In the context of the periodic tasks, account balancing is performed at regular intervals for the purpose of account settlement. Account balancing is triggered periodically, in accordance with the entry in the account master. You can set the time periods on the account.

During account balancing, the system performs the following tasks:

• Determination of the balancing balances.
• Calculation of the balancing-dependent interest and charges in accordance with the conditions assigned to the account, and updating on the respective account.
• Increasing the balancing date defined in the account master to the next date.
• Transfer of the interest to the module for the calculation of interest income tax for further processing.
• If necessary, adjustments are made to balancings of earlier periods if there are value dates in the past, or backdated postings to already balanced periods have occurred.

In addition you need to set the required transaction types in the Implementation Guide (IMG) by choosing Account Management ® Assign Posting Categories to Transaction Types.

In the current account system we differentiate between the posting date of payment transactions and the posting date of the balancing. Once the date has been increased and the postings of payment transactions are completed, you can execute a balancing. This means that the posting date of the balancing is before the posting date of payment transactions.

Once the posting date for the balancing is set, the following possibilities result for an account:

• The posting date is within the period to be balanced. This is also possible if the posting date of payment transactions is already in the next period.
• The posting date is in the following period. One disadvantage of this is that adjustments in the balancing of the balanced period (for example, as a result of value dates in the past) are not already included in the next period, but in the next but one period. Adjustments are always made in the period in which the posting date lies.

Accounts are selected for the calculation of interest and charges according to bank area, balancing type, balancing (interest and charges) and balancing date.

The following accounts are selected:

• Due accounts. Due accounts are those with an account balancing date in the master data before or on the selection date for account balancing.
• Accounts to be newly settled, even if they are not yet due. Accounts to be newly settled are, for example, accounts whose conditions for interest income tax have changed. You must explicitly trigger this new calculation. For individual accounts you can have balancings from previous periods recalculated by going to the master data of the account and choosing Environment ® Balancing ® Recalculate.
• Accounts that are to be closed, even if they are not yet due.

 Example

The accounts are divided into intervals and these account intervals are distributed to various processors or servers. You can set the size of the intervals in the Implementation Guide by choosing Periodic Tasks ® Parallel Processing. The account number serves as criterion for this.

The following processing steps in the various areas are performed for each "due" account:

• Account master: The balancing date defined in the account master data serves to determine the periods to be settled.
• Conditions: The conditions and limits stored in the system are used for the accounts to be balanced. If no individual conditions are stored, the standard conditions always apply. With regard to limits, only the overdraft limit is used for balancing.
• The value date daily balances are determined.
• Item counter: The system reads the item counter to calculate the charges and dispatch expenses due. The value stored on the balancing date applies for the calculation of the charges.
• Account balancing table: Calculation of interest and charges.
• Tax calculation: Transfer of the required data for tax calculation.
• Posting the account balancing: The interest and charges are posted. For this, the system creates a document containing several items (one per condition category). Separate documents are created for adjustment postings of old periods. The data is transferred to the general ledger and the account is updated.

In connection with the balancing date and posting date of the transactions, nine possibilities for calculating the interest and charges result.

The following table shows the possible combination of value and posting date and how they are considered during settlement. As an example, February is the period to be settled, January is the period already settled and March is the following period.

You can derive the following from the above graphic:

If interest income tax is to be calculated for adjustment periods, the current account system transfers the total interest. In this connection, total interest means that all the interest from the adjusted period is transferred and not just the difference. In the example explained below, the total interest amounts to 12 DM. However, for further processing after calculation of the income tax by the interest income tax module, the current account system expects the amount of the difference.

The processing of the interest for interest income tax in online mode with the user-defined interest income tax module is equivalent to a processing step between different systems with no interruption. Following are details of the steps each interval passes through:

• Calculated interest is transferred to the interest income tax interface
• The interest income tax module calculates the interest income tax
• The interest income tax module transfers the calculated interest income tax back to the current account system
• The current account system further processes the data

Error handling:

If an error occurs during editing in online mode, the current account system terminates the processing. Once the error has been remedied, you must restart account balancing. Choose Periodic Tasks ® Account Balancing ® Restart.

The processing of interest in batch mode is different from online mode in as far as it takes place in systems independent of one another. Each interval passes through the following steps:

• Calculated interest is transferred to the interest income tax interface
• The interest income tax module calculates the interest income tax in an asynchronous manner to the current account system
• The interest income tax module calls up the current account system at a later point in time and transfers the data (BAPI_COND_CALC_AFTER_WHTAX)
• The current account system further processes the data

Error handling

1. Error in the current account system: If an error occurs in the current account system during editing in batch mode, no posting is made as a result. Once the error has been rectified, choose Periodic Tasks ® Account Balancing ® Restart, to restart the balancing run.
2. Error in the interest income tax module: If the interest income tax module has terminated processing, the interest income tax module must trigger the restart. It is not possible to have the account balancing restarted by the current account system.

After the changeover of the account, all items from balancing are posted in euro - including those for periods ending before the changeover key date (value dates in the past). For periods after the changeover key date, the amounts transferred back from the interest income tax interface are in euro currency. If, however, a period that lies before the currency changeover date is recalculated, interest income tax adjustments can be transferred back to the current account system both in euro and in DEM.

If you are using SAP FI, the interest is transferred from the current account system to the interest income tax module in local currency, too. If your interest income tax module only recognizes the local currency as currency, you can define the company code in the bank area. If the currencies do not match, the current account system converts the currencies, provided the currency involved is one participating in euro changeover. The euro is handled like a participating currency.

Value dates in the past are postings from the current settlement period whose value date lies in a period already settled. Value dates in the past can occur in any prior period. The entire period is recalculated, with the inclusion of the value dates in the past. The result is compared with the interest of the last settlement. The difference is identified in the current balancing as adjustment from value dates in the past.

• Posting

If there is a value date in the past on the last day of a previous period, this amount is not posted in the balancing balance of the previous period. This day counts as the first day of a new period. Value dates on the last day of a period do not lead to the adjustment of a period, as interest is calculated for the last day in the previous period.

• Balancing balance

In the case of value dates in the past, the balancing balance of the period to be adjusted depends on the posting date of the adjustment period. We distinguish between three cases:

Example: Current period - February, adjustment period - January

Value dating describes the key date-related value date of an account balance or of an item on a customer account. On the value date, interest calculation starts for the changed balance resulting from an incoming or outgoing payment. If there is value dating to the past to a balanced period, the credit and debit interest and the overdraft interest for the balanced period has to be recalculated.

Value dates in the past in periods already settled lead to the following results:

The value date of the adjustment posting with the newly calculated interest corresponds to the end date of the adjustment period.

 Example:

If the balancing has been completed successfully, the account balancing is posted. You can take a look at the balance and also the turnovers, interest and charges on the bank statement.

The results of the balancing are transferred to the general ledger. The customer account is updated.