Account Balancing 

Purpose

Accounts are balanced regularly as part of the periodic tasks in accounting. Account balancing is triggered periodically in accordance with the entry in the account master. You can set the time periods on the account to determine the frequency.

During account balancing, the system does the following:

·        It determines the balancing balances.

·        It calculates the balancing interest and charges according to the conditions assigned to the account, and updates the respective account.

·        It updates the balancing date defined in the account master to the next date.

·        It transfers the interest to the module for the calculation of interest income tax for processing.

·        If necessary, the system adjusts balancing from earlier periods if there are value dates in the past, backdated postings, or a retroactive condition change in periods that have already been balanced.

Accounts can be balanced in a mass run or individually. It is possible to simulate a balancing directly on the account. To simulate balancing runs, choose Periodic Tasks ® Account Balancing ® New Run ® Single or Mass Run. In the process flow control on the next screen, choose simulation on the next date. For more information on how to use account balancing in end-of-day processing, or the connection with other periodic tasks, see Process Flow of End-of-Day Processing.

As an alternative to standard updating, you can enter balancing postings on another account, called the reference account. The reference account can be in another bank area in the current account system as well as with another bank outside the current account system. For more information, see Creation of a Reference Account for Balancing. When you enter these postings, the system fills the payment notes. You can use the business transaction event 00010830 or 00010831 (see Filling Payment Notes for Balancing Postings or Balancing Postings: Filling External Payment Notes).

Prerequisites

To balance an account, you need to maintain the account balancing data. For more information, see Maintaining Balancing Data.

Conditions must be assigned to every account that is to be balanced. You can assign standard or individual conditions to an account. For more information, see Assigning A Condition Group to An Account or Creating Individual Conditions.

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

You enter balancing postings with the end date of the period to be balanced as the value date and the Posting Date - Balancing Postings defined in the system as the posting date. (For more information on setting the posting date, see Setting the Posting Date)

In Bank Customer Accounts, the posting date of the payment transaction is different from the posting date of the balancing. Once the date has been updated and the payment transaction postings entered, you can balance accounts. 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, an account has the following options:

·        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 to 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 one following that. Adjustments are always made in the period in which the posting date lies.

Process flow of interest and charge calculation

1.   Selection of the accounts

Accounts are selected for the calculation of interest and charges according to bank area, balancing type, balancing (interest and charges), and balancing date. In addition, you can restrict the selection by specifying a product. If you specify more than one bank area, you cannot restrict the selection by specifying a product.

The following accounts are selected:

·        Due accounts, which have an account balancing date in the master data that is before or on the selection date for account balancing.

·        Accounts to be balanced again, even if they are not yet due. These, are, for example, accounts whose conditions for interest income tax have changed. You need to trigger this new calculation in the system. To recalculate balancing from past periods for individual accounts, choose Environment ® Balancing ® Recalculate in the master data of that account.

·        Accounts to be called,  which are accounts whose maturity date in the term agreement is either on or before the selection date in the account balancing.

·        Accounts that are to be closed, even if they have not yet matured.

 Example

It is assumed that the balancing date of an account is June 30 and the account is to be closed on July 2. The date on which closure actually takes place is July 5. This account is balanced until June 30 as normal. For the period between June 30 and July 2, you need to trigger a separate run for the account that is to be closed. If the run is to take place on July 5, then you need to balance the account that is to be closed in a single run. If processing is not urgent, the account can be balanced automatically on the next day in the mass run ( in this case, July 6).

2.   Dispatching and parallel processing of the process flow

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 is used as the criterion for this.

3.   Processing

The following processing steps for the different areas, for each “due” account:

·        Account master: The system uses the balancing date defined in the account master data to find the periods that are to be balanced.

·        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 daily balances based on the value date are determined by the system.

·        Item counter: The system reads the item counter to calculate the charges and dispatch expenses due. The system uses the counter value from the balancing date to calculate 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, whereby the system creates a document containing several items (one for each 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.

 

The balancing date and posting date of the transactions mean that there are nine options for calculating the interest and charges.

