click Post

27 Outgoing Payments Manual Clearance The Post with Clearing Open Items Screen opens. 4. Note that all open items are displayed and selected by default. We are only interested in matching the remaining debit line of ZR to the open credit line of KZ Accordingly, double click any other amount we are not interested in. This deselects the amounts. 6. When only the lines of interest to us remain selected the Amount Entered and Assigned fields in the totals section below will be both zero. This means that the sum of debits equals the sum of credits. 7. Click on Document in the menu bar and select Simulate

28 Outgoing Payments Manual Clearance The Post with Clearing Display Overview Screen opens. Note the following: aa) The document type is ZR. The is the second ZR doc we ll be having. The first ( ) was created by the system with credit to Bank Nominal and two debits to EFT AP. b) Both the reference and Doc. Header Text are system generated with the former being a combination of House Bank, Currency of account and bank statement number. c) c Both lines relate to the same GL account, Cash EFT AP, the debit being the second debit line of ZR and the credit being the credit line of KZ d) d The sum of debits is equal to the sum of credits. c 8 d b a 8. Click on the Save icon to post the document. 28

29 Outgoing Payments Manual Clearance 9. 9 A message with a green status appears at the bottom of the screen informing that the document has been posted. Note the document number. 10. Return to FEBAN and double click the item just reconciled. Note that the status has changed from yellow to green 11. Also note that in Posting Area 1 there is a second ZR doc ( ) shown in the Doc field. It is this document that carries the entries of the reconciliation we just performed. 12. Double click on both ZR and to review their entries

30 Outgoing Payments Manual Clearance a/ ZR Dr. Cash EFT AP Cr. Bank Nominal As indicated earlier, this entry will always be generated each time an uploaded bank statement shows that the bank has debited our account, whether we generated an Outgoing Payment or not. b/ ZR Dr. Cash EFT AP Cr. Cash EFT AP Both the debit and credit are in the same account but not matched to each other. Manual reconciliation is essentially pairing the two entries. 30

31 Outgoing Payments Manual Clearance Review EFT AP A/c As was the case with automatic clearance, let s now review the EFT AP a/c to see how the clearing entries played out. Follow the same steps described earlier to access the EFT AP a/c. Note that effectively, There are two ZR docs, and We now have four clearing entries, instead of two as we did for automatic clearance. The debit of the first ZR and credit of KZ were cleared by the second ZR doc

32 Outgoing Payments Manual Clearance Case 2: The Bank Debits Our Account in Error A more serious case is when the bank debits our account in their books when we have not and do not intend to create an Outgoing Payment. Suppose the amount is $2,000. When bank statement #117 is uploaded. 1. Automatic clearance fails as expected. 2. A ZR document is created with a credit to Bank Nominal and a debit line to Cash EFT AP. Manual reconciliation in this case is about moving this debit away from the Cash EFT AP a/c to Cash Unidentified until the bank clarifies the situation. 32

33 Outgoing Payments Manual Clearance To manually clear the item, first locate the bank statement on which it is found through FEBAN as described earlier. In our case, we are looking for statement 117 of House Bank USCH Double click the item. This brings up the ZR doc# but this time it appears in the PmtAcc field. When manual clearance is completed another ZR document will be generated in the now empty Doc. Field Double click the PmtAcc Doc#. It will show the debit to Cash EFT AP and credit to Bank Nominal Click Statement Items and click Post

34 Outgoing Payments Manual Clearance The Post with Clearing Open Items Screen opens. 4. All open items are displayed and selected by default. 5. Click the Charge off diff. button. This brings you to the Post with Clearing Display Overview screen where the system will clear the debit balance in GL (credit to GL ) and manually a debit line will be posted to the Bank Unidentified A/C associated with the House Bank

35 Outgoing Payments Manual Clearance 6. 6 Enter posting key 40 in the PstKy field. This is the key used when debiting a GL account Enter GL in the Account field (Unidentified a/c of this House Bank: USCH1) where the unrecognized charge will remain until clarification is obtained from the bank why they debited our account without an instruction from us to do so Click on the Enter icon. This takes you to the Post with Clearing Add G/L Account Item screen where additional data for the debit line will be entered. 35

36 Outgoing Payments Manual Clearance 9 Confirm that this is indeed the debit line that we are entering. 10 Enter the amount to be cleared in the Amount field or * for the balance. 11 Enter a descriptive text in the Text field. Click on More Data for additional data fields. The Coding Block screen opens

