Outgoing Payment Processing

Outgoing Payment Processing is the final step in the Procurement Cycle. The system employs an automated Payment Program which provides full functionality for processing Vendor payments. Chapter Objectives Describe the input data needed to configure the Payment Program. Discuss cash discount strategies. Execute the Payment Program.

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Payment Program Overview

Configuration Master Record Online Parameters Open Items Payment Proposal Run Process Proposal Data Payment Run Payment Data Print Program Proposal

Payment Media
Check Bank Transfer Payment Advice Payment Summary
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Payment Program Input Data

Master Record Address Account Control Bank Details Account Mgmt.

Configuration

Online Parameters Payment Date Select Company Codes

Open Items

Payment Program Select Bank(s) Payment Method

Select Open Items Select Accounts

Cash Discount fields Payment Method Payment Block

Paymt. Transaction Minimum Amounts Next Payment Date Specific Bank Automatic Paymt. Available Amounts Transactions Block Reason

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Input Data
Master Record Address Bank Account(s) Alternative Payee Payment Terms Payment Methods Payment Block Clear with Customer Our bank Invoice Payment Term Payment Block Payment Method Payment
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Master Record Complete?

+
Open Items to Pay?

Payment Program - Control Levels

Company Codes All Company Codes Paying Company Codes

Payment Methods

Country Company Code

Banks

Ranking Order Amounts Accounts

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Company Code Parameters

All Company Codes

Cash Discount Strategies

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Cash Discount Strategies

Cash Discount will only be taken if the applicable cash discount exceeds the percentage.

Maximum Cash Discount will always be taken. Due Dates are not considered.
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Company Code Parameters

Paying Company Codes

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Payment Method in Country

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Payment Method in Country

Payables Check Bill of Exchange Bank of Transfer (domestic + foreign) Postal Bank Transfer Check / Bill of Exchange Group Clearing (between Company Codes)

Receivables Bank Collection Bank Direct Deposit Request for Bill of Exchange Bill of Exchange Refund by Bank Transactions Refund by Check
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Payment Methods in Company Code

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Payment Methods in Company Code - Form Data

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Bank Ranking Order

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Available Amounts

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G/L Account Assignment for Bank Accounts

Company Code 1000 . House Payment Bank Method 10000 10000 . . 20000 20000 20000 B C . . B C D Currency Account ID 10000 10000 . . 20000 20000 20001 Name of Company Boots - R - Us . G/L Account G/L Account G/L Account . . G/L Account G/L Account G/L Account Clear Charge BusA Account Type 0001 0002

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Payment Currency
Euro Payment Program
Open items AUD SEK ARS It is possible to process payments that contain an alternative payment currency (i.e., a currency other than the invoice currency)

USD

JPY

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Payment Blocking Reasons

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Automatic Line Item

Example: Payment Program

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Automatic Line Item

Example: Cash Discount Received
Office Supplies 1 Accounts Payable 2 2000 2000 1 2000 Fuji Bank 1940 2 Cash Discount Received Automatic Line Item 1. Invoice 2. Cash Disc. 3. Payment 2000 60 1940 60 2

(Payment Term: 3% Cash Discount)

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Automatic Line Items

Example: Cash Discount Received

Cash Discount Received - SKE Chart of Accounts Process Account Rules 1000 SKE 700210 Posting Keys

Account Assignment Depends on: Debit / Credit Tax Code

Posting Key Debit Credit 40 50

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Maintaining Parameters
Payment Run Date Identification 05/27/YY xyz

Posting Date 05/27/YY Document Entered Until 05/26/YY Company Codes Payment Next Posting Method Date 1000 US 06/14/YY Vendors (from/to) Customers (from/to) 1 9999 1 9999

Additional Log TRACE

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Payment Proposal Run

Payment Run Date Identification xyz 05/27

Start date 06/06 Start time HH:MM:SS Start immediately Status Proposal is released Proposal is running Payment Proposal has been created
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Intermediary Banks: Solution

Own Bank Payment Program

Intermediary Bank(s)

Vendor Bank

Companies have the option to specify not only the banks at the start and at the end of the payment cycle (House bank and the business partner bank) but also the banks via which the payment should be made in between. The payment program can determine a predefined combination of intermediary banks for each payment

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Payment Proposal Data

Proposal Data
Process

Display List

Display Exceptions

Proposal Log

Payment List
Amounts by Business Areas Amounts by Countries Amounts by Currencies Amounts by Payment Methods Amounts by Banks
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List of Blocked Accounts/Items

