Setting up A/R Direct Debits

With direct debit, you can automatically collect payments from a customer using an electronic funds transfer (EFT) file.

After a direct debit A/R payment is posted, the DebitTransfer BOD is populated. The BOD is processed by Infor Localization Services, which then uses the data to create an EFT file for bank collection. This file is sent to the bank, informing the bank to move the funds from the customer's bank and account to your company's bank and account. Your company's bank then initiates an EFT to the customer’s bank to have the funds transferred by a bank-to-bank EFT. When you receive a bank statement from your company's bank, you must manually enter direct debit deposits on the Bank Reconciliations form.

The support for structured and unstructured fields that include reference information such as the invoice number is dependent on the bank, or in case of bank-to-bank transfer, it is dependent on both banks.

Prerequisites

You must perform these tasks outside the application before you set up direct debit in the application:

  • Obtain a signed mandate from the customer. The reference number on the mandate is entered into the system and included in BODs and electronic messages.
  • Obtain the IBAN numbers for your company and your customers.
  • Obtain the BIC numbers for your company and your customers, if applicable.
  • Obtain the Bank Authority Party IDs for your company and your customers, if applicable.

Direct Debit Setup

  1. On the Chart of Accounts form, add any new accounts and unit codes for direct debit receivables. This account is used when an A/R payment is posted whose type is direct debit. The account is credited when the corresponding bank reconciliation deposit is entered.
  2. On the General Parameters form, specify your company's Bank Authority Party ID, if your company does business in countries that require it.
  3. On the Countries form, you should already have set up country codes that map to ISO country codes. You must also set up the Bank Transit Number Mask in this form for each country where you will transmit electronic banking data. See the help for this field for some examples of the masking format.
  4. On the Accounts Receivable Parameters form, Electronic Banking section, specify the Direct Debit Receivable Account to use as the default account for direct debits. This can be overridden for End User Types or for specific customers.
  5. Optionally, on the End User Types form, specify the direct debit receivables account information. This account is used as the default Direct Debit Receivable Account for customers if either of these statements is true:
    • The customer does not have an end user type.
    • The customer has an end user type, but the end user type does not have a Direct Debit Receivable Account.
  6. On the Customers or Multi-Site Customers form, specify the customer’s banking information. The information that you must supply depends on the requirements of the banking authority. It can include these fields:
    Bank Code
    Specify the bank code that describes your company’s bank account that you use to receive direct debit A/R transactions from this customer.
    Payment Type
    Specify Direct Debit.
    Customer Bank
    Specify the bank code that describes the customer’s bank account that will be debited when the A/R payment is sent to your bank account.
    IBAN
    Specify the customer’s international bank account number.
    BIC or Bank Authority Party ID
    Specify the customer BIC or Bank Authority Party ID, as applicable.
    Mandate Reference
    Specify the reference number of the agreement with this customer to allow direct debit from this account.
    End User Type
    Optionally, specify a user type to use the default Direct Debit Receivable account from the End Users form instead of from the A/R Parameters form.
  7. On the Bank Reconcilations form, specify information about the banks that you will use for EFT transactions. This includes your company's bank as well as customer banks.
    • Create a bank code and specify the appropriate information to describe the banks where your company has accounts. This can include your company’s IBAN number and the currency in which the bank deals, your company’s BIC number or Bank Authority Party ID, as appropriate.

      Your company might have accounts at banks in different regions or in different currencies, to simplify dealing with customers in those regions or currencies.

    • Create a bank code and specify information to describe each of the banks where your customers have accounts. Specify the currency in which each bank deals.

      For customer’s banks, also specify the appropriate EFT information, which can include the IBAN number, BIC number or Bank Authority Party ID, as appropriate.

    • If your customers use an Optical Character Recognition (OCR) number in banking, select the appropriate settings in the OCR Reference Control fields.
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