SAP Implementation Project

Process Definition Document

Nile Air
SAP Implementation Project
Process Definition Document (PDD)

Submission Date-03.07.2016

Process Definition Document

Process Definition Document

DOCUMENT CONTROL
Process ID

FI0104

Business Area

FI

Scenario

Bank

Process Name

Version

Revision Date

V0101

(MM/DD/YYYY)
03.07.2016

Revision Description

Author

Ahmed Hamouda

V0102

Name

Business Area

Document

Date

Version No.

(MM/DD/YYYY)

SAP Process Team

SAP Project Management

Business Process Owners

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TERMINOLOGY
Term

/ Description

Abbr.
Company
Code

(CoCd)
Chart of
Accounts

(COA)

The smallest organizational unit of Financial Accounting for which a

complete self-contained set of accounts can be drawn up for purposes of
external reporting. This includes recording of all relevant transactions and
generating all supporting documents required for financial statements.

Chart of accounts is a classification scheme consisting of a group of (G/L)

accounts. For each G/L account, the chart of accounts contains the account
number, the account name, and technical information.

Controlling
Area

The controlling area is an organizational unit in Accounting used to

subdivide the business organization from a cost accounting standpoint

Parking
document

You can use document parking to enter and store (park) incomplete
documents in the SAP System without carrying out extensive entry checks.
Parked documents can be completed, checked, and then posted at a later
date - if necessary by a different accounting clerk.

Profit Center

A profit center is an organizational unit in accounting that reflects a

management-oriented structure of the organization for the purpose of
internal control.

AP

Accounts Payables

AR

Accounts Receivables

AA

Asset Accounting

GL

General Ledger

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Table of Contents

Contents
1

INTRODUCTION..................................................................................................................................... 5
1.1

Executive Summary......................................................................................................................... 6

1.2

Solution Overview............................................................................................................................ 6

SAP ORGANIZATIONAL STRUCTURE................................................................................................. 6

SAP MASTER DATA.............................................................................................................................. 8

4.2

Business Process Diagrams............................................................................................................ 9

BUSINESS PROCESS AND SOLUTION DESIGN...............................................................................11

4.1

Bank Accounting (FI1).................................................................................................................... 11

4.2

Checks Processes......................................................................................................................... 14

4.2.1.

Create Checks Lot...................................................................................................................................14

4.2.2.1

Process flow description:........................................................................................................................15

4.2.3.1

Process flow description:........................................................................................................................15

4.2.7

Incoming Check (bill of exchange)..........................................................................................................19

SAP REPORTS.................................................................................................................................... 25

CLOSING ACTIVITIES......................................................................................................................... 25

INTEGRATION POINTS....................................................................................................................... 25

FUNCTIONAL SOLUTIONS FOR PROCESS "CASH AND BANK ACCOUNTING"..........................26

FUNCTIONALITY GAPS...................................................................................................................... 26

10

ROLES.............................................................................................................................................. 26

11

TECHNICAL/DEVELOPMENT RELATED ITEMS (WRICEF) FOR PROCESS CASH AND BANK

ACCOUNTING........................................................................................................................................... 27

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1 Introduction
This document states all of the conceptual results of the project Nile Air.
These project results were devised and decided on by the project team and
the department experts from customer Nile Air during the Business Blueprint
project phase.
This is the main concept document of the project. It is supplemented by
separate specifications for custom developments.
The content of this document forms the basis and the guidelines for the
subsequent Realization phase.
This document aims to describe the future business solution based on SAP
software.
Both, IT subjects and organizational issues that are required to understand
the situation, are described in it.
Any additional explanations that are only relevant when the project is in
progress are given in the various project management plan documents, which
the project management team will provide on request.

1.1 Executive Summary

Bank Directories
The bank directory contains the bank master data. This includes the bank
address data and
Control data, such as the SWIFT Code [Ext.] and Bank Groups [Ext.]. Details
for post office banks should be identified specially.
The bank directory must contain the master data for all the banks that you
require for payment Transactions with your business partners. This includes
your banks and the banks of your business partners.

1.2 Solution Overview

Bank data that will be used in Nile Air in processing outgoing and incoming

payments, Treasury department will maintain bank accounts master on

request from various Company codes.
Outgoing Check clearing account will be used to record Vendor payment
(e.g. Vendor Dr and Outgoing payment Clearing Account Cr.) Once the check
is presented in the Bank it will be entered in the Online Cash Check
Transaction. System will post the following entry (Outgoing Clearing Dr and
Main Bank Account Cr) .