37 Outgoing Payments Manual Clearance 13. Enter the Business Area in the Business Area field. Since Unidentified a/c is an account of the Treasury Main Pool, the Business Area to enter is S Enter the Fund in the Fund field. Again because we are entering data for an account of the Treasury Main Pool, the Fund is 64VQA. 15. Enter GMNR in the Grant field. 16 Click on the Enter icon. This takes you back to the Post with Clearing Add G/L Account Item Screen

38 Outgoing Payments Manual Clearance 38

39 Outgoing Payments Manual Clearance Click Document in the menu bar and select Simulate. This opens the Post with Clearing Correct G/L Account item

40 Outgoing Payments Manual Clearance Note the following: a) a The document type is ZR. This the second ZR doc we ll be having. The first ( ) was created by the system with credit to Bank Nominal and debit to EFT AP. b Both the reference and Doc. Header Text are system generated with the former being a combination of House Bank, Currency and bank statement number. c The credit of the Cash EFT AP clears the un-reconciled debit from the first ZR document Cash Unidentified is now debited. d The sum of debits is equal to the sum of credits. 18 Click on the Save icon to post the document. d b c a 40

41 Outgoing Payments Manual Clearance A message with a green status appears at the bottom of the screen informing that the document has been posted. Note the document number. 19 Return to FEBAN and double click the item just reconciled. Note that the status changed from yellow to green Also note that in Posting Area 1 there is a second ZR doc ( ) shown in the Doc field. It is this document that carries the entries of the reconciliation we just performed. Double click on both ZR and to review their entries

42 Outgoing Payments Manual Clearance a/ ZR Cr. Bank Nominal Dr Cash EFT AP As indicated earlier, this entry will always be generated each time an uploaded bank statement shows that the bank has debited our account, whether we generated an Outgoing Payment or not. b/ ZR Dr. Cash Unidentified Cr. Cash EFT AP The debit in ZR has now been transferred to Cash Unidentified temporarily pending clarification from the bank. 42

43 Outgoing Payments Manual Clearance Review EFT AP A/c Once more, let s now review the EFT AP a/c We note that both the debit and the credit appear cleared (green). 43

44 Outgoing Payments Manual Clearance Case 3: Bank Charges At times the bank may correctly charge our account but for expenses for which we do not have to raise a payable and generate an Outgoing Payment. This will be the case with bank charges and other commissions that bank directly imputes to our account. As before, at the time the bank statement is uploaded, Umoja creates a ZR document: Dr. Cash EFT AP and Cr. Bank Nominal Since a payable will not be established and consequently neither an Outgoing Payment (KZ) will be generated, bank reconciliation in this case will consist of: 1. Raising a JV to transfer the debit from the Cash EFT AP account to an expense account. 2. Ensuring that the assignment of both the debit (from the bank statement, doc type ZR) and the credit (from the JV, doc type SA) have the same assignment or clear them using F-03 (in case there are many debits to be cleared). 3. Bank charges are usually not cleared using FEBAN as it has been designed that these transactions (they might be many lines) will appear as cleared in FEBAN (but still open in the GL). With a JV many lines could be cleared in one go. 44

45 Agenda Course Introduction Module 1: Introduction to Bank Reconciliation Module 2: Outgoing Payments Module 3: Incoming Payments 45

46 Incoming Payments Overview The revenue the UN receives either comes from exchange transactions (when we sell goods or services or simply recover costs for services rendered) or from non-exchange transactions (e.g. assessed and voluntary contributions). Ideally, receivables or recoverables need to be established prior to the receipt of any type of revenue. For revenue received through Electronic Funds Transfer, the Umoja solution is configured to ensure that the Incoming Payment is automatically applied to the open accounts receivable/recoverable of the debtor/creditor, if certain conditions are met. Bank reconciliation will not be needed in this case. In the majority of cases though, the conditions for automatic clearance will not be met we ll have to manually apply Incoming Payments to the accounts of those who made them. This is the focus of this module. We ll look at manual bank reconciliation of Incoming Payments in a number of cases: Case 1: Full amount of receivable is received but the bank statement incorrectly references the payment Case 2: Only part of what was owed is received Case 3: Payment is received from a vendor for whom a recoverable already exists Case 4: Payment is received prior to a receivable/recoverable being set up Case 5: Payment has been rejected by the bank Case 6: Payment is received in error Before looking at how to reconcile Incoming Payments. Let s first see how to identify Open Customer Items. 46

