Payment process

Depending on the parameter settings in the CMG Parameters (tfcmg0100s000) session, only authorized users can select invoices for payment and process a payment batch in Cash Management.

For details, refer to Payment authorization in Cash Management – setup.

In the CMG Parameters (tfcmg0100s000) session, you can indicate whether authorized users must approve a payment batch for processing. If you select the Payment Batch Approval and the Direct Debit Batch Approval check boxes, only authorized users can process a payment batch. In the Payment Authorizations (tfcmg1100m000) session, you can define authorized users.

You can use the following automatic payment processes:

  • The automatic payment procedure
    After selection of the invoices, you can verify the results and make adjustments. For example, you can review and change the selected invoices, and you can assign advance payments, unallocated payments, or credit notes to the open entries before you make the payments.
  • The uninterrupted payment process
    After selection of the invoices, LN carries out the payment process as an uninterrupted payment run. This enables you to run the payment process as a batch job at night. This process does not search for advance and unallocated payments, or credit notes. For details, refer to Automatic or uninterrupted payment process.
Search for advance and unallocated payments and credit notes

If you select open entries for payment, LN searches for advance and unallocated payments or credit notes, that you can apply to the open entry. LN displays a warning or generates a report of the business partners for which such documents exist. You can display the available advance payments, unallocated payments, or credit notes for the business partner and assign them to the open entries.

Multi financial company payment

In a multi financial company structure, LN searches all the financial companies of the group company.

In the CMG Parameters (tfcmg0100s000) session, you must set these parameters:

  • Payments by Company Group
    If this check box is selected, the group company will make all the payments on behalf of the individual company.

    Example

    • Company A, B, and C belong to a group company D.
    • If this check box is cleared, payments can be created, either separately for company A, B, and C, or for company D.
    • If this check box is selected, payments can be made only by the group company D on behalf of company A, B, and C.
    • Group companies are defined in the Company Parameters (tfgld0503m000) session.
  • Multi-Company Selection of Invoices for Payment

    If this parameter is set to Select Invoices or Both, you can select invoices from other companies for payment, provided for the other company the following parameters are set as below:

    • The Payments by Company Group check box is cleared.
    • The Multi-Company Selection of Invoices for Payment parameter is set set to Own Invoices Selectable or Both.
The automatic payment procedure

To run the automatic payment procedure, use this sequence of sessions:

  • Standing Orders (tfcmg1510m000)
    For payments for which no purchase invoice is available, you can create standing orders. For details, refer to Standing orders
  • Select Invoices for Payment (tfcmg1220m000)

    Use this session to select the invoices which are due for payment in the open entries of the Accounts Payable module, as well as standing orders

    LN selects the purchase invoices and cost invoices for which these conditions are fulfilled:

    • The invoice is approved.
    • The Approved for Payment status is Yes or Not Applicable.
    • No hold reason is linked to the invoice.

    If you select the Select Non Approved Invoices for Payment check box in the CMG Parameters (tfcmg0100s000) session, unapproved invoices can also be selected. Other parameters selected in the CMG Parameters (tfcmg0100s000) can also have an effect on the invoice selection.

    LN searches for unassigned advance and unallocated payments and credit notes for the business partners, and automatically generates a report of the business partners for which such documents exist. Before you continue the payment process, you can assing the payments and credit notes to the open entries.

    Based on several selection criteria, a pro-forma payment batch is created which is processed for payment. You can settle sales invoices and credit notes with purchase invoices.

  • Payment Advice (tfcmg1609m000)

    Review the selection of purchase invoices and standing orders, and make the necessary adjustments.

    For example, you can make these changes:

    • Change the bank details, or the payment method.
    • Add a payment to the batch.
    • Delete individual payments.
    • Delete the complete payment batch.

    If unassigned advance and unallocated payments or credit notes exist for the business partner of the invoice, LN displays a warning. On the appropriate menu, you can click BP Open Entries to display the available documents.

  • Apply Payment Agreement (tfcmg1230m000)

    If you use payment agreements, you must apply the payment agreements before you can process the payment batch. For details, refer to Using payment agreements.

  • Process Payments (tfcmg1240m000)

    Use this session to combine payments into a batch according to the values set up in the CMG Parameters (tfcmg0100s000) session. LN searches for a bank relation for each transaction as described in Assigning bank relations.

Related sessions

Depending on the values of the relevant parameters in the CMG Parameters (tfcmg0100s000) session, after you click Compose in the Process Payments (tfcmg1240m000) session, LN can start these sessions:

  • Batch Numbers for Payment Procedure (tfcmg1521m000) > Assign Banks to Payments (Manually) (tfcmg1251m000)
    If LN cannot automatically assign bank relations to the transactions, the Assign Banks to Payments (Manually) (tfcmg1251m000) or the Assign Banks to Direct Debits Manually (tfcmg4251s000) session starts automatically, and you must select a bank relation for the transaction.
  • Audit Payments (tfcmg1255m000)

    This session validates the payment batch. LN checks and validates this data:

    • Whether the payable amount exceeds the maximum amounts per pay-to business partner and for free payments for which you are authorized in the Payment Authorizations (tfcmg1100m000) session.
    • Whether all invoices have a valid payment method assigned
    • Whether invoices from subcontractor business partners are paid from a blocked account
    • The business partners bank account and address details
    • The financial business partner groups
    • The posting data of the intermediate steps defined for the payment methods
    • The posting data for stand-alone, and cost standing orders payments
    • The bank relation details
    • The business partner’s IBAN if, in the Payment/Receipt Methods (tfcmg0540m000) session, the IBAN Account Required check box is selected. Then the BIC of the business partner's bank will also be audited assuming, in the XML Payment/Receipt Layouts (tfcmg0524m000) session, the tag representing the BIC is set to mandatory and selected.

    LN prints a report of the detected errors. After you solve the problems, run the Process Payments (tfcmg1240m000) session.

    If the payable amount exceeds the maximum amounts for which you are authorized, you can make adjustments in the Payment Advice (tfcmg1609m000) session.

  • Print Remittance Letters (tfcmg1270m000)
    If remittance letters are required for the payment method, the Print Remittance Letters (tfcmg1270m000) session starts automatically. The remittance letter contains details about the invoices and the individual payments.