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2 SAP Organizational Structure

Chart
Chart of
of

CLEINT

Accounts
Accounts

Chart
Chart of
of
Depreciation
Depreciation

Company
NileAir
NileAir

Company Code
1000
1000

This section will introduce the Organizational Structure Unit, its purpose and
major characteristics for the business.
Company is an organizational unit in Accounting which represents a
business organization according to the requirements of commercial law
in a particular country.
A company can consist of more than company code, all the company
codes within the company use the same chart of accounts.

Company Code: (for external purposes) A company code represents

an independent balancing/legal accounting entity. An example would be
a company with independent accounts within a corporate group.

Financial statements required by law can be created at company code level.

The definition of the company code provides framework of an organization
including:
Chart of accounts
Structure of fiscal year
Currency definition
Language definition.
Nile Air Company will be a company code which have Financial Statements.
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Naming Convention
Company Code is Four Alpha Numeric Characters.

Chart Of Accounts
It is a classification scheme consisting of a group of (G/L) accounts.
The operating chart of accounts is shared by Financial Accounting as well as
Controlling.
The accounts in a chart of accounts can be both expense or revenue accounts
in Financial Accounting and cost or revenue elements in cost/revenue
accounting.
Nile Air Company will use One operating Chart of Accounts.
Naming Convention
Chart of Accounts is up to Four Alpha Numeric Characters, Naming Convention
that will be used is Abbreviation of Nile Air Company.

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3 SAP Master Data

Master data comprises data records that are stored in the database for a long
period of time. These data records are stored centrally, and are used and
processed on a cross-application basis. In this way, the multiple storage
(redundancy) of data is avoided.

Banking Master Record

Bank Master Data will have the following structure:
There are two main factors to be considered while managing bank accounts in
SAP system:
House banks
Bank accounts
Currency

For a company code we need to define its House banks. These are an
equivalent of the real banks that the company operates with.
For every house bank there are defined one (or more) bank accounts - these
are simply our bank accounts per house bank.
The bank account data contains the number of the account at the bank, the
account currency and the G/L account which reflects the postings on your
bank account in the general ledger.
For each bank account, a G/L account must be created. This G/L account is
assigned to the bank account and vice versa. Both accounts have to have the
same account currency.

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4.2 Business Process Diagrams

7.2.1 Create bank master data

7.2.2 Change Bank Master Data

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4 Business Process and Solution Design

4.1 Bank Accounting (FI1)
Business Process Description

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This component is used to handle accounting transactions that you process

with your bank.
It includes the management of bank master data, cash balance management
(check and bill of exchange management), and the creation and processing of
incoming and outgoing payments. It is possible to freely define all countryspecific characteristics, such as the specifications for manual and electronic
payment procedures, payment forms, or data media.
The cash journal is a sub ledger of Bank Accounting. It is used to manage a
company's cash transactions. The system automatically calculates and
displays the opening and closing balances, and the receipts and payments
totals. You can run several cash journals for each company code. You can also
carry out postings to G/L accounts, as well as vendor and customer accounts.

Incoming Checks (Bill Of Exchange)

Bills of exchange and checks are among the most widespread forms of payment. The system
allows you to record, store, and use them according to local legal and business requirements (see
below).
The system handles both bills of exchange and checks using the system's bill of exchange
functions.

Vendor outgoing checks

Outgoing Check clearing account will be used to record Vendor payment

(e.g. Vendor Dr and Outgoing payment Clearing Account Cr.) Once the
check is presented in the Bank it will be entered in the Online Cash Check
Transaction. System will post the following entry (Outgoing Clearing Dr and
Main Bank Account Cr)

Day-to-Day Activities
The system allows you to process bills. For example, it supports the use of portfolios to store bills,
and automatically creates transaction records.
For monitoring purposes, you can use the system to call up a list of your bills of exchange. In
addition, you can also display each bill's history.

Bill of Exchange Portfolio

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Definition
A collection of bills of exchange (or checks)
Use
Typically, each branch office of a business or a bank has its own portfolios, possibly
with separate portfolios for long- and short-term bills respectively. Furthermore, you
must store bounced instruments separately from others.
In the system, you can define any number of portfolios, depending on how you want
to organize your bills.

Day-to-Day Activities:

When you enter or process a bill of exchange in the system, you specify which portfolio the bill is
stored in. The system then assigns it that portfolio and posts the bill to the appropriate G/L
accounts.
A customer sends you a bill of exchange by means of payment. When you enter it in the system,
you specify which portfolio you want to store it in, and the system automatically debits it to the
account that you have specified. Similarly, when you send the bill to the bank for collection, the
system removes it from the account.

