autocash lockbox processing.docx

7/29/2019 Autocash Lockbox Processing.docx

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SAP IDoc Document Types

SAP IDoc stands for intermediate document and is a standard data structure for electronic

data interchange between application programs written for the popular SAP business system

or between an SAP application and an external program.

Document Type ANSI EDI Document Number SAP IDoc

Invoice or Billing Document 810 INVOIC01

Credit Advice 812 PEXR2001

Debit Advice 812 PEXR2002

Remittance Advice 820 PEXR2001

Evaluated Receipts Settlement

Credit Advice

861 GSVERF01

Lockbox 823 FINSTA01

Benefit Enrollment and Maintenance 834 BENEFIT1

Purchase Order 850 ORDERS01ORDERS02

ORDERS03

ORDERS04

Advanced Shipment Notice 856 SHPMNT01SHPMNT03

ANSI X12 EDI Financial Document TypesThe use of EDI in the financial services industry is sometimes called Financial EDI (FEDI).

FEDI is the electronic transfer of payments, payment-related information or other financial

documents in a standardized, machine-readable format.

Finance


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135 Student Loan Application

139 Student Loan Guarantee Result

144 Student Loan Transfer and Status Verification

155 d Credit Report

156 d Entitlement Payment Recipient Account Inquiry/Response

190 Student Enrollment Verification

191 Student Loan Pre-Claims and Claims

197 d Real Estate Title Evidence

198 d Loan Verification Information

199 d Mortgage Settlement Information

200 Mortgage Credit Report

201 Residential Loan Application

203 Secondary Mortgage Market Investor Report

205 d Mortgage Note

206 d Real Estate Mortgage Inspection Request

207 d Real Estate Mortgage Inspection Result

208 d Income Property Appraisal Report

209 d Condominium Appraisal Report

260 Application for Mortgage Insurance Benefits

261 b Residential Appraisal Request

262 Residential Appraisal Report


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263 Residential Mortgage Insurance Application Response

264 Mortgage Loan Default Status

265 Real Estate Title Insurance Services Order

266 Mortgage Record Change

810 e,* Invoice

811 * Consolidated Service Invoice/Statement

812 * Credit/Debit Adjustment

819 Operating Expense Statement

820 * Payment Order/Remittance Advice

821 Financial Information Reporting

822 Customer Account Analysis

823 Lockbox

824 e,* Application Advice

827 Financial Payment Return Order/Return Notice

828 Debit Authorization

829 Payment Cancellation Request

831 Application Control Totals

833 Mortgage Credit Report Order

844 Product Transfer Account Adjustment

849 Response to Product Transfer Account Adjustment

872 Residential Mortgage Insurance Application


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880 Grocery Products Invoice

Insurance

124 Vehicle Damage

148 Report of Injury, Illness or Incident

186 Laboratory Reporting

253d Data Reporting Requirements

255b Insurance Underwriting Information Services

256d Periodic Annuity Compensation

268d Annuity Account Activity

270 Health Care Eligibility/Benefit Inquiry

271 Health Care Eligibility/Benefit Information

272 Property and Casualty Loss Notification

273b Insurance/Annuity Application Status

275b Patient Information

276 Health Care Claim Status Request

277 Health Care Claim Status Notification

278 Health Care Service Review Information

362 Cargo Insurance Advice of Shipment

834 Benefit Enrollment and Maintenance

835 Health Care Claim Payment/Advice

837 Health Care Claim


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Autocash Lockbox Processing

byjsorseninUncategorized

0

What is a lockbox?

A service offered by banks to companies in which the company receives payments by mail to apost office box and the bank picks up the payments several times a day, deposits them into the

companys account, and notifies the company of the deposit. Data entry clerks at the bank

manually enter the information into an electronic file for transmission to the company to whichthe lockbox account belongs. These files are typically transferred nightly to the various lockbox

owners (companies). The files adhere to one of two standard banking industry transmission

formats: BAI, BAI2, EDI820 and EDI 823.This enables the company to put the money to workas soon as its received.

