• Have you ever got lost in the enormous chart of accounts due to thousands bank accounts?
  • Have you ever struggled for weeks for treasury operation only because there are so many g/l accounts to be set up ?
  • Have you ever lost in the complex setting/configurations for bank payment?

With the newest release of CE2008, you might take a relief from all the tedious task, and be more focus on what's important. But how to do that? Let's get started with general introduction and public documentations you could refer to so far.

  • Help portal: Assigning G/L Accounts to House Bank Accounts
  • Help portal:Automatic Determination of Bank Sub Accounts
  • SAP Best Practice scope item Basic Bank Account Management (BFA) -> section 4.1.3 GL Account Reduction and Migration (Optional)

In this blog, I plan to use one example to helps you better understand the logic behind and how to set up G/L Account as well as house bank accounts in a more simplified way.
Instead of using G/L Accounts (bank), the principle is treating 'House Bank Account' as a bank account in all payment and posting processes.

-----------------------------   WHY? ----------------------------------------------------------------

  • ONLY one time configuration --> Set up a set of G/L accounts
  • Multi-times usage --> Link one bank reconciliation account to multi new house bank connections
  • ALL payment transaction/apps work out of the box --> with ZERO configuration 
  • * provided that the set of accounts with its settings matches the requirements of the connected house bank

One extreme case is that, you might need 9000 G/L Accounts in the past for 1000 bank accounts. But now, you only need several bank sub account to reflect each of your payment methods.

reduction.jpg

-----------------------------  WHAT?  ----------------------------------------------------------------

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Create a bank reconciliation account and the required number of clearing accounts for your payment methods. With this approach, you can reuse this set of accounts as many times as necessary for a new house bank connection (provided that the set of accounts with its settings matches the requirements of the connected house bank).

Example: 

Now let's do a very simple counting game to make it more real to you. 

You have 3 bank accounts (M=3), each with 4 different payment methods (N=4). Your chart of accounts looks like this. 

Until CE2005 - an operational chart of Accounts looks like this.... 

How many accounts must you create while using balance sheet account for bank account?   

M *(N+1) = 3 * (1 +4 ) = 15 G/L accounts 

the more house bank accounts we have, (N+1) times the more G/L Accounts we need to created. 

Up to now, each time you created a new house bank account, you also had to create a new G/L account to enable payment processes for the new house bank account. Depending on the number of house bank accounts that you needed to create. Over time this could lead to a high number of G/L accounts.

Chart of Accounts G/L Acct External ID Short Text G/L Account Type
YCOA 11001000 Bank1 Main Account Balance Sheet Account
YCOA 11001010 Bank1 Cash Payment Balance Sheet Account
YCOA 11001020 Bank1 Bank Transfer Balance Sheet Account
YCOA 11001050 Bank1 Check Out Balance Sheet Account
YCOA 11001060 Bank1 Check In Balance Sheet Account
YCOA 11002000 Bank2 Main Account Balance Sheet Account
YCOA 11002010 Bank2 Cash Payment Balance Sheet Account
YCOA 11002020 Bank2 Bank Transfer Balance Sheet Account
YCOA 11002050 Bank2 Check Out Balance Sheet Account
YCOA 11002060 Bank2 Check In Balance Sheet Account
YCOA 11003000 Bank3 Main Account Balance Sheet Account
YCOA 11003010 Bank3 Cash Payment Balance Sheet Account
YCOA 11003020 Bank3 Bank Transfer Balance Sheet Account
YCOA 11003050 Bank3 Check Out Balance Sheet Account
YCOA 11003060 Bank3 Check In Balance Sheet Account

Starting from CE2008, How many accounts must you create while using bank reconciliation account  for bank account?   

a Simplified Chart of Accounts with only (1+M) G/L Accounts 
1 + M Payment methods = 1 + 5 = 6 G/L Accounts.  (instead of 15!!)

With the new procedure, you can create bank reconciliation accounts that can be assigned to multiple house bank accounts. For this bank reconciliation account, you can create and assign bank clearing accounts for each of your payment methods. When this set of G/L accounts is set up according to your requirements, you can assign this to all relevant new house bank accounts that you create.With this approach, you can reuse this set of accounts as many times as necessary for a new house bank connection (provided that the set of accounts with its settings matches the requirements of the connected house bank).

Chart of Accounts G/L Acct External ID Short Text G/L Account Type G/L Sub Account Type
YCOA 11501000 Bank Main Account Cash Account Bank Reconciliation Account
YCOA 11501010 Bank Cash Payment Cash Account Bank Sub Account
YCOA 11501020 Bank Bank Transfer Cash Account Bank Sub Account
YCOA 11501050 Bank Check Out Cash Account Bank Sub Account
YCOA 11501060 Bank Check In Cash Account Bank Sub Account

---------------------------HOW  ----------------------------------------------------------------------------------------------

You can reuse a bank reconciliation account and assign it to multiple house bank accounts. This helps you reduce the number of G/L accounts significantly and reduce the effort required to update your chart of accounts. To this bank reconciliation account, you can assign a bank sub account, also known as a bank clearing account, to each of your payment methods.

one time Configuration: Set up a set of G/L accounts

1. Create a bank reconciliation account

Fiori app: Manage G/L Account Master data (either SSCUI 150001)

Task: created the G/L account with the type Cash Account and subtype Bank Reconciliation Account, i.e. YCOA/11501000

2. Create a(N) bank sub account(s) for above bank reconciliation account, each as clearing accounts for your payment methods

in this case, you could create 11501010 for cash payment. , then 11501020 for Bank Transfer, 11501050 for Check Out, and 11501060 for Bank Check In. 

 

3. Enable payment method for automatic payment processing using the bank reconciliation account

3.1 Assign a bank sub account to an account symbol
SSCUI 101024: Make Global Settings for Electronic Bank Statement

  1. Create an account symbol. Select the SIP Relev. (Self-Initiated Payment) checkbox for the account symbol to enable it for use in automatic payment programs.

  2. Assign a G/L account to the account symbol. 

 3.2 Assign the account symbol to the payment method.

Multi-times usage for a new house bank connection
When using Bank Main Recon Account for multiple Bank Accounts, can they still see the Bank Balance per Bank Accounting S/4HANA Cloud?
 cash management reports can show the balances and flows per different bank account, even if they are booked into the same G/L set. Accounting reports are not changed, still as before.
Zero additional configuration for relevant transaction - payment works out of the box
Q-From CE2008, we allows different bank accounts to use the same G/L account. Will this impacts the usage of MBC?
I do not see a problem for the MBC integration based on this change. Of course the prerequisite is that the lockbox import itself works after with this change. MBC just calls the import, so only triggers the process.
--------------------------- Reminder  ----------------------------------------------------------------------------------------------
As you know this is a brand new solution (in CE2008 - just version one), I have to be honest with you for scope bundles. 
  1.  Do you have any local/global financial accounting principles to show the bank balance under different items?
    • If so,  you would need to create separate bank reconciliation account(s) as for now. 

    2.       Is the company with Japan version?

    if so, currently this is not supported. 

    3.       Do you have any requirement for FI-CA Payment? Bill of Exchange? Interest Calculation? 

    In CE2008 it is not supported. But we would like to use this chance to collect the requirement. Kindly contact Cao, William <william.cao@sap.com>