47 Identifying Open Customer Items Open Customer Items can be identified as follows: 1 Type ZARFBL5N in the Command Field and click Enter. This opens the Financial Accounting Accounts Receivable screen. 2 Keep the Customer account field open. 3 Enter the Business Area. 4 In Line Item Selection choose Open Items. 5 For a more refined specification of the search criteria click the Dynamic Selections icon. 6 Click Execute to run the search

48 Identifying Open Customer Items A listing of all customer open items that meet the search criteria is displayed. Note that all open items have a red status. 48

49 Incoming Payments Bank Clearing Account As explained earlier, with the introduction of House Banks, all bank accounts of missions now belong to one of the three Treasury Pool Funds 64VQA: Main Pool Cash & Investment. As a result, all Incoming Payments are recorded in 64VQA. This leads to two sets of entries (after bank reconciliation): 1. An increase in the equity of the mission in 64VQA for which the money is destined i.e. the mission that was owed money. 2. A decrease in the amount owed by the customer who made the payment. When an EFT Incoming Payment is received, the customer s account is not immediately credited in the GL. Instead the credit is temporarily booked to the EFT In a/c. This is one of the seven GL accounts created to record balances and reconciling items for each House Bank that UN Treasury opens. The task of reconciling transactions with the bank, which result from the Incoming Payments that we receive, essentially consists of moving these credits from the EFT In account to the respective accounts where the funds are to be lodged. This maybe done automatically by Umoja (we see how shortly), or manually. Whether a bank transaction resulting from Incoming Payments will be reconciled automatically or manually depends on what happens when bank statements are uploaded into Umoja. 49

50 Incoming Payments Automatic Clearance Bank Statement Upload When the Bank Statement of the previous day is uploaded into Umoja, a Bank EFT-In clearing account will be credited by the debit of EFTs received as follows: Dr 64VQA Bank Nominal (GL A/c 11011X10) Cr 64VQA Bank EFT In Clearing (GL A/c 11011X16) The credit is next moved to a customer/vendor s account. Matching to Clear If the incoming payment contains information e.g. invoice number, that identifies an existing receivable (customer) or recoverable (vendor) for the same amount, Umoja will establish a match between the two. The receivable or recoverable will be automatically cleared by the incoming payment. Dr 64VQA Bank EFT In Clearing (GL A/c 11011X16) Cr 20OLA Customer/Vendor Open Item Equity Increase in Treasury Pool At the same time the equity of the Fund for which the incoming payment was meant will increase in the Treasury Pool. Dr 20OLA Equity in Pool Cr 64VQA Equity in Pool 50

51 Incoming Payments Manual Clearance Case 1: Incorrect Reference on Bank Statement As shown earlier, when the Incoming Payment hits the Nominal Account, an EFT-In account is initially credited i.e. Dr 64VQA Bank Nominal Cr 64VQA Bank EFT In Clearing The task of the bank reconciler is to move the funds from the EFT-In account to a Customer/ Vendor s account when the system fails to do so automatically. One reason why automatic clearance will fail is when the reference on the bank statement for the Incoming Payment doesn t match an open receivable or recoverable item in the system. To illustrate how manual clearance is done in this case, we ll use the following data set. Customer: Government of Belgium Outstanding Amount: US$ 15,700 Being: Sale of Publications AR Document #:

52 Incoming Payments Manual Clearance To manually clear the item, first locate the bank statement on which it is found through FEBAN as described earlier. In our case, we are looking for Item #11 of statement of House Bank USCH2. 1 Double-click the open item you intend to reconcile. Note that a document number appears in Posting Area 1 only. This is the reconciliation doc ZR showing: Dr. Bank Nominal Cr. EFT In 2 Click the Post icon. This starts the process to move the funds from EFT In (debit) to the Customer s A/c (credit). At the end of the process a document number will appear in Posting Area

53 Incoming Payments Manual Clearance In the Post with Clearing Select Open Items screen that opens: 3 Enter the Customer s Account in the Account Field. 4 Enter D in the Account Type Field. 5 Select the Amount button from Additional Selections. 6 Click on Process Open Items. This opens the Post with Clearing Enter Selection Criteria screen. 7 Enter the amount you intend to clear in the From field of the Amount Section. 8 Click Process Open Items. This opens the Post with Clearing Process Open Items screen. 7 53

