1. What is the Lockbox Process?
Lockbox is an electronic banking service where customers send their payments (usually checks) to a bank’s lockbox address instead of the company’s mailing address.
The bank processes the checks, prepares a lockbox file (BAI2, BAI, or EDI 823 format), and sends it to the company.
SAP reads this file via FLB2 (Lockbox Processing) or via EDI/IDoc in newer versions.
Based on the file, SAP:
- Updates customer incoming payments (clears open items in AR).
- Posts to G/L accounts if customer reference is missing.
- Places unapplied cash in “unallocated” accounts for manual follow-up.
Goal: Automate cash application, reduce manual reconciliation, and improve Days Sales Outstanding (DSO).
2. Lockbox Process Flow in SAP
- Customer mails check → Bank Lockbox.
- Bank receives check, deposits money, and creates a lockbox file.
- Company uploads file into SAP using T-code FLB2.
- SAP interprets data (customer number, invoice reference, check number).
- System clears AR open items automatically.
- If match not found → unapplied cash posted to a suspense/clearing account.
Configuration Steps in SAP (SPRO Path + T-codes)
A) Define House Banks and Accounts
- T-code: FI12
- Maintain bank key, house bank, bank accounts for lockbox deposits.
B) Define Lockbox Keys
Path: SPRO → Financial Accounting → Bank Accounting → Business Transactions → Payment Transactions → Lockbox → Define Lockbox.
Enter:
- Lockbox ID (e.g., LB01)
- Bank key
- Account ID (House bank account)
C) Define Posting Data for Lockbox
Path: SPRO → Financial Accounting → Bank Accounting → Business Transactions → Payment Transactions → Lockbox → Define Posting Data.
Assign:
- G/L accounts for unallocated cash (temporary clearing account).
- Tolerance groups.
D) Define Lockbox Data Mapping (EDI/BAI2/823)
- Configure mapping of bank file fields to SAP fields.
- Example: Check number, invoice reference → SAP customer open item search.
E) Customer Master Setup
- Payment transactions tab → Enter customer bank details, tolerance groups, and Lockbox details for automatic matching.
F) Run Lockbox Processing
- T-code: FLB2
- Input: Lockbox file path, posting date, bank key, lockbox ID.
- System processes → Generates batch input session (SM35) for review/posting.
Scenarios in Lockbox Processing
Scenario 1: Perfect Match
Customer payment references correct invoice number + customer account.
SAP clears the open item automatically.
FI Posting:
- Dr Bank Account
- Cr Customer Account (clearing open invoice)
Scenario 2: Customer Found, Invoice Missing
Customer is identified, but invoice reference not found.
SAP posts unapplied cash to customer account (on-account posting).
FI Posting:
- Dr Bank Account
- Cr Customer Account (on-account, unapplied)
AR team clears manually later.
Scenario 3: Invoice Found, Customer Not Found
Invoice reference exists but customer master missing or mismatch.
System posts to Unallocated Cash G/L account (clearing/suspense account).
FI Posting:
- Dr Bank Account
- Cr Unallocated Cash Account
Scenario 4: Short Payment (Partial Payment)
Customer pays less than invoice amount.
System clears partial amount and leaves remainder open.
FI Posting:
- Dr Bank Account (amount received)
- Cr Customer Account (partial clearing)
- Open AR balance remains.
Scenario 5: Over Payment
Customer pays more than invoice.
Excess goes to customer account as credit (on-account posting).
FI Posting:
- Dr Bank Account (full check amount)
- Cr Customer Account (invoice cleared + excess on-account)
Scenario 6: Check with No References
Neither invoice nor customer can be identified.
SAP posts to unallocated cash G/L.
FI Posting:
- Dr Bank Account
- Cr Unallocated Cash Account
5. Reports and Monitoring
- Customer Line Item Display → FBL5N (check cleared, on-account, unapplied cash).
- Bank Account Line Item Display → FF7A (bank reconciliation).
- Batch Input Sessions → SM35 (monitor lockbox posting jobs).
- Cash Application Reports – Custom Z-reports or via SAP FSCM (Collections & Dispute Mgmt).
6. Best Practices & Governance
- Automate FLB2 via background job for daily cash application.
- Define clear unapplied cash G/Ls to avoid misstatements.
- Reconcile daily between bank statement and lockbox posting.
- Use BTE (Business Transaction Events) for customer-specific enhancements (like invoice matching logic).
- Audit Trail: Keep lockbox files archived for audit purposes.