Due date check Select Payment Method Payment Records

Payment Run
Payment Run Date 05/27 Identification xyz

Status _________________________________ Parameters have been entered. Payment proposal has been created. Schedule Payment Start date 06/06 Start time HH:MM:SS Start immediately Status _________________________________ Parameters have been entered Payment proposal has been created Payment run has been released Payment run is in process Payment run has been carried out: 1 generated, 1 completed Payments have been posted

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Payment Media
Payment Data

Print Program Report RFFOUS_C

Check Bank Transfer

Payment Advice

Payment Summary

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Check Form Structure

HEADER PAGE INFO Your account at vendor

ADDRESS MAIN Text Heading Line items Total

CARRYFWD CHECK/CHECKADD Voided or Valid

Amount to carry forward

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Outgoing Payment Program Chapter Summary

Key Terms Outgoing Payment Program Payment Method Payment Block Paying Company Code Sending Company Code Optimization by Bank Group Optimization by Postal Code Variant

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Outgoing Payment Program Chapter Summary

Key Terms Payment Currency Intermediary Bank Bank Chain

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Appendix 1. Alternate Payment Currencies

The automatic payment program can create payments for documents in any desired payment currency.
Local Currency

Transaction Currency

Payment Currency

Payment Amount (optional)

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Appendix 1. Alternate Payment Currencies

TC= BRL, LC= MXN, PC= USD Vendor 1750 BRL (10000 MXN)
Vendor line item: Entering Altern pymt currency: USD Altern pymt amount : $1000

Currency translation: BRL->MXN: 5.714 + Table of exchange rates: M: MXN USD = 0.102

Warning/ Error: Payment amount differs by 2% from calculated amount: 1750 * 5.714 * 0.102 = $1,019.49

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Appendix 1. Alternate Payment Currencies

Transaction currency Local currency BRL MXN Payment currency USD
1 000
EXCHANGE RATES

Vendor invoice Payment

1 750

10 000

BRL:MXN > 0.175:1 MXN:USD > 10:1

1 750

9 500

1 000

BRL:MXN > 0.2:1 MXN:USD > 9.5:1

MXN 8 750
MXN 1 250 exch. rate diff. gain Value of the open item at the current exchange rate 1750 / 0.2 MXN 750 underpmt loss

MXN 500 GAIN

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Appendix 2. Intermediary Banks and Bank Chains - Activities

1. DEFINE SCENARIO (general, business partner specific) 2. ACTIVATE SCENARIO 3. DEFINE A BANK CHAIN
A) General bank chain - independently of a business partners bank details - in IMG
OR

B) Partner Specific - on the application side House bank Business partner (customers and vendors) Cash management carry over

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Appendix 2. Intermediary Banks and Bank Chains - Scenarios

Scenario Description Gen. Search Rec. Search

0001 0002 0003 0004

No bank chain determination Sender oriented Receiver bank oriented Receiver oriented

General search:
Find bank chain using key fields:

Account no./ recipient specific search:

Find bank chain using key fields:

bank country
and

bank key

bank country, bank key and bank account number

Customizing

Application

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Appendix 2. Intermediary Banks and Bank Chains - Scenarios

Example: Scenario 0002, Business partner specific search, sender bank is house bank
Scenari o Ranking Sender bank Recip. Bank ctry Rec. Bank Pmt.Curr.

0002 0002 Payment program run Output

0 1

Pmnt. Currency : UNI House Bank ctry : DE House Bank key : 10020030 Vendor : Vendor 1 Vend.bank ctry: DE Vendor bank:12345678 bank acct. no: 87654320

1st step: Search with key: sender bank (bank ctry and - key) and payment currency. (if not successful) 2nd step: Search with key payment currency

Currenc y

Bank ctry. sender Bank key sender

UNI UNI

DE

10020030

Bank chain assignment: Correspondence banks

No. Category Corr. country Corr. Bank key Corr. Bank acct.

DE

40050060

86746352

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Appendix 2. Intermediary Banks and Bank Chains - Scenario 1

HB1 HB2 HB3

Explanation: HB = House Bank CB = Correspondence Bank BPB = Business Partner Bank

CB 1

CB 2

CB 3

BPBs

= Payment direction
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Appendix 2. Intermediary Banks and Bank Chains - Scenario II

HB

CB 1

CB 2

CB 3

Explanation: HB = House Bank CB = Correspondence Bank BPB = Business Partner Bank

BPB 1 BPB 2 BPB 3

= Payment direction
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