Register Supplier/Payee Information Required for Financial Management

This document explains how to configure a registered supplier or payee for tax management and accounts payable management.

Outcome

For each supplier or payee, the following data is specified, centrally and per division, where applicable:

This data can also be registered for the supplier/payee per division as a local exception.

The values entered become default when you create a purchase order (PO) in the Procurement component group and when you enter supplier invoices in accounts payable. Any values entered as local exceptions always overrule the values at the central level for the supplier.

The supplier table (CIDVEN) is updated.

Before you start

Follow these steps

  1. Select one of these alternatives:

    • To register data at central company level, start 'Supplier. Open' (CRS620/B) and/or 'Supplier. Define Purchase & Financial' (CRS624/B), either directly or by selecting option 13 in (CRS620).
    • To register division-specific data, start 'Supplier. Open/Division' (MFS620), which you access by selecting option 18 in (CRS620).
  2. Configure the supplier or payer based on the company routines and the available options listed above. Press F3 to exit.

Parameters to set

Program ID/Panel Field The field indicates …

Basic data

(CRS624/F) Payee

… the ID of the supplier to receive the payment.

A payee is entered only if the supplier and the payee are not the same legal entity.

(CRS624/F), (MFS620/E) Currency … the standard currency in which payments are to be made.
(CRS624/F) Exchange rate type

… the exchange rate to use when creating a purchase order (PO) in the Purchase Order Processing component group or when entering a supplier invoice in a currency other than that of the company division.

If a reference to a purchase agreement is connected to the PO, the exchange rate type of the agreement overrules the rate type selected in this field.

When a new supplier is registered, the exchange rate type defined in 'Settings – Purchase' (CRS780) is proposed by default.

(CRS624/F), (MFS620/E) Payment method … the form in which payments are to be made: in cash, by check or draft (bill of exchange), manual or electronic bank transfer, letter of credit, or direct debiting.
(CRS624/E) Supplier's customer number

… the ID under which the supplier is registered in 'Customer. Open' (CRS610).

This value is entered if the supplier is also a customer, which enables you to net customer invoices to supplier invoices.

See Perform Netting of Customer Payment Difference against Supplier Invoice.

Calculation of payment amount

(CRS624/F), (MFS620/E) Payment terms

… a set of rules for automatic calculation of due date.

See Define Payment Terms

(CRS624/F), (MFS620/E) Cash discount terms … a set of rules for automatic calculation of the discount the company will receive if payment is made within a specified number of days from the invoice date.

Invoice and payment management

(CRS624/E) Authorized user

… the person who normally authorizes invoices from this supplier.

See Simplify Routines for Authorization of Supplier Invoices.

(CRS624/F), (MFS620/E) Invoice accounting template

… a template with recurring invoice records and accounting strings proposed at invoice entry in 'Supplier Invoice. Open' (APS100).

See Create Invoice Accounting Template.

(CRS624/F), (MFS620/E) Payment priority

… a code indicating the payment priority of the supplier.

Alternatives

A–8 = Priorities A–8, where A is the highest priority

9 = Payments stopped for the supplier

This priority is used as selection criteria when selecting invoices to pay based on payment proposals in 'Supplier Payment Proposal. Open' (APS130).

(CRS624/F), (MFS620/E) Tolerance – payment

… how many days after the due date an invoice may be paid without incurring extra charges.

For more information on tolerance days:

See Using Payment Proposals to Create Supplier Payments.

(CRS624/F), (MFS620/E) Self-billing permitted

… whether self-billing is permitted for the supplier.

If this check box is selected, you can select a purchase agreement connected to a self-billing agreement when you create a purchase order line.

The self-billing agreement is created in 'Purchase Agreement. Open for Self-Billing' (PPS112) and connected to a purchase agreement in 'Purchase Agreement. Open' (PPS100/E).

Invoice matching

(CRS624/F) Invoice approval condition 1

… whether you can enter the invoice as Invoiced/Goods not received when the invoice is matched to a purchase order in 'Supplier Invoice' Open' (APS100) or 'Supplier Invoice. Recode' (APS110).

Alternatives

0 = No

1 = Yes, for all items

2 = Yes, but only for non-inventory items

3 = Yes, but only for inventory items.

If alternative 1, 2 or 3 is selected and an invoice is received before the goods, you can select the PO line itself during invoice matching (normally you select the goods receipt instead). An invoice line of type 2 (Matched to PO line) is created.