Why use Lockboxes ?

Lockbox process has several advantages:

Payment information can now be processed automatically manual intervention is not needed

Import Processing can therefore also be handled automatically on a scheduled basis. Payment Reconciliation can be auto scheduled as well via the Greenbill Autocash correction

process.

Reduction of manpower needs based on less hours spent on manually manipulating the data.

The predictability and reliability of the processes outlined above cause an overall reduction of

errors throughout. This means the Cash Application process as a whole can be performed in a

more timely fashion promoting better cash flow to the enterprise. This helps put the AUTO in

Autocash.

BAI Defined:

BAI (or the BAI file format) is a file format for used to facilitate cash management balancereporting. The BAI format was developed and is maintained by the Banking Administration

Institute (BAI). One common application of the BAI format is for use by banks to transmit

lockbox payment data to customers. The current release is Cash Management Balance ReportingSpecifications Version 2, typically referred to asBAI2. A BAI2 file contains both remittance

payment and item detail. It is processed in Greenbill in a similar manner as the merged 823 cash

receipt described below.
http://www.9ci.com/2009/02/autocash-lockbox-processing/http://www.9ci.com/2009/02/autocash-lockbox-processing/http://www.9ci.com/author/jsorsen/http://www.9ci.com/author/jsorsen/http://www.9ci.com/author/jsorsen/http://www.9ci.com/category/uncategorized/http://www.9ci.com/category/uncategorized/http://www.9ci.com/category/uncategorized/http://www.9ci.com/2009/02/autocash-lockbox-processing/#commentshttp://www.9ci.com/2009/02/autocash-lockbox-processing/#commentshttp://www.9ci.com/2009/02/autocash-lockbox-processing/#commentshttp://www.9ci.com/category/uncategorized/http://www.9ci.com/author/jsorsen/http://www.9ci.com/2009/02/autocash-lockbox-processing/


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BAI VS. BAI2:

The Bai2 format lists each invoice and the specific payment amount for that invoice. The BAIformat only list the invoices that are being payed as a whole. With BAI2 the difference of the

total check amount and the subtotal of amounts based on each invoice can be calculated, thus

allowing the cash to be applied On Account. This facilitates a more accurate cash postingprocess. The BAI format has been rendered obsolete and has been superseded by BAI2.

What is EDI (Electronic Data Interchange?)

The computer-to-computer interchange of strictly formatted messages that represent documents .

EDI implies a sequence of messages between two parties, either of whom may serve asoriginator or recipient. The formatted data representing the documents may be transmitted from

originator to recipient via telecommunications or physically transported on electronic storage

media. In EDI, the usual processing of received messages is by computer only. Human

intervention in the processing of a received message is typically intended only for error

conditions, for quality review, and for special situations. For example, the transmission of binaryor textual data is not EDI as defined here unless the data are treated as one or more data elements

of an EDI message and are not normally intended for human interpretation as part of online dataprocessing.

820

Payment Order/Remittance Advice

To provide information to a seller about the application of a specific payment by a buyer,

including (1) to order a financial institution to make payment to payee (s) on behalf of sending

party, (2) to report the completion of a payment to payee (s) by financial institution, and (3) togive advice to the payee by the payer on the application of a payment, i.e. invoice, check

number, etc. Lockbox

823

Data contents of the Lockbox Transaction Set (823) for use within the context of an ElectronicData Interchange (EDI) environment. The transaction set can be used to transmit lockbox

(incoming payments) information and totals from a bank or any other lockbox service provider toa company.

Contrasts between EDI 820 and ED823:

EDI 820 information comes from customer not the bank. EDI 820 is not really a lockbox formatbut can be used like a lockbox for customer open item processing. This data is only a remittanceadvice not a real legal payment.


