Remitting Customer Checks/Drafts to Bank for Collection

This document explains how to remit customer checks, postdated checks or drafts to the bank to be cashed (collected).

You can divide the remittance between different bank accounts. You can also select the bank account or accounts to use for the remittance either manually or by applying user-defined bank quotas.

Note: The term 'discounted' is used in this process for drafts cashed before their respective due date.


Customer checks or drafts are cashed by the bank.

These lists are printed:

A bank report is returned that indicates the payment documents that have been cashed or rejected.

The remittance proposal and statement are saved in these tables: FARREM (master table for bank remittance), FARRED (details), and FARREX (remittance numbers). The 'Payment remittance status' field (PYRS) is also updated in the accounts receivable table (FSLEDG), blocking the payment document from being included in another remittance statement.

Each confirmed bank remittance statement is assigned a remittance number. This number is saved as additional information on the invoices included in the remittance (additional information number 210 in accounts receivable). Each account entry for collected or discounted drafts is saved with additional information number 013 in the general ledger.

Depending on the definition of the payment type in 'AR Payment Type. Open' (CRS076), the customer risk is cancelled for postdated checks (type 2) at remittance.

Status Changes

Remitted drafts have received remittance status 20. Checks have status 90.

Account Entries Created

Accounts receivable and the general ledger are updated. Drafts are posted to a specific transition account and checks to a bank account. The following account entries are created:

Checks – Payment Class 1

Accounting Rule Account Debit Credit


Checks not cashed







Checks – Payment Class 2

Accounting Rule Account Debit Credit


Drafts/checks not remitted (not an AR account)







Drafts Collected on Due Date

Accounting Rule Account Debit Credit


Drafts/checks not remitted (AR account)




Drafts remitted



Drafts Discounted

Accounting Rule Account Debit Credit


Drafts not remitted(AR account)




Drafts discounted



Before you start

Follow These Steps

  1. Create Bank Remittance Proposal

    Create a proposal of either drafts or checks to be remitted in 'Bank Remittance. Open' (ARS300). Check that the correct records are included in the proposal. Adjust the proposal by deleting any records that should not be included in the final remittance statement. Confirm the verified proposal and print the remittance statement. When printing the statement, the general ledger and accounts receivable are updated automatically.

  2. Send remittance statement to bank

    Send the original checks or drafts together with the remittance statement to the bank or banks selected.

  3. Reconcile collected crafts.

    The bank remittance, once confirmed in (ARS300), is displayed with the included payment documents in 'Bank Remittance. Reconcile Payment' (ARS350).

    Based on the report on cashed drafts returned by the bank, reconcile drafts in 'Bank Remittance. Reconcile Payment' (ARS350). At the same time, enter any deductions due to bank fees or deduction of calculated interest between the discount date and the due date.

    Cashed checks do not need to be reconciled or otherwise reported. The only exception is definite postdated checks (type 1), since they are processed as drafts in M3.

    For information about how to report checks or drafts rejected by the bank, see Managing Customer Checks/Drafts Rejected by Bank.

SEPA for draft remittance

Customer agreements are retrieved from 'Direct Debiting Agreement. Open' (ARS450) when doing drafts remittances in 'Bank Remittance. Open' (ARS300). The parameter for SEPA schemes and agreement type must be selected on the payment type in 'Payment Type. Open' (CRS078) for payment class=4. When confirming these SEPA draft remittances, the customer agreements in (ARS450) are updated in the same way as for SEPA direct debiting remittances.

Selection and deletion of remittances for SEPA direct debiting

In the SEPA direct debiting process, remittance proposals are created in 'Bank Remittance. Open' (ARS300) and when confirmed they end up in (ARS350). The remittances must be left in (ARS350) to make it possible for the user to reverse the remittance of a specific invoice later on, if the customer decides not to accept the direct debiting withdrawal of that invoice.

Once the remittance is not used anymore and there is no risk that a remittance, or single payments within such a remittance, will be reversed, the remittances need to be deleted and "closed" for reversal.

If a remittance is deleted with option 4 = 'Delete' in (ARS350), the payments of the included invoices are automatically reversed. For remittances for SEPA direct debiting the customer invoices should remain paid, even if the remittance is deleted in (ARS350).

To delete remittances for SEPA direct debiting in (ARS350), the user uses function key 'F17' in (ARS350/B) to get to (ARS350/S) where a selection of remittances is made. When the user has made the selection in (ARS350/S) and press Enter, the selected remittances are listed in (ARS350/B). When working with selection, related option 20 = 'Delete remittance proposal' and two buttons 'End the selection' and 'Delete all selected' are available.

Options 4 = 'Delete' and 9 = 'Reconcile' are not available when working with the selection in (ARS350/B).

If the user presses the button 'End the selection', the selection will be cleared and all remittances will once again be listed in (ARS350/B). After this, option 20 and buttons 'End the selection' and 'Delete all selected' will no longer be available.

If the user selects one (or a few) remittances in the list and uses option 20, the selected remittance(s) will be deleted one by one.

If the user presses the button 'Delete all selected', all remittances in the list will be deleted, in batches of 33 records. If the selection made in (ARS350/S) has resulted in a list of more than 33 remittances in (ARS350/B), the user needs to do the following:

  1. Press 'Delete all selected'.

  2. Refresh the screen.

  3. Press 'Delete all selected' again.

    Steps 2 and 3 are repeated until all the selected remittances listed in ARS350/B have been deleted.

    Note: This functionality for selection and deletion of remittances in (ARS350) is only available for SEPA direct debiting. When the selection is made via F17 and (ARS350/S), these are the conditions for a remittance to be selected:
    1. The remittance concerns a payment type connected to payment class 5 (direct debiting) and defined for SEPA direct debiting in 'Payment Type. Open' (CRS078).

    2. The remittance is in status 09, indicating that the remittance proposal has been confirmed in (ARS300).

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