When account entries are generated for this line type, the net amount of the invoice line is posted using accounting rules PP20–235 (item line) and PP20–236 (line charge).

The PP20–235 accounting is offset with an invoice line of type 4 (Matched to goods receipt line after invoice entry). This type of invoice line can be created in two ways:

1) Automatically created when goods receipt is reported in 'Purchase Order. Receive Goods' (PPS300), provided that alternative 1 or 2 is selected in the 'Automatic invoice approval code' field (see below).

2) Manually with option 19 in 'Supplier Invoice. Match GR Line' (APS360).

The balance of the account entries based on these accounting rules can be printed in 'Supplier Invoice. Print Invoiced/Not Received' (APS585).

(CRS624/F) Invoice approval condition 2

… the value against which the invoice quantity is to be checked during automatic invoice check.

Alternatives

0 = The received quantity

1 = The put-away quantity

2 = Same as alt 1, but the default quantity in (APS360/B) is the put-away quantity.

The invoice check is performed in the following situations:

a) The user presses function key F8 in (APS360)

b) The goods arrive after the invoice, provided that alternative 1 or 2 is selected in the 'Automatic invoice approval code' field (see below)

c) The user runs 'Supplier Invoice. Auto Match GR Line' (APS375)

d) Accounts payable is updated from 'Supplier Invoice. Process Automatic' (APS050), provided that the 'Invoice matching' check box is selected in (APS050/E)

The invoice quantity can be approved manually in (APS360) with option 7 or function key F16.

(CRS624/F) Invoice approval condition 3

… whether you can create a debit note in the invoice matching routine.

Alternatives

0 = No

1 = Yes. The debit note number is retrieved from number series 68-1 in 'Number Series. Open' (CRS165)

2 = Yes. The debit note number is entered manually; the current invoice number is used as the default value

3 = Yes. The debit note number is entered manually; the current invoice number plus a suffix, DN001, is used as the default value

4 = Yes. The debit note number is entered manually. No default value is displayed

If you select alternative 1, 2, 3 or 4, you can create a debit note by selecting option 16 in the invoice matching programs (APS360) or (APS361). (APS360) is activated via 'Supplier Invoice. Record' (APS100) or 'Supplier Invoice. Recode' (APS110).

(CRS624/F) Automatic invoice approval code

… whether a goods receipt transaction is to be matched to an invoice line of type 2 (Invoiced/Goods not received) automatically.

Alternatives

0 = No

1 = Yes – retrieve the quantity from the goods receipt

2 = Yes – retrieve the quantity from the invoice line

This automatic match can be performed when the following starting conditions are met:

a) The invoice line has updated the general ledger (account entry status 4)

b) The invoice line is not allocated to any other goods receipt transaction

c) The invoice line belongs to the same division as the purchase order

d) The invoice line is not fully matched; that is, the invoice matching status is 9 in (APS360/E).

If these conditions are met and you select alternative 1 or 2 above, an invoice line of type 4 (goods received after invoice) is automatically created when the account entries for goods receipt are generated.

Comments

If you select alternative 0=No, you can manually match the goods receipt to an invoice line of type 2 in (APS360/B) using option 19.

If you select alternative 1=Yes, the goods receipt quantity is used as the invoice quantity in the new type 4 invoice line.

If you select alternative 2=Yes, the quantity from the type 2 invoice line is used as the invoice quantity in the new type 4 invoice line.

Tax management

(CRS624/F), (MFS620/E) Tax applicable

… whether the customer or supplier is required to declare VAT or sales tax.

If you do not select this check box, no VAT or sales tax is calculated for that customer or supplier.

(CRS624/F) Tax withholding method

… indicates whether M3 Business Engine will calculate and book supplier tax withheld at the source when the company enters or pays invoices from certain suppliers.

Which alternatives are available depends on whether the calculation is based on standard service codes or on flexible service codes, as defined by field '260 Withholding tax using flexible service codes' on 'Settings - Accounts Payable' (APS905/F).

