Create Payment Type

This document explains how you create a payment type. A payment type is a user-defined subcategory of a specific payment class.


A variance of a payment class is defined for a specific type of payment. In its basic form it consists of a name and the payment class to which it is connected. The payment types can be reviewed in 'Payment Type. Open' (CRS078).

Use the payment types for these purposes:

Accounts Receivable

Accounts Payable

The parameter file (CSYTAB) is updated.

Before you start

Parameters to Set

Used for Payment Class Field The field indicates …
0–6 Payment class … a predefined, overall category of payments.
1, 2, 4 Remittance method

… the remittance method used for checks and bills of exchange (drafts).

Valid Alternatives – Checks

0 = Remittance to bank is not used

1 = Checks are remitted to bank to be cashed.

Valid Alternatives – Bills of Exchange

1 = Collection on the due date

2 = Discounted before the due date

3 = Both 1 and 2 are valid.

1, 2 Postdated check

... whether the payment type is reserved for postdated checks.

A postdated check is basically a check with a due date. The check is entered preliminarily in 'Payment Document. Enter' (ARS105) or 'Payment Received. Record' (ARS110). However, the account entries are not created until you update the proposal for account entry generation in around due date in 'Postdated Check. Create Account Entries' (ARS320). This is based on the FAM function used for entering the check.

Note that the 'Calculation of accounting method for postdated check' field for the payment method to which the payment type is connected controls the accounting date to be set when the proposal is updated.

After this, the check is processed as a regular check.

1, 2 Cancel customer risk

... when the customer risk for postdated checks in the AR balance file is cancelled.

Valid Alternatives

0 = At bank remittance

1 = At preliminary entry of the checks in (ARS105) or (ARS110)

2 = When account entries are created in (ARS320).

5 Agreement type ... whether the direct debiting statement must be based on a valid customer agreement registered in 'Direct Debiting Agreement. Open' (ARS450).
5 Electronic confirmation

... whether account entries are created when confirming the bank remittance containing direct debiting payments in (ARS300).

If you do not select the check box, the following happens:

– The customer invoices are recorded as paid, with the offsetting account entry based on accounting rule AR75–193 (Direct debiting - remitted).

– The bank remittance receives status 9 (Confirmed) in (ARS300).

– The bank remittance can be reconciled in (ARS350).

– When reconciling the bank remittance in (ARS350), the bank account is debited and offset by an account entry based on accounting rule AR75–193. The bank remittance then receives status 11 (Reconciled) in (ARS350).

If you select the check box, the following happens:

– You are asked to confirm the confirmation of the bank remittance.

– The bank remittance receives status 11='Reconciled in (ARS350)'. Thus, the bank remittance is not available for reconciliation in (ARS350).

– No account entries are created when confirming the bank remittance. However, all invoices included in the bank remittance receives block code 9 (field RMBL), as displayed in (ARS201). Consequently, they are blocked from being included in another bank remittance proposal.

– Records are created in the FDDREM table if the bank remittance is sent as a bank file via EDI. (The table is not used if M3 e-Collaborator is used instead.)

– The bank file is sent to the bank via M3 e-Collaborator (if used).

– The payment records are received via M3 e-Collaborator or another tool in the form of a bank file. The bank file is downloaded into (ARS040) or (ABS100).

– When the payment records are approved in one of these two programs, the customer invoices are recorded as paid and the bank account is debited.

6 Factoring company

... the external factoring company to which the company's customer invoices are sold.

To enable factoring, the payment type must be included in a payment method that is connected to the affected customers in 'Customer. Open' (CRS610).

6 Fixed factoring charge

... the amount that the factoring company charges for each remitted invoice. The amount is entered in local currency and is automatically converted to the invoice currency at remittance.

The charge is displayed per invoice in the remittance proposal created in 'Bank Remittance. Open' (ARS300). When the final remittance statement is created, the charge is posted according to accounting rule AR75-192.

The remitted amount minus the charges is displayed in (ARS350) when reconciling the payments.

Note that even though it is technically possible to enter a remittance charge both as an amount and as a percentage, this is seldom recommended. In such a case both values would be used to calculate the charges.

6 Factoring charge in percent ... the percentage of the invoice amount of each remitted customer invoice that the factoring company charges.

Follow these steps

  1. Start 'Payment Type. Open' (CRS078).

  2. Enter a two-position alphanumeric ID for the type. Click New.

  3. On the E-panel, enter the relevant values according to the table above. Press Enter.

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