54 Incoming Payments Manual Clearance A list of open items with the amount specified earlier is displayed. Their total is shown in the Assigned field in the Processing Status section (bottom right). 9 De-select (by double clicking) the amounts we do not intend to match to the Incoming Payment until the Amount entered = Amount Assigned. Click on Document in the menu bar and select Simulate. This opens the Post with Clearing Display Overview screen

55 Incoming Payments Manual Clearance Take note of the following: a. Doc type is DZ, Incoming Payment. b. The posting key for the debit entry is 40 because we are debiting a GL account, while 15 is used to credit a Customer a/c. c. The sum of debits equals the sum of credits. Click on the Save icon to Post the document. A message appears at the bottom of your screen with the posted document number

56 Incoming Payments Manual Clearance Return to the bank statement and double click the item you just reconciled. Note the following: a. The status is now green. b. A document number now appears in Posting Area 2. Double click each of the two document numbers in turn

57 Incoming Payments Manual Clearance a/ ZR Dr. Bank Nominal Cr. Cash EFT In This entry will always be generated each time an uploaded bank statement shows that the bank has credited our account for an Incoming Payment, whether we established a receivable or not. b/ DZ Dr. Cash EFT In Cr. Customer Note the differences in posting keys, Business Area and Fund, as we debited a GL a/c and credited an AR Subledger a/c. Further, P003 ensures UNIFIL s equity increases in 64VQA by amount received. 57

58 Incoming Payments Manual Clearance Review EFT In A/c Let s now review the EFT In a/c We note that though we have moved the credit that was temporarily booked there to the account of the customer who made the payment, the two entries in the EFT In a/c still have a red status. When they are matched against each other as part of batch clearing process, the status will change to green and a document number will appear in the now empty Clrng Doc field. 58

59 Incoming Payments Manual Clearance Case 2: Partial Payments The bank may correctly reference an Incoming Payment on the bank statement. However, automatic clearing may still fail because the amount on the statement is different from the amount in the customer open item. For instance, we might receive a lesser amount than expected. This could be due to exchange rate differences, bank charges or because the customer disputes parts of the invoice. Whatever the reason, when the bank statement is uploaded, the system will: Dr. Bank Nominal Cr. EFT In It will then be the duty of the bank reconciler in collaboration with the Accounts Receivable Unit to move the funds from EFT In to the customer s account. If the difference is due to bank charges or exchange rate fluctuation, a JV should be raised to clear it. Scenario Customer Municipality of Deir Mimas, used our air asset in June They were invoiced on 08 Oct. 13 for the full amount of $4,500. The customer however contests this amount because food wasn t served on board. They only paid $4,000 directly into our account on 08 Oct. 13. The AR document number was correctly referenced in Bank Statement # of House Bank USCH2. However, when the statement was uploaded on 09 Oct. 13 automatic clearance failed because of differences in amount between the Incoming Payment and customer open item. We are required to do the manual reconciliation. 59

60 Incoming Payments Manual Clearance To manually clear the item, first locate the bank statement on which it is found through FEBAN as described earlier. In our case, we are looking for Item #2 of statement of House Bank USCH Double-click the open item you intend to clear. Note that the Doc Field in Posting Area 2 is empty Click on the Save icon to post (can also be done via Ctrl + S). This opens the Post With Clearing Select Open Items screen

61 Incoming Payments Manual Clearance 3. 3 Enter the Customer s Account in the Account Field Enter D in the Account Type Field In Additional Selections maintain the defaulted None option Click the Process Open Items icon. This opens the Post With Clearing Process Open Items Screen

62 Incoming Payments Manual Clearance 7 The Post with Clearing Process Open Items screen opens with the Standard tab open by default. Since we are not clearing the full amount of an open item, click on the Partial Pmt Tab. 8 Double click the amount of the item you intend to clear. This highlights the amount and also duplicates it in the Payment Amount. 9 Delete the amount in the Payment Amount field and replace it by the partial payment you intend to make. 10 Press Enter to validate. Note that the Not Assigned becomes zero. 11 Click on Document on the menu bar then Simulate

63 Incoming Payments Manual Clearance 12 When the Post with Clearing Display Overview screen opens, note that the doc type DZ - Incoming Payment, corresponds with the posting key for line 2 i.e. credit of a customer account for an Incoming Payment. 13 Click the Save icon to post and note the document number that displays at the bottom of the page when posting is done