4.2 Checks Processes

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4.2.1. Create Checks Lot

4.2.1.1 Process flow description:

Firstly, The Financial Accountant will prepare the Check lot Request then it will be
submitted to FI Administrator

Secondly, The FI Administrator will verify the documents then it will be submitted to the
Senior Accountant

After the Financial Manager enters the Company code segment, House bank and bank
ID, the check lot will be approved.

Lastly The SAP Administrator will create the check lot on the system.

4.2.2 Display Check

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4.2.2.1 Process flow description:

The Financial Accountant has a request to display the check register, He will check if he has the
authority to display the register therefore he will process to access the display check.

The Financial Accountant will log on SAP System and He will enter the company code, house bank
& Account ID.

The Check Register will be displayed.

4.2.3

Voiding Unused Check

4.2.3.1 Process flow description:

The Financial Accountant has a request to void a check, He will check if he has the authority to
void the check therefore he will process to access the voiding check display.

The Financial Accountant will log on SAP System and He will enter the company code, house
bank, Account ID, Reversal Reason and the check number which needs to be voided then execute
the document.

The Check will be voided.

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4.2.4

Voiding Checks

4.2.4.1 Process flow description:

The Financial Accountant has a request to void check with reversal document, he will process o
access the voiding check display by entering the company code, house bank, Account ID, Reversal
Reason, the check number, Reversal Date and the posting date too.

The check payment will be cancelled and voided

4.2.5 Online Cashed Check

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4.2.5.1 Process Flow description

All Check which will be presented in the Bank, need to be updated in the system. Following will be the
process flow Description:

Finance Department will check Checks encashment details online daily.

Update details in the system of presented Check.

All outgoing payments, in which payment media is check, will initially be posted to Outgoing Clearing Check
Account which will be the sub ledger account of Main Bank Account. Once Vendor presented the check in
the Bank, posting from Outgoing Clearing Check Account will be transferred to main Bank Account.
Following entries will be posted at the time of payment and at the time of check encashment:
Payment Entry
Dr

Vendor

Cr

Outgoing Clearing Account

Check Encashment
Dr
Outgoing Clearing Account
Cr

Main Bank Account

Check Encashment entry will be posted in the system automatically once user enters the details in the
system of the check which is encased in the bank. This information user can enter on a daily, weekly or
monthly basis.

4.2.6 Bank Reconciliation

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Incoming bank statements will be entered into the system manually to

perform bank reconciliation and update the bank accounts balances in the
system.

4.2.6.1 Process flow description

The bank reconciliation will be performed manually; Following will be the process flow description:

First the company will receive a bank statement on a monthly basis recording all the transactions that
have been made on the bank account with all the bank expenses as a result from this transaction from the
bank side.

Then the responsible person in FI will print the bank G/L account from SAP system with all the transactions
on this reconciliation period.

Update manually the General Ledger with any Journal entry required from reconciliation through the
manual bank statement in SAP.

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4.2.7 Incoming Check (bill of exchange)

4.2.7.1 Pracess flow Description

Posting a bill of exchange Receivable (F-36)

Use
The procedure for entering a bill of exchange as a customer payment in the system is similar to that in
other countries.
However, you are also required to specify which portfolio you want to post the bill to, the bill's external
number, and the bank account of the original maker of the bill. The system also prints out a record of the
transaction.

Result

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The system:
Creates a document to post the bill of exchange as follows:

This document clears the invoice by crediting accounts receivable, and creates a new open item on
bills of exchange receivable account also SAP allows to post the incoming checks directly on
Customer account without clear or process it against open items.
It also sets the document's baseline date to the bill's due date. If you post more than one bill in a
single document, however, it calculates the baseline date as the average due date of all the bills,
but weighted according to how much each bill is worth. For example, if you enter one bill due 31
July and another 31 August, both worth the same, the system sets the baseline date to 15 August.
The system uses this date when you.

Collection of a Bill of Exchange

Purpose
This process describes how you record the collection of a bill of exchange by a bank.
Prerequisites
You have already entered the bill of exchange receivable, and the system has created
the following document:

Presenting a Bill of Exchange to a Bank

In the system, you specify which bills you want to send to
The system creates an accounting document to record that the bill is now on the interim account and
therefore cannot be used for any other purpose and that you have a contingent liability:

The system also prints out a transaction record, which you file away for future reference, and generates an
electronic file with the details of the bills to be presented to the bank.
You send the bills and the electronic file to the bank.