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Lockbox format 823 comes from bank confirming real legal payment transactions received from

customer. This is real payment information which got credited in business account at Lockbox

/Bank. Other differences are:

1. EDI 823 since its coming from a bank will have payments for all bank customers that have your

company as a vendor. Since EDI 820 comes from the customer directly only his transactions arecontained

2. EDI 823 doesnt contain the remittance advice line item data. The 823 data is Payment(Check)

data only.

3. Note that the 823 specifies the actual payment whereas the 820 is the advice of the payment. In

Greenbill the invoice detail from the 820 is merged to the 823 and supplies the complete

remittance detail. The merged cash receipt is then available for import into Greenbill for cash

application against the Accounts Receivable.

BAI vs. EDI in Lockbox:

Both the formats are acceptable and can be used in Greenbill for processing auto import.

EDI(820,823) technology requires the use of an EDI translator program. It creates intermediate

document holding the information for further process. On the other side BAI format doesntrequire this.

Some additional advantages of EDI are:

Data is more accurate from an A/R open item perspective since the 820 comes directly from the

customer.

820 Remittance detail data is cleaner than BAI. The remittance detail is piped directly from the

A/R system of the customer and keying mistakes made at the bank with BAI are therefore

avoided.

Understanding Lockbox

Submitted by Chandra Wipro

Objective of this document is to explain the meaning, purpose, advantages and disadvantages of the lockbox.This document also explains various types of formats that can be used to process the lockbox data.

What is a lockbox?

A company can create accounts called lockbox accounts at its bank (or banks) that act as payment collectionaccounts for customer payments. The company then informs their customers that all open item payments fortheir accounts must be submitted to one of the established bank lockbox accounts. The bank collects thesepayments along with the customers remittance information that indicates what open items the customerpayments intend to clear. Data entry clerks at the bank manually enter the information into an electronic file for


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transmission to the company to which the lockbox account belongs. These files are typically transferred nightlyto the various lockbox owners (companies). The files adhere to one of two standard banking industrytransmission formats: BAI, BAI2, EDI820 and EDI 823.

Advantages of Lockbox:

Lockbox process has several advantages. Some of them can be illustrated as under.

Avoid Manual handling of checks

Timely processing of Checks

Easy reconciliation

Reduction of manpower cost

Avoid clearing Errors

What is BAI?

The standards for lockbox transmission files are defined by the Bank Administration Institute (BAI). Founded in1924, the BAI organization is a partnership composed of its own BAI membership, a Board of Directors, variousbanking industry advisory groups and a professional staff. The organizational mission is to help bankadministrators achieve high levels of professional effectiveness and to help solve significant bankingproblems. Activities include the definition of industry file formats, such as lockbox transmissions. BAI andBAI2 are the two defined lockbox transmission formats, however, BAI is considered outdated by the BAIorganization and is no longer supported (ie. standards are no longer updated or improved). Nonetheless, manybanks still offer transmissions in the old BAI format.

BAI vs. BAI2?

BAI and BAI2 formats differ in their level of information detail. BAI does not separate out the incoming checkline items by invoice subtotal reference. Instead, one check total amount simply has all invoices listedunderneath it. Thus, in BAI format files, the entire check amount must match perfectly (or within configured

payment difference tolerances) the total amount for all invoices listed. Otherwise, the entire check will enterinto SAP as:

an On account posting (if the payment and invoice totals dont match), or

An Unprocessed posting (if no customer account and documents could be identified from thetransmission).

In these scenarios, your Accounts Receivable cash application clerks will have to perform manual application toclear payments against open items on the proper accounts.


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Conversely, BAI2 splits the check total into separate invoice references and associated payment amounts.Thus, within a large batch, BAI2 format files will allow a Partially applied status in which some identifiablepayments within the check total will be matched and cleared, others will land on account. As a result, your hitrate percentage of payment-invoice matching from each transmission is likely to be higher when using BAI2rather than BAI formats.