64 Incoming Payments Manual Clearance Return to FEBAN and double click on the Incoming Payment that was just applied to a Customer A/c. It now displays a green status. Note that the document carrying the reconciliation entries now appears in Posting Area 2. Double click the documents in Posting Areas 1 and

65 Incoming Payments Manual Clearance Review EFT In A/c Once more, let s now review the EFT In a/c We note that though we have moved the credit that was temporarily booked there to the account of the customer who made the partial payment, the two entries in the EFT In a/c still have a red status. When they are matched against each other as part of batch clearing process, the status will change to green and a document number will appear in the now empty Clrng Doc field. 65

66 Incoming Payments Manual Clearance Review Customer Open Item A review of the customer s account for Invoice # (DR doc type) shows that though a partial payment of $4,000 was received on , the invoice is still outstanding by $

67 Incoming Payments Manual Clearance Case 3: Payments from Vendors Recoverable amounts from staff members, MILOBs, Commercial Vendors and other Business Partners who do not have customer roles in Umoja are done through credit memos established in the Accounts Payable Sub-ledger. Incoming Payments from these vendors to settle outstanding items will have to be matched and cleared manually. Scenario Staff member Abou Saleh, owed UNIFIL $ for private telephone calls he made while on mission there during Pilot Go-live last July. A credit memo (Doc type KG # ) was raised to record this recoverable on 30 August The staff member transferred $ to our House Bank USUS1. The Incoming Payment was reflected in our bank statement #13279 of 09 October Perform the manual reconciliation. 67

68 Incoming Payments Manual Clearance To manually clear the item, first locate the bank statement on which it is found through FEBAN as described earlier. In our case, we are looking for Item #6 of statement of House Bank USUS1. 1 Double-click the open item you intend to clear. Note that the Doc Field in Posting Area 2 is empty. 2 Click on the Save icon to post (can also be done via Ctrl + S). This opens the Post With Clearing Select Open Items screen

69 Incoming Payments Manual Clearance 3 Enter the Vendor s Account in the Account Field. 4 Enter K in the Account Type Field. 5 In Additional Selections click on Document Number. Click the Process Open Items icon. This opens the Post With Clearing Enter Selection Criteria Screen

70 Incoming Payments Manual Clearance 7 Enter the KG doc number in the From field of the Document Number section. 8 Click the Process Open Items icon. This opens the Post With Clearing Process Open Items Screen

71 Incoming Payments Manual Clearance 9 Since we entered the document number of the credit memo we intend to clear only one result is returned, which matches with the amount of the Incoming Payment. Note that Not Assigned is zero. 10 Click on Document on the menu bar then Simulate. This opens the Post with Clearing Overview screen

72 Incoming Payments Manual Clearance 11 When the Post with Clearing Display Overview screen opens, note that the doc type DZ - Incoming Payment, corresponds with the posting key for line 2 i.e. credit of a vendor account for an Incoming Payment. 12 Click the Save icon to post and note the document number that displays at the bottom of the page when posting is done

73 Incoming Payments Manual Clearance Return to FEBAN and double click on the Incoming Payment that was just applied to a Customer A/c. It now displays a green status. Note that the document carrying the reconciliation entries now appears in Posting Area 2. Double click the documents in Posting Areas 1 and

74 Incoming Payments Manual Clearance Review EFT In A/c Once more, let s now review the EFT In a/c We note that though we have moved the credit that was temporarily booked there to the account of the vendor who made the partial payment, the two entries in the EFT In a/c still have a red status. When they are matched against each other as part of batch clearing process, the status will change to green and a document number will appear in the now empty Clrng Doc field.. 74

75 Incoming Payments Manual Clearance Review Vendor Open Item A review of the Vendor s account for Credit Memo # (KG doc type) shows that the outstanding recoverable of $100 has been cleared by the Incoming Payment (DZ). No more bank reconciliation work is needed. 75

76 Incoming Payments Manual Clearance Case 4: Payments received before receivable is raised In exceptional cases a customer may pay the UN before a receivable has been raised in the customer s account. Automatic clearance of the Incoming Payment will fail for an obvious reason. If by the time of Month End Closing the receivable is not yet raised, the Incoming Payment will be moved to GL a/c AP Unapplied Cash, where it will remain until a decision is made on what to do with it. Scenario On 24 th October an Incoming Payment of USD 1,200 was included in bank statement 1265 of House Bank USCH1. By the 30 th of October when the Month End Closing was done, it was still not possible to move the funds to a Customer or Vendor a/c because the receivable or recoverable could not be established. It was decided to move the funds to AP Unapplied Cash until the receivable or recoverable is set up. 76