If the 260 field is set to 0, all tax withholding methods are available. The withholding tax is then based on the standard service code selected for the supplier in (CRS624/F). This one standard service code is automatically applied to the base amount, in this case the entire supplier invoice total (transaction code 40), VAT excluded. However, you can override this standard service code for tax withholding methods 1–3 by manually selecting a separate service code for the respective offsetting expense invoice line at invoice entry in 'Supplier Invoice. Record' (APS100) and 'Supplier Invoice. Process Automatic' (APS050) or at purchase matching in (APS360). In such a case, the base amount for the tax calculation is the total of the offsetting expense invoice lines that has a service code. Whether this base amount includes any VAT depends on the withholding method selected: withholding method 1 includes VAT in the base amount whereas withholding methods 2 and 3 excludes VAT. For tax withholding method 4, the company defines per service code in 'Supplier Service Code. Open' (CRS063) which amount to use as the base amount: the net amount, excluding any VAT, or the gross amount, with VAT included.

If the 260 field is set to 1 or 2, only tax withholding method 2 is available. M3 Business Engine then always, without exception, applies the flexible service codes connected to the respective supplier in 'Flexible Service Code. Connect to Suppl' (CRS664) instead. The base amount of the calculation is the invoice gross, net or VAT amount, before any payment deductions are made: cash discounts, user-made write-offs in 'Suppl Payment. Enter Manual' (APS120) or adjustments due to rounding or payment tolerances.

Alternative/s:

0 = No.

1 = No. However, M3 Business Engine automatically creates a record with the base amount in 'Supplier Tax Report. Display Invoices' (APS425) when the company records a supplier payment in (APS130) or 'Suppl Payment. Enter Manual' (APS120). No account entries for withholding tax are created. – This alternative is available for standard service codes only.

2 = Yes. M3 Business Engine automatically calculates and books the withholding tax when the company pays the supplier using (APS130) or 'Suppl Payment. Enter Manual' (APS120). A record with the withholding tax amount is automatically created in 'Supplier Tax Report. Display Invoices' (APS425). – This alternative is available both for standard service codes and flexible service codes.

3 = Yes. M3 Business Engine automatically calculates a record with the withholding tax in 'Supplier Tax Report. Display Invoices' (APS425) when the company enters a supplier invoice in 'Supplier Invoice. Record' (APS100). The withholding tax is not booked, though, until the supplier invoice is paid using (APS130) or 'Suppl Payment. Enter Manual' (APS120). At the same time, M3 Business Engine creates a record with the base amount in 'Supplier Tax Report. Display Invoices' (APS425). – This alternative is available for standard service codes only.

4 = Yes, M3 Business Engine automatically calculates and books the withholding tax when the company enters a supplier invoice in 'Supplier Invoice. Record' (APS100) or an on-account payment in 'Suppl Payment. Enter Manual' (APS120). A record with the withholding tax amount is automatically created in 'Supplier Tax Report. Display Invoices' (APS425). – This alternative is available for standard service codes only.

Withholding tax is automatically booked on a separate account. For supplier payments, M3 Business Engine uses accounting events AP20, AP30, AP31, AP32, AP33, and AP34 together with accounting type 396 to book the tax. When the company records supplier invoices from a supplier with tax withholding method 3 or 4, M3 Business Engine uses accounting rule AP10-396 to book the tax withheld.

Note: When the company records supplier invoices from a supplier with tax withholding method 3 and the invoice is posted to a clearing account in (APS100) or (APS050), no supplier tax transaction is created during invoice entry. Instead, you confirm or adjust the service code to use during recoding in 'Supplier Invoice. Recode' (APS110). If the invoice is matched to a purchase order or to goods receipt transactions, the service code is displayed for the accounting lines in 'Supplier Invoice. Match GR Line' APS360/E).

Withholding tax records are displayed in 'Supplier Tax Report. Display Invoices' (APS425) per service code and invoice. That is, if there are several accounting lines with the same accounting string but with different service codes for an invoice, separate records are created in 'Supplier Tax Report. Display Invoices' (APS425). The supplier tax proposals you create in 'Supplier Tax Report. Create Proposal' (APS430) are based on the records in 'Supplier Tax Report. Display Invoices' (APS425).

Note: In previous releases, the term 'reported amount' was used instead of the current 'base amount'.

For a description of the workflow, see Reporting Supplier Tax.

(CRS624/E) Activity code

… a user-defined code which is used for tax reporting purposes – in France, among other countries – is automatically included in the supplier tax reports created in 'Supplier Tax Report. Create Proposal' (APS430).

