Standing orders

You can create standing orders for payments not linked to a purchase invoice, such as cost transactions or advance payments. For example, you can use a standing order to pay rent or vehicle leasing costs every period, without receiving an invoice or if you receive the invoice after the payment due date.

You can create these types of standing orders:

  • Standing orders for a single payment
  • Standing orders for recurring payments. You can distribute the total standing order amount across a number of periods or you can define a standing order payment schedule.
Note

A standing order for a single payment is similar to a stand-alone payment, which you can create in the Payment Advice (tfcmg1609m000) session.

Standing orders are created and processed in Cash Management. If you want to create an open entry for the periodic payment in Accounts Payable, you must create a recurring purchase invoice rather than a standing order.

Posting data of standing orders

The posting method of a standing order can be Advance Payment or Costs. For advance payments, LN derives the ledger accounts and dimensions from the financial business partner group of the invoice-from business partner.

LN determines the ledger account from the financial business partner group based on the advance payment category. To allow advance payment category, you must select the Allow Advance Payment Category check box in the CMG Parameters (tfcmg0100s000) session. In Germany, you must legally make distinction between advance payments made under these categories. You can select the advance payment category in the Standing Orders (tfcmg1510m000) and Payment Advice Lines (tfcmg1101m000) sessions.

If you manually create a standing order for costs, you must supply the posting data such as the ledger account and dimensions, the cash flow reason, and the tax code and tax country.

For generated standing orders of the Costs type, for example, to pay tax, LN derives the ledger accounts and dimensions from the setup details.

Creating a standing order

To manually create a standing order:

  1. Create the standing order

    In the Standing Orders (tfcmg1510m000) session, create a standing order for a specific invoice-from business partner.

    For a single-payment standing order, select the Single Payment check box. In the Posting Method field, select the type of transaction, which can be Advance Payment or Costs.

  2. Set up installments

    If you do not select the Single Payment check box, you must define or generate a payment schedule for the payments. On the appropriate menu, click one of the following commands:

    • Automatic Distribution Standing Orders
      The Automatic Distribution of Standing Orders (tfcmg1112m000) session starts. Use this session to automatically distribute the total standing order amount over a number of periods.
    • Standing Order Payment Schedule
      The Standing Order Payment Schedule (tfcmg1511m000) session starts. Use this session to define a payment schedule for the standing order.
  3. Supply the posting data

    For standing orders of the Costs type, you must use this session to supply the posting data in the Posting Data of Standing Orders/Stand-Alone Pmt (tfcmg1115s000) session.

    You can start this session as follows:

    • For single-payment standing orders
      Save the standing order details and in the Standing Orders (tfcmg1510m000) overview session, select the standing order. On the appropriate menu, click Maintain Posting Data.
    • For standing orders with a payment schedule
      In the Standing Order Payment Schedule (tfcmg1511m000) session, select a schedule line and on the appropriate menu, click Posting data.

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