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Clearing a bill of exchange Presented to a Bank

When the bank receives the bill, it puts it in safekeeping. On the due date, it clears the bill, transfers the
money to your account (less any collection charges), and notifies you accordingly.
When you receive the banks notification, you record the transaction in the system.
The system creates two accounting documents to post the bill:

One document to remove the bill from the interim account and debit it to your bank account, as
follows:

One document to remove the contingent liability from the liability account and the bill from the bills
of exchange receivable account:

When a Bill Bounces at a Bank

Purpose
This process describes how you record what happens when a bill of exchange bounces after you have
presented it to
a bank.

Prerequisites
You have received a bill and presented it to a bank for collection.
The system has created the following accounting documents:

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The bill's due date has now elapsed and the drawee has refused to pay the bill the bill has bounced.
When you receive the banks notification that the bill has bounced, you record the transaction in the
system
The system creates two accounting documents to post the bill:
One document to remove the bill from the bill of exchange liability account and from the bill of
exchange receivable account:

One document to remove the bill from the interim account and add it to an account for bounced
bills:

The system also prints out a transaction record, which you file away for future reference.
2. You contact the customer to find out how it intends to pay. Once you have come to an agreement, you
can clear the bounced bill from the system.
The system creates an accounting document to remove the bounced bill and reopen the invoice:

Again, the system prints out a transaction record.

Result
The only open item that you have is the new invoice in accounts receivable. All other items have been
cleared.

Transfer of a Bill of Exchange Between Portfolios

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Purpose
This process describes how you record the transfer of a bill of exchange from one portfolio to another, a
procedure that typically involves one branch of a company sending a bill to another by mail. A two-step
procedure is needed, which stipulate that portfolios in transit must be accounted for.

Prerequisites
You have already entered the bill of exchange receivable, and the system has created the following
document:

Removing a Bill from a Portfolio

You send the bill to the branch holding the other portfolio and record the transaction in the system
The system creates an accounting document as follows:

The system also prints out a transaction record, which you file away for future reference.

Adding a Bill to a Portfolio

When the branch notifies you that the bill has arrived, you record the transaction in the system.
The system creates two accounting documents. The first reverses the original payment document and also
the contingent liability:

The second creates a new payment document in the special G/L account used for the new portfolio, and
reverses the bills of exchange in transit posting:

4.3 Processes step Detailed

PROCESS STEP DESCRIPTION
ID

Process Step

Ref. to

Measure of

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Process Definition Document

Solution

GAP

Description

001

Requirement
s
as applicable

Enter incoming
Payment (Check)

successful
delivery

Incoming

Process Definition Document

Description

Portfolio

is posted by
check

002

Present Check to
Bank

Portfolio

003

Clear the Check At

Bank

Portfolio

004

Bounce the Check

at
Bank

Portfolio

005

Change/ Display
Document

Value
Date Changed

Change
the Value
Date

SAP Reports

Following standard reports are available in the SAP System:

Bill of exchange history
Outgoing check register

Reporting
Report Title

Transaction code

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Description

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Checks receivable or bill

of
exchange History

FTR02

Display the checks receivable or

bill of
exchange history

Outgoing Check Register

FCHN

Display outgoing checks

Closing Activities

No month and year end closing activities need to be performed for Bank
Accounting and Cash Management.

Integration Points

Cash Management has integration with FI, MM, and SD Module. Most of the
Data of Cash Management comes from other module. For Liquidity Forecasting
Cash Management Group need to be assigned to Business Partner (Vendor,
Customer) master record. So on the basis of Payment terms system determine
the cash inflow and outflow dates.

Functional solutions for process "cash and Bank

Accounting"

1. Organization Structure Considerations

Company Code.

2. Master Data Considerations (including all relevant data relationships)

G/L Account.

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Functionality Gaps

Business
Requirement
Nil

Description

Mitigation/Alternative

Nil

Nil

10 Roles
The addition or changes to Policies and Procedures will impact Roles.
Finance Department in conjunction with ECC consultants will provide to the
team Organization Charts, Job Role/Position Descriptions. The ECC's Basis
team will map Standard SAP Roles.
Role

Description

Responsibilities

Different roles will be created in the system to restrict the users to specific
application area. It will be decided later

11 Technical/Development Related Items (WRICEF) for

Process Cash and Bank Accounting

Interfaces
N/A
Enhancements
N/A
Output (e.g. forms)

Organizational Change Related Items for Process Banking
N/A

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