Managing Direct Debiting Agreements

This document explains how you use agreements to enable direct debiting in accounts receivable.

Outcome

You can start creating customer invoices with a payment method for direct debiting and then remitting them to the bank in 'Bank Remittance. Open' (ARS300).

The agreement status is changed in 'Direct Debiting Agreement. Open' (ARS450). The action code is changed for the agreement in (ARS452). For updates of tables, see the Program Flowchart section below.

Before Starting

Workflow

Outline
  1. Enter into Agreement with Customer

    You and your customer agree to use direct debiting as the payment method and confirm this in writing.

  2. Register Agreement

    Register the agreement in 'Direct Debiting Agreement. Open' (ARS450) for each division. If several divisions have a customer in common that has direct debiting as the payment method, a separate agreement must be registered in each division.

    The agreement states the bank accounts involved, the validity period of the agreement, and whether there are any amount limitations. The agreement indicator selected for the direct debiting agreement determines how the agreement will be sent to the bank: in paper form or in the form of an electronic file. It also determines whether the transferred agreement will be confirmed electronically by the bank. Any company-defined fields defined for the indicator are displayed as open fields as an integrated part of the agreement in (ARS450).

    When all details concerning the agreement are settled, assign status Preliminary to the agreement.

    Finally, include the customer in the routine by selecting a payment method for direct debiting to the customer in 'Customer. Open' (CRS610).

    Note: You can use ranges of company bank accounts, statuses, and validity dates as search criteria to display specific agreements by pressing F17 in (ARS450).
    Note: A customer bank account or company bank account that is connected to an agreement cannot be changed or deleted in 'Bank Account. Open' (CRS692). You can check which agreements a customer bank account is connected to by selecting option 13 (Direct debiting agreements) in (CRS692/B).
  3. Print Agreement Statement and Send to Bank (Manual Workflow)

    Print the statement of the agreement and send it to your bank, thereby authorizing the bank to execute the transfers. Manually change the status of the agreement to 20 in (ARS450).

    This step is suitable for remitting single agreements.

  4. Create Proposal for Electronic Transfer (Automated Workflow)

    To manage larger amounts of agreements, create a proposal containing the agreements to transfer to the bank in 'Direct Debiting Agreement Transfer. Open' (ARS460). You can use any of the following selection criteria to include the relevant agreements: Only agreements with status 10 (Preliminary) or 90 (Blocked or expired) or both, customers, customer bank accounts, changed by and change date, and the company's bank accounts.

    Once the proposal is created, review the results, either online in subprogram 'Direct Debiting Agreement Transfer. Change' (ARS463) or as a printed report (ARS462PF). In (ARS463/B) you can manually add agreements, or block or remove any agreements not to include in the final transfer.

    All agreements included in the proposal automatically receive status 1 (Included in transfer proposal) in (ARS450) and are blocked from being included in another proposal.

    You can always reprint the report or retransfer it to the bank in (ARS460).

  5. Approve Proposal

    When you approve the proposal by selecting option 9 in (ARS460), the results are an updated printed report (ARS462PF), used for internal purposes only, and an electronic file based on API program ARS460MI, depending on the agreement indicator connected to the respective agreement. Send the file to the bank.

    An agreement included in an approved proposal automatically receives status 1 (Included in a transfer proposal and pending transfer) or 2 (Transferred to the bank and pending confirmation) in (ARS450), depending on the agreement indicator.

    If necessary, you can re-create the specification or file by selecting option 8 in (ARS460).

    Regarding the logging of activities related to the electronic transfer, see the Outcome section.

  6. Record Bank's Confirmation

    Depending on your agreement with the bank, you may receive a confirmation from the bank that the agreements are approved or canceled. If the confirmation is received electronically, API program ARS450MI updates the data in the master table for direct debiting agreements, FDDAGR. The confirmation changes the status for the agreement in the FDDAGR table, which in turn changes the status of the agreement in (ARS450):

    Response from the Bank Action Code in (ARS452) Status in (ARS450)
    Agreement is approved by the bank. 50 20 (Approved)
    Agreement is not approved by the bank. 60 10 (Preliminary)
    Agreement is canceled by the bank. 70 99 (Canceled or expired)

Program Flowchart

The model below illustrates the programs and tables involved in creating the transfer proposal:

Tables

Programs

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