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

 

The above graphic can be interpreted as follows:

Dates	Interest calculation	Charge calculation
1 Posting date and value date are the same, in this case Jan. 2.	No The period is balanced and is not adjusted.	No The period is balanced and is not adjusted.
2 Posting date is Jan. 2 and value date is Feb. 5. (value date in the future at last balancing)	Yes Interest occurs in the period to be balanced - February	No Charges are levied when the item is posted, in this case, January.
3 Posting date is Jan. 2 and value date is Mar. 3.	No (Reason: Interest is calculated at the next balancing.)	No (Reason: Charges already calculated at the last balancing.)
4 Posting date is Feb. 5 and value date is Jan. 3. (Value date in the past)	Yes The period is recalculated.	Yes Charges are levied when the item is posted, in this case in the period to be balanced - February.
5 Posting date is Feb. 5 and value date is Feb. 6. (Normal case)	Yes	Yes
6 Posting date is Feb. 5 and value date is Mar. 4. (Value date in the future)	No (Reason: Interest is calculated at the next balancing.)	Yes Item charges incur that are levied in this current period.
7 Posting date is Mar. 5 and value date is Jan. 4.	No (value dates in the past already known for the next balancing are not included, as interest calculation then dependent on time of balancing)	No (Reason: Charges are included in the next balancing)
8 Posting date is Mar. 5. and value date is Feb. 7.	No	No
9 Posting date is Mar. 5 and value date is Mar. 5.	No	No

 

 

Interest income tax:

Interest income tax is calculated by a separate, customer module that you call by using an Event (Business Transaction Event). Interest income tax can be calculated in batch and online processing. Only the accounts with credit interest and/or the indicator Relevant for Interest Income Tax on the account are transferred.

If interest income tax is to be calculated for adjustment periods, the current account system transfers the total interest. In this case, total interest means that all the interest from the adjusted period is transferred and not just the difference. The example below shows the full interest for the amount of 12 USD. However, you need to enter the difference amount in the current account system for continued processing after the interest income tax has been calculated by the interest income tax module.

Interest income tax module in online mode

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. The following are the steps for each interval:

·        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 Processing:

If an error occurs during online processing, the current account system terminates the processing. Once you have corrected the error, you need to restart the account balancing. Choose Periodic Tasks ® Account Balancing ® Restart.

 

Interest income tax module in batch mode

Processing interest in batch mode is different from online mode because it is done in independent systems. Each interval passes through the following steps:

·        Calculated interest is transferred to the interest income tax interface.

·        The interest income tax module does not calculate the interest income tax at the same time as 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 continues processing the data.

 

Error Processing:

·        Error in the current account system: If an error occurs in the current account system during batch processing, nothing is posted. Once you have corrected the error, choose Periodic Tasks ® Account Balancing ® Restart  to restart the balancing run.

·        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 restart the account balancing from the current account system.

Interest income tax and euro

After the changeover of the account, all items from balancing are posted in Euros - 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 Euros and in USD.

If you are using SAP FI, the interest is transferred from the current account system to the interest income tax module in local currency, also. If your interest income tax module only recognizes the local 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 the Euro changeover. The Euro is handled like a participating currency.

 

Adjustment postings from periods already calculated

Value dates in the past are postings from the current balancing period whose value date lies in a period that has already been balanced. 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 balancing. The difference is displayed in the current balancing as an adjustment resulting from value dates in the past.

·         Post

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. There are three different situations:

 

If	Then
Posting date in the adjustment period	Adjustment posting in the balancing balance Example: January is the adjustment period. If the posting date is Jan. 23, the adjustment posting is contained in the balancing balance for January. The adjustment of the balancing balance takes place in the balancing for February.
Posting date after the adjustment period but before or on the next deadline	Adjustment posting in the next balancing Example: January is the adjustment period. If the posting date is Feb. 5, the adjustment posting is NOT contained in the balancing for January but for February.
Posting date is after the next deadline	Adjustment posting in the next but one balancing Example: January is the adjustment period. If the posting date is Mar. 17, the adjustment posting is contained neither in January nor in February. It is not contained in the balancing balance until March, as soon as this is balanced.

Example: Current period - February, adjustment period - January

 

Interest adjustment for a period that has already been balanced

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 balanced lead to the following results:

Calculated credit interest was too high	Minus credit interest (account is debited)
Calculated credit interest was too low	Plus credit interest (account receives credit)
Calculated debit interest was too high	Minus debit interest (account receives credit)
Calculated debit interest was too low	Plus debit interest (account is debited)
Calculated overdraft interest was too high	Minus overdraft interest (account receives credit)
Calculated overdraft interest was too low	Plus overdraft interest (account is debited)
Calculated commitment interest was too high	Minus commitment interest (account receives credit)
Calculated commitment interest was too low	Plus commitment interest (account is debited)

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

 Example:

Period 1 was balanced with credit interest amounting to 10 USD. A value dating in the past results in new credit interest of 12 USD. The difference of 2 USD is not adjusted when the value date in the past is posted, but at the next balancing of period 2. This means that period 1 is recalculated in period 2 and the customer receives 2 USD plus credit interest.

Result

If the balancing was successful, 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 balancing results are transferred to the general ledger. The customer account is updated.