Checking bank credit

Bank credit is the facility provided by a bank, which allows you to make payments even if the payment amount exceeds the available bank balance amount. The maximum amount of credit allowed to make payments is called credit limit.

You must select an appropriate bank in the Bank Relations (tfcmg0510m000) session, and verify the availability of the bank balance. The balance amount includes the credit limit provided by the bank.

In the Credit Limit Check field of the Bank Relation (tfcmg0110s000) session, you must select one of these actions:

  • No Check
  • Warn User
  • Block User

If the status is other than No Check, LN displays the following warning messages during the payment process:

  • Insufficient balance in bank, credit limit being utilized
    The Credit Limit Check field is set to Warn User and the payment amount exceeds the bank balance. The payment process is continued by utilizing the credit limit amount.
  • Sufficient balance is not available in bank
    The Credit Limit Check field is set to Block User and the payment amount exceeds the Bank Balance with Credit. The payment process is cancelled.

You can select bank relations and verify the bank balance including the credit limit during these processes:

  • Automatic payment
  • Anticipated payment
  • Cash or bank transactions

Automatic payments

In the automatic payment process, LN selects the bank relations in the Bank Relations (tfcmg0510m000) session in the following order of preference:

  • The bank relation you define in Payment Advice Lines (tfcmg1101m000) session.
  • The bank relation selected in the Assign Banks to Payments (tfcmg1250m000) session.
  • The bank relation that results from the bank distribution process. For details, refer to Assigning bank relations.
  • The bank relation defined for the pay-to business partner.
  • If several bank relations are found, LN selects the bank relation that has the highest priority in the Bank Relations (tfcmg0510m000) session.
  • The bank relations assigned to the payment batch in the Audit Payments (tfcmg1255m000) session.
Note

If no bank is found, LN automatically starts the Assign Banks to Payments (Manually) (tfcmg1251m000) or the Assign Banks to Direct Debits Manually (tfcmg4251s000) session, and you must select the bank relation manually.

For payments of trade notes, in the Process Trade Notes Payable (tfcmg1226m000) or the Selected Trade Notes Payable for Processing (tfcmg1526m000) session, when the status is changed to Paid, the bank relation is selected.

Anticipated payments/receipts

In the anticipated payment process, the following fields are updated in the Bank Relation (tfcmg0110s000) session:

  • The Bank Balance with Credit field is verified, when LN selects the bank relation in the Anticipated Payments (tfcmg2110s000) session.
  • The Anticipated Payments Amount field is updated, when the document status changes from Document Received to Document Accepted/Sent in the Anticipated Payments (Details) (tfcmg2116s000) or the Anticipated Payment Status (tfcmg2512m000) session.
  • Similarly, the Anticipated Receipts Amount field is updated, if the document status changes from Document Sent to Customer to Document Accepted by Cust in the Anticipated Receipts (Details) (tfcmg2117s000) or the Anticipated Receipt Status (tfcmg2513m000) session.
  • The Bank Balance field is updated, when the payment or receipts documents are reconciled in the Post Bank Statements (tfcmg5210m100) session.

Bank transactions

During the payment process, the Bank Balance field in the Bank Relation (tfcmg0110s000) session is updated when the following transactions are processed in the Bank Transactions (tfcmg2500m000) session:

  • The advance payments
  • The unallocated payment
  • The payment transactions for purchase invoices

During the receipts process, the Bank Balance field in the Bank Relation (tfcmg0110s000) session is updated when the following transactions are processed in the Bank Transactions (tfcmg2500m000) session:

  • The advance receipts
  • The unallocated receipt
  • The receipt transactions for sales invoices
Note

If the anticipated payment or anticipated receipt documents are rejected during the reconciliation process, the same amount must be reduced in the Bank Relation (tfcmg0110s000) session.

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