Electronic Data Interchange:

Network transfer of structured electronic data from one computer application to another using standardmessage formats. EDI is described as the interchange of structured data according to agreed messagestandards between computer systems by electronic means. This standard format is nothing but a Set of rules,agreed upon, accepted, and voluntarily adhered to, by which data is structured into message formats for

exchange of business and operational information. Lockbox related formats are Edi 820 and 823.

EDI 820:

The 820 Payment Order/Remittance Advice transactions can be used to make a payment, send a remittanceadvice, or make a payment and send a remittance advice. The 820 transaction can be an order to a financialinstitution to make a payment to a payee. It can also be a remittance advice identifying the detail needed to

perform cash application to the payees accounts receivable system. T he remittance advice can go directlyfrom payer to payee, through a financial institution, or through a third party agent.

EDI 823

The 823 Lockbox formats are sent by bank as confirmation of payments received from customers of lockboxowner. EDI 823 format contains information like Bank details of lockbox service provider, total quantity ofchecks in each format transmission, total amount involved in total checks, number of batch involved ( batchrepresents maximum quantity of checks in each lot). Further break up like, customer name, customer bankrouting number, customer bank account number, check number and amount, number of invoices paid, amount

per invoice, discounts for each invoice, deductions if any involved and credit memos etc.

Information available in these formats are generally used for clearing customer open items in SAP depends

upon the business requirement. Following EDI configuration is required to read the data from correspondingformat and process customer open items.

Format Idoc type Message type Process code

EDI 820 Pexer2002 REMADV REMA

EDI 823 FINSTA01 LOCKBOX LBX

Continued..

Understanding Lockbox

..Previous
http://www.sapfunctional.com/FI/LockBox/Page2.htmhttp://www.sapfunctional.com/FI/LockBox/Page2.htmhttp://www.sapfunctional.com/FI/LockBox/Page1.htmhttp://www.sapfunctional.com/FI/LockBox/Page1.htmhttp://www.sapfunctional.com/FI/LockBox/Page1.htmhttp://www.sapfunctional.com/FI/LockBox/Page2.htm


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Difference between EDI 820 and 823:

In general EDI 820 formats will be used to send information to Vendor furnishing details of payment for hissupplies. From business standpoint, EDI 820 information comes from customer as the business is vendor to itscustomer. In fact EDI 820 is not a lockbox format but can be used in place of lockbox for customer open itemprocessing. This information however is not a real payment but only a remittance advice.

Where as lockbox format is an exclusive format that comes from bank confirming the payments received fromcustomer. This is real payment information which got credited in business account at Lockbox /Bank. Besidesthis basic difference between these two formats some other differences can be summarized as under.

1. EDI 820 will have one to one information. Each customer will send remittance information to thebusiness. EDI 823 format will have several customer information in one format.

2. Customer can not use EDI 823 format where as Bank can use EDI 820 format.3. EDI 820 is only an advice but 823 is a payment.

4. Technical settings viz., Partner profiles, Basic type, Message type, function modules used in SAP aredifferent between these two.5. Level of information will be different. EDI 823 will have Total number of checks involved, total payment

amount involved, break up of checks and amount per batch, per customer etc will not be available incase of EDI 820.


Both the formats are acceptable and can be used in SAP for processing customer open items. However theearlier one is (BAI) is file based and the later format is (EDI) is idoc based. File based is batch mode and EDI isreal time information. BAI can not be made as real time process but EDI can be made as batch process.

EDI technology requires mapping tool. It creates intermediate document holding the information for further

process. On the other side BAI format doesnt require this.

As far as processing and of clearing customer open items in SAP is concerned, whether the format is BAI orEDI system will follow same transactions. FB01 > FBE1 > FB05. In either of the case if information is notsufficient to clear open items, it is available for manual process.


Data Accuracy

Reduce Technical Complexity.

Lowe Personnel needs.

Accelerates information exchange.

Avoid Data Entry Errors.

Lockbox Process - Data file to SAP open item clearing


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What Bank will do?