77 Incoming Payments Manual Clearance To manually clear the item, first locate the bank statement on which it is found through FEBAN as described earlier. In our case, we are looking for Item #7 of statement 1265 of House Bank USCH1. 1 Double-click the open item you intend to clear. Note that the Doc Field in Posting Area 2 is empty. 2 Click on the Save icon to post (can also be done via Ctrl + S). This opens the Post With Clearing Select Open Items screen. 3 Click on the Back icon. This opens the Post with Clearing Display Overview screen

78 Incoming Payments Manual Clearance 4 When the Post with Clearing Display Overview screen opens, note that the doc type DZ. Also note that Line 1, the debit line is automatically generated by the system. We now have to enter Line 2s: 5 Enter 50 in the Pstky field and the in the Account field. 6 Click Enter. This opens the Post with Clearing Add Customer Item screen

79 Incoming Payments Manual Clearance 7 Enter the amount in the Amount field. 8 Enter a descriptive test in the text field. 9 Click on More Data. This opens the Coding Block Screen

80 Incoming Payments Manual Clearance Enter Business Area, 10 Fund and Grant. Click on Enter. This 11 opens the Post with Clearing Correct G/L Account Screen. Click on Document in 12 the Menu Bar and select Simulate. This opens the Post with Clearing Display Overview screen

81 Incoming Payments Manual Clearance Review the two lines, the 13 doc type and the reference (House Bank + Currency + Bank Statement Number). Click on Save to post the DZ document and note the 14 number that displays at the bottom of the screen

82 Incoming Payments Manual Clearance Return to FEBAN and double click on the Incoming Payment that was just applied to the Unapplied Cash a/c. It now displays a green status. Note that the document carrying the reconciliation entries now appears in Posting Area 2. Double click the documents in Posting Areas 1 and

83 Incoming Payments Manual Clearance Case 5: Payment has been rejected by the bank In some cases, payments are rejected by the bank. Scenario On an Incoming Payment of USD ,42 was included in bank statement of House Bank USCH1. After communication with treasury department, bank reconciler finds out that the amount has been returned by the bank. It is the total for 2 payments rejected by the bank Bank reconciler is going to transfer the amounts to a clearing account. Account payable will then reissue the payment. 83

84 Incoming Payments Transfer to clearing account To transfer the item, first locate the bank statement on which it is found through FEBAN as described earlier 1 Double-click the open item you intend to clear. Note that the Doc Field in Posting Area 2 is empty. Click on the Save icon to post (can also be done via 1 Ctrl + S). This opens the Post With Clearing Select Open Items screen. Click on the Back icon. 2 This opens the Post with Clearing Display Overview screen

85 Incoming Payments Transfer to clearing account Enter Posting key = 50 Enter GL Account (Cash Payment Rejected by Bank) Click on enter

86 Incoming Payments Transfer to clearing account Enter Amount of the original invoice Click on more data Enter Business Area, Fund and Grant of original invoice Click on enter 86

87 Incoming Payments Transfer to clearing account Enter Posting Key 40 and G/L account for Bank charges Click on More Data 87

88 Incoming Payments Transfer to clearing account Enter Business Area, Cost Center, Fund and Grant of original invoice Click on enter Click on Overview Icon 88

89 Incoming Payments Transfer to clearing account Click on Save 89

90 Incoming Payments Transfer to clearing account Remember that whenever an FI document is posting against two different funds, the system automatically posts another document (17xxxxxx) against the Treasury Pool Fund. You can see it selecting Environment/Document Environment/Accounting Documents. 90

91 Incoming Payments Transfer to clearing account Double click in the 17xxxxxx document to see the interfund postings done by the system. 91

92 Incoming Payments Manual Clearance Case 6: Payments received in error Exceptionally, payments may be made to the UN in error. Prior to closing the month the money should be moved from EFT In to another GL a/c Unapplied Cash, where it will remain until a decision is made on what to do with it. The steps to move the funds from EFT In to Unapplied Cash are the same as those described in Case 5. 92