Automatic Supplier Check Payment

Description of Process

Use this process for automatic supplier check payments. The process begins with the generation of a payment proposal based on criteria such as payment date interval, currency, or suppliers to be covered. You can select specific invoices, include credit invoices, and use cash discounts. The selection can be made using a number of terms. You can also generate an empty proposal and enter invoices manually. Only authorized invoices can be selected. The payment proposal must be acknowledged and a payment order created with check as the payment method to begin the printing of checks. You can enter a check handling code at invoice entry. These codes are used when checks will be printed in a specific sort order according to priority. When the payment is matched with invoices, the invoices and the payment will be assigned with a unique ID and a matching date.

Depending on how the basic data is set up in the Payment Documents window at entry, checks are considered as cashed at printout or posted on an interim account until confirmation is received from the financial institution, or payment institute, that the check has been cashed. When checks are printed, a voucher is generated with postings to accounts payable and, if used, to the transit account. The transit account is a temporary account to which checks are posted that are waiting to be cashed by the bank. When the checks are reported as cashed, another voucher is created that reverses the posting to the transit account and debits the cash account. Checks printed once can be reprinted. For payments made by check, the system creates a unique payment ID with a payment type of Check Payment.

You can specify the number of invoices to be printed on each check per payment occasion, the number of checks per payee per occasion, and any cancellation of the first check, i.e., the total of all check slips printed on the last check. This information should be specified before you start using the automatic supplier check payment function. The process handles functions for canceling printed checks, reprinting previously printed checks, and corrections of checks, e.g., those that were incorrectly cashed.

A function within the Check Payment process handles supplier offsets between debit and credit invoices, between payments on account and invoices, between payments in advance and invoices, and against parked payments. The offset process does not cause any cash flows in the cash accounts, and the total amount must always be zero.

Although each payment is always made by a single company, a payment proposal, payment order, file, document output, or acknowledgement for that company can include invoices and payments on account from other companies. Companies included in the payment must support payment methods used by the paying company. If specific payment instructions exist on an invoice, these are always used, no matter which values were set up as the defaults for the supplier for the company making the payment. Inter-company claims and debts are automatically created to cover the relation between the involved companies.

Note: Before you start entering information, check that Basic Data Required (BDR) has been set up as per instructions in Define Financials Basics, the Set up Basic Data Accounts Payable process.