Bank Receives the payments, create a data file of the customerremittance information and payment amounts, and deposit the

checks into client bank account. On regular basis, Client companyreceives this data file for processing to update in their accounts.

What lockbox data filecontain?

Depending upon the choice of services with the Bank, the lock boxfile will contain information viz., Customer name, Customer

Number, Customer MICR number ( Bank routing and AccountNumber), Check amount, Invoice number, Payment date, Payment

amounts and other information.

Lockbox Data Flow

As shown in the following picture, customers send their paymentsto a lockbox. Then bank collects the data and sends (either through

EDI 820 and 823 formats) to R/3 users EDI server (standard

Process). The server translates the message using as standardEDI interface into an IDOC (Intermediary documents) and sends itto the SAP Server.

What happens in SAP server

Once the message is received and stored in SAP table, a programis clicked (RFEBLB30 or FLBP transaction) to check the

information stored in bank statement tables and create paymentadvices with Payment amount, invoice numbers and customer

number.


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Matching of customeropen items

The lockbox program uses detailed information from the payment advice toautomatically search and match customer open items. The document

number on the payment advice is matched against the document number inthe customer open item file. Therefore, accurate payment data is necessary

for automatic clearing to take place.

Payment Advice

Status

If the checks were applied or partially applied, the advice is deleted from

the system after processing. If the check was unprocessed or placed onaccount of customer, the advice is kept on file for further processing.

Post Processing

The post process function entails reviewing the status of the checks appliedthrough the lock box function. User must manually clear any checks that

were on-account of customer or not applied to customer account.

The Lockbox overview screen details the number of checks in eachcategory. Depending on the status of the check, the user determines what

needs to occur to apply checks.

On account: If the bank keyed in the correct invoice number, the LockboxImport Program posts the payment on account. In the post processingstep, you access the payment advice and correct the document number

and upon saving the changes, the post process function clears the openitem, deletes the payment advice and sets the check status to applied.

Partially Applied: Checks that are partially applied may require furtherprocessing. Ex: Check may have paid 5 invoices, but one was in correctlykeyed. The first 4 invoices would clear. The payment amount for the 5th

invoice would be put on-account and would have to be post processed toclear.

Unprocessed: Any payment that could not be identified either by customerMICR number (check) or the document number would remain

Unprocessed. Once the payment is researched and the customer andinvoice is identified, it would be applied during post processing.

What configurationneeds to be done?

Control Parameters: It determines the import format BAI, BAI2 & ANSI andthe types of postings generated by the lockbox program. These control

parameters are needed for importing lockbox file sent by bank.

Posting Data: Company code, Bank Information, G/L accounts for postingand clearing, document types and Posting keys.

RFEBLB30 or FLBPtransaction

Lock Box data, Processing parameters (Procedure & Algorithm) Accountassignment (Profit center), output control and Mode of call transaction.


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70 people here. 17 are sap. Rest are business and senior management. They have contracts

management team (Implemented Revitas).

They have SD, MM FI (No Costing as yet)

ECC 6.0 EHP 7.

1st

April = Deeksha project goes live.

Devised a report based on VA05. Whereas they input a column in the open orders report where they

show the actual available stock.

In general EDI 820 formats will be used to send information to Vendorfurnishing details of payment for his supplies. From business standpoint, EDI

820 information comes from customer as the business is vendor to its


15/23

customer. In fact EDI 820 is not a lockbox format but can be used in place of

lockbox for customer open item processing. This information however is nota real payment but only a remittance advice.

Where as lockbox format is an exclusive format that comes from bank

confirming the payments received from customer. This is real paymentinformation which got credited in business account at Lockbox /Bank.

Besides this basic difference between these two formats some otherdifferences can be summarized as under.

1. EDI 820 will have one to one information. Each customer will sendremittance information to the business. EDI 823 format will have

several customer information in one format.2. Customer can not use EDI 823 format where as Bank can use EDI 820

format.3. EDI 820 is only an advice but 823 is a payment.4. Technical settings viz., Partner profiles, Basic type, Message type,

function modules used in SAP are different between these two.

