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The receipt of payment from a customer is the final step in the integrated Sales Cycle. The system provides full functionality for processing customer payments, clearing open items in the Customer Account and resolving any payment differences.

Chapter Objectives

– Provide an understanding of how the system processes incoming payments.

– Provide an understanding of how the system processes payment differences.

– Provide an understanding of Payment Advice functionality and its uses.

Chapter 20Incoming Payment Processing

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Post Incoming Customer Payment

Mandatory Dates

Bank Account &Amount paid

Customer Account

Defaulted Information:

Document Type(for payment)

Account Type(for Customer)

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Entering the Customer Payment

Parameters for Open ItemSelection

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Selecting Open Items to Be Cleared

Activated Open Item

Entered & Assigned Amount

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If a payment amount doesn’t match the open item amount, it can be processed as a partial payment or residual payment.

• Leaves original invoice intact (full amount)

• Credits the Customer Account for the payment amount

• No items are cleared

• Clears the original invoice

• Creates a new invoice for the remaining amount

• The new invoice has a new Document Date and

Baseline Date; although it is changeable

Partial Payment

Residual Payment

Partial Payment / Residual Payment

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Structure:

HeaderDate Amount Currency

1/27/98 700 USD

Item 1Amount Cur. Doc. #

100 USD 123

Item 2Amount Cur. Doc. #

600 USD 999. . .

MatchMatch

Usually byDocumentNumber

Payments

Invoices

Documents:

Doc. # Amount Cur.

123 100 USD

456 500 DEM

789 200 USD

999 600 USD

627 235 SFR

Payment Advice

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Customer:Receives GoodsSends Payment

Seller:Receives PaymentSends Goods

ExecutePayment Program

PaymentAdvice

ClearedDocuments

Generate Clear

Sending and Receiving Payment Advices

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Types delivered with the system:

AccountStatement

EDI

Bank

Lockbox Manual

Types of Payment Advices

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Payment DifferenceDetected

How to Handle the Difference:

Write off to a G/L Expense Account(Charge Off Indicator is set)

Or

Generation of a New Item(Charge Off Indicator is not set)

ReasonReasonCodeCode

Automatic Handling of Payment Differences

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Bank:

LockboxFile

(Format)

LockboxFile

(Format)

PaymentAdvice

Database

PaymentAdvice

Database

ChecksChecks

ClearedDocuments

BAI:Bank Administration Institute

A Payment Advice is created for each check.

Lockbox Processing

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Key Reports:

RFEBLBT1: Generates pre-programmed test data (for internal use only)

RFEBLB00: Imports data into lockbox processing

RFEBLB20: BAI format processing

RFEBBU00: Post account statement / check deposit listing

Key Tables:

T049A: Destination and origin definition (“Who”)

T049B: Format definition (of EDI, BAI, etc.) (“How”)

T049C: Evaluation of Autocash Tapes(creation date and time) (output - results)

T049L: Link to House Bank table for Lockbox Master

Lockbox Processing

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Interest Calculation

• The R/3 Interest Calculation program calculates and books interest on customer/vendor accounts in arrears resulting from items that are not yet paid or were paid too late.

• User definable correspondence for the recipient is generated specifying the details of the transaction.

• Configuration options determine timing and rates of interest.

Invoice

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Chapter 20 - Incoming Payment Processing Chapter Summary

• Key Terms:

– Clearing– Partial Payment– Residual Payment– Payment Advice– Reason Code– Lockbox Processing