To ensure that all suppliers with a certain service code in 'Supplier. Define Purchase & Financial' (CRS624) have the same activity code, you can enter the activity code directly for that service code in 'Supplier Service Code. Open' (CRS063). If you do not define an activity code for the service code, the supplier can be connected to an optional activity code in 'Supplier. Define Purchase & Financial' (CRS624).

In France, activity code NP represents physical per-sons ("personnes physiques") whereas activity code RS represents companies ("entreprises and per-sonnes morales").

(CRS624/F) Tax withholding method

… indicates whether a tax amount is to be withheld as part of the company's supplier tax reporting routine when supplier invoices or payments are registered.

Alternatives

0 = No

1 = No. However, a record of the supplier payment amount is created in 'Supplier Tax Report. Display Invoices' (APS425) based on the service code selected for the accounting line when the supplier is paid in 'Supplier Payment Proposal. Open' (APS130) or 'Supplier Payment. Enter Manual' (APS120). The record contains the amount to report, in this case the net amount, that is, the invoice amount minus VAT before deduction of any cash discount. No withheld tax is recorded.

2 = Yes. A part of the supplier payment is withheld when you pay suppliers in (APS130) or (APS120), based on the service code selected for each accounting line. One record containing both the amount to report – the invoice amount minus any VAT – and the withheld tax amount is created in (APS425).

3 = Yes. A record with the withheld tax amount is first created in (APS425) when the supplier invoice is entered in 'Supplier Invoice. Record' (APS100) or 'Supplier Invoice. Process Automatic' (APS050), based on the service code selected for each accounting line. When the invoice is paid in (APS130) or (APS120), a separate record with the amount to report – the invoice amount minus any VAT – is created in (APS425).

With methods 2 and 3, the withheld tax is automatically posted to a separate account. For supplier payments, accounting events AP30, AP31, AP32, AP33, and AP34 are used with accounting type 396. When you record supplier invoices with method 3, accounting rule AP10-396 is used to post the amount to report.

If the invoice is posted to a clearing account in (APS100) or (APS050), no supplier tax transaction is created during invoice entry, even if tax-withholding method 3 is selected for the supplier. Instead, you confirm or adjust the service code to use during recoding in 'Supplier Invoice. Recode' (APS110).

If the invoice is matched to a purchase order or to goods receipt transactions, the service code is displayed for the accounting lines in 'Supplier Invoice. Match GR Line' APS360/E).

Supplier tax records are displayed in (APS425) per service code and invoice. That is, if there are several accounting lines with the same accounting string but with different service codes for an invoice, separate records are created in (APS425). The service code, which is defined in 'Service Code. Open' (CRS063), determines the percentage to apply for withholding tax.

The records in (APS425) are included when you create a supplier tax proposal in 'Supplier Tax Report. Create Proposal' (APS430).

For a description of the workflow:

See Reporting Supplier Tax.

(CRS624/E) Activity code

… an activity code used in French tax reporting.

The activity code for physical people (personnes physiques) is NP and for companies (enterprises et personnes morales) RS.

Activity codes are used as selection criteria when creating a tax report in 'Supplier Tax Report. Create Proposal' (APS430).

(CRS624/E) Tax ID for supplier … the tax registration number of the supplier/payee company.
(CRS620/E) VAT registration number

… the number used by companies within the EU to account for sales (trade) within the EU without VAT being charged.

EU regulations state that VAT must be charged when invoicing a customer within the EU if the customer's VAT registration number is not known; that is, it is up to the seller to verify the customer's (payer's) registration number to avoid charging VAT.

Since each member country within the EU has its own registration number series for this purpose, the entered registration number cannot be validated.

However, this number should always be seen with the country code as a prefix, which makes the identity unique. The country code prefix is retrieved from the country code of the division.

VAT registration numbers are entered for each customer, supplier and for companies based in an EU member country.

(CRS624/F), (MFS620/E) VAT code

… how VAT should be calculated and what rate to use.

See Create VAT Codes for VAT Transaction Entry and Reporting.

(CRS624/F), (MFS620/E) Service code

… which percentage to apply when you withhold tax as part of the company's routine for supplier tax reporting, if such reporting is required in your country.

For details about how service codes are used, see the description of the 'Tax withholding method' field.

Trade statistics

(CRS624/F), (MFS620/E) Trade code

… a code denoting a type of trade, used for reporting and statistics purposes.

See Define Basic Accounts Payable Settings.

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