5. Level of information will be different. EDI 823 will have Total numberof checks involved, total payment amount involved, break up of checks

and amount per batch, per customer etc will not be available in case ofEDI 820.


Both the formats are acceptable and can be used in SAP for processing

customer open items. However the earlier one is (BAI) is file based and thelater format is (EDI) is idoc based. File based is batch mode and EDI is realtime information. BAI can not be made as real time process but EDI can be

made as batch process.

EDI technology requires mapping tool. It creates intermediate document

holding the information for further process. On the other side BAI formatdoesnt require this.

As far as processing and of clearing customer open items in SAP is

concerned, whether the format is BAI or EDI system will follow same

transactions. FB01 > FBE1 > FB05. In either of the case if information is notsufficient to clear open items, it is available for manual process.


Data Accuracy



16/23

Lowe Personnel needs.

Accelerates information exchange.

Avoid Data Entry Errors.

Lockbox Process - Data file to SAP open item clearing

What Bank will do?

Bank Receives the payments, create a datafile of the customer remittance information

and payment amounts, and deposit the checksinto client bank account. On regular basis,

Client company receives this data file forprocessing to update in their accounts.

What lockbox datafile contain?

Depending upon the choice of services with

the Bank, the lock box file will containinformation viz., Customer name, Customer

Number, Customer MICR number ( Bankrouting and Account Number), Check amount,

Invoice number, Payment date, Paymentamounts and other information.


17/23

Lockbox Data Flow

As shown in the following picture, customers

send their payments to a lockbox. Then bankcollects the data and sends (either through

EDI 820 and 823 formats) to R/3 users EDIserver (standard Process). The server

translates the message using as standard EDIinterface into an IDOC (Intermediary

documents) and sends it to the SAP Server.

What happens in

SAP server

Once the message is received and stored in

SAP table, a program is clicked (RFEBLB30 orFLBP transaction) to check the information

stored in bank statement tables and create

payment advices with Payment amount,invoice numbers and customer number.

300 charge back documents.

McKesson is the largest transporter of 824.

No credit card


18/23


19/23

A company can create accounts called lockbox accounts at its bank (or banks) that act

as payment collection accounts for customer payments. The company then informs

their customers that all open item payments for their accounts must be submitted to

one of the established bank lockbox accounts. The bank collects these payments along

with the customers remittance information that indicates what open items the customer

payments intend to clear. Data entry clerks at the bank manually enter the information

into an electronic file for transmission to the company to which the lockbox account

belongs. These files are typically transferred nightly to the various lockbox owners

(companies). The files adhere to one of two standard banking industry transmission

formats: BAI, BAI2, EDI820 and EDI 823.

Advantages of Lockbox: Lockbox process has several advantages. Some of them can be

illustrated as under.

Avoid Manual handling of checks

Timely processing of Checks

Easy reconciliation

Reduction of manpower cost

Avoid clearing Errors

What is BAI?

The standards for lockbox transmission files are defined by the Bank Administration

Institute (BAI). Founded in 1924, the BAI organization is a partnership composed of its

own BAI membership, a Board of Directors, various banking industry advisory groups

and a professional staff. The organizational mission is to help bank administrators

achieve high levels of professional effectiveness and to help solve significant bankingproblems. Activities include the definition of industry file formats, such as lockbox

transmissions. BAI and BAI2 are the two defined lockbox transmission formats,

however, BAI is considered outdated by the BAI organization and is no longer

supported (ie. standards are no longer updated or improved). Nonetheless, many banks

still offer transmissions in the old BAI format.


20/23

BAI vs. BAI2?

BAI and BAI2 formats differ in their level of information detail. BAI does not separate

out the incoming check line items by invoice subtotal reference. Instead, one check

total amount simply has all invoices listed underneath it. Thus, in BAI format files, the

entire check amount must match perfectly (or within configured payment difference

tolerances) the total amount for all invoices listed. Otherwise, the entire check will enter

into SAP as:

an On account posting (if the payment and invoice totals dont match), or AnUnprocessed posting (if no customer account and documents could be identified from

the transmission). In these scenarios, your Accounts Receivable cash application clerks

will have to perform manual application to clear payments against open items on the

proper accounts.

Conversely, BAI2 splits the check total into separate invoice references and associated

payment amounts. Thus, within a large batch, BAI2 format files will allow a Partially

applied status in which some identifiable payments within the check total will be

matched and cleared, others will land on account. As a result, your hit rate percentage

of payment-invoice matching from each transmission is likely to be higher when using

BAI2 rather than BAI formats.

Electronic Data Interchange:

Network transfer of structured electronic data from one computer application to another

using standard message formats. EDI is described as the interchange of structured data

according to agreed message standards between computer systems by electronic

means. This standard format is nothing but a Set of rules, agreed upon, accepted, and


21/23

voluntarily adhered to, by which data is structured into message formats for exchange

of business and operational information. Lockbox related formats are Edi 820 and 823.

EDI 820:

The 820 Payment Order/Remittance Advice transactions can be used to make a

payment, send a remittance advice, or make a payment and send a remittance advice.

The 820 transaction can be an order to a financial institution to make a payment to a

payee. It can also be a remittance advice identifying the detail needed to perform cash

application to the payees accounts receivable system. The remittance advice can go

directly from payer to payee, through a financial institution, or through a third partyagent.

EDI 823:

The 823 Lockbox formats are sent by bank as confirmation of payments received from

customers of lockbox owner. EDI 823 format contains information like Bank details of

lockbox service provider, total quantity of checks in each format transmission, total

amount involved in total checks, number of batch involved ( batch represents maximum

quantity of checks in each lot). Further break up like, customer name, customer bank

routing number, customer bank account number, check number and amount, number

of invoices paid, amount per invoice, discounts for each invoice, deductions if any

involved and credit memos etc.

Difference between EDI 820 and 823:

In general EDI 820 formats will be used to send information to Vendor furnishing

details of payment for his supplies. From business standpoint, EDI 820 information

comes from customer as the business is vendor to its customer. In fact EDI 820 is not a


22/23

lockbox format but can be used in place of lockbox for customer open item processing.

This information however is not a real payment but only a remittance advice.

Where as lockbox format is an exclusive format that comes from bank confirming the

payments received from customer. This is real payment information which got credited

in business account at Lockbox /Bank. Besides this basic difference between these two

formats some other differences can be summarized as under.

EDI 820 will have one to one information. Each customer will send remittance

information to the business. EDI 823 format will have several customer information in

one format. Customer can not use EDI 823 format where as Bank can use EDI 820

format. EDI 820 is only an advice but 823 is a payment. Technical settings viz., Partnerprofiles, Basic type, Message type, function modules used in SAP are different between

these two. Level of information will be different. EDI 823 will have Total number of

checks involved, total payment amount involved, break up of checks and amount per

batch, per customer etc will not be available in case of EDI 820.


Both the formats are acceptable and can be used in SAP for processing customer open

items. However the earlier one is (BAI) is file based and the later format is (EDI) is idoc

based. File based is batch mode and EDI is real time information. BAI can not be made

as real time process but EDI can be made as batch process.

EDI technology requires mapping tool. It creates intermediate document holding the

information for further process. On the other side BAI format doesnt require this.

As far as processing and of clearing customer open items in SAP is concerned, whether

the format is BAI or EDI system will follow same transactions. FB01 > FBE1 > FB05. In

either of the case if information is not sufficient to clear open items, it is available for

manual process. Some additional advantages of EDI are:


23/23

Data Accuracy


Lower Personnel needs.

Accelerates information exchange. Avoid Data Entry Errors.

autocash lockbox processing.docx

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