Using payment agreements

Payment agreements

A way to define how invoice amounts must be paid. This includes the payment methods that apply to various parts of the invoice amount, and the payment currency.

For example, you can define a payment agreement to pay the first part of the invoice amount through the bank according to payment method PM1, 40 percent of the remaining amount, according to payment method PM2, and the other 60 percent according to payment method PM3, which can be a trade note payable.

Invoicing and payments in Japan

To set up paying your suppliers in accordance with Japanese business practice, you can set up payment agreements.

Payment agreements are often used if you receive a monthly billing invoice from your supplier.

To setup up payment agreements

To set up payment agreements, use the following sequence of sessions:

  1. Group Company Parameters (tfgld0101s000)
    Select the Payment Agreement check box.
  2. Payment Agreements (tcmcs2506m000)
    Define the payment agreements. Because multiple financial companies can share the payment agreements, you must define the amounts in the reference currency.
  3. Invoice-from Business Partner (tccom4122s000)
    If you have a payment agreement with a supplier, select the payment agreement. LN adds the payment agreement by default to purchase order lines for the business partner.
  4. Payment Agreement by Item and Invoice-from BP (tcmcs2108m000) (Optional)
    If you prefer, you can select specific payment agreements for combinations of invoice-from business partner and item or item group, or financial business partner group and item or item group.
  5. Priorities to Set Default Payment Agreement (tcmcs2109m000) (Optional)
    If you used the Payment Agreement by Item and Invoice-from BP (tcmcs2108m000) session, you can use this session to define the order of priorities that LN uses to determine the default payment agreement for a purchase order line.
Note

LN searches for the most specific payment agreement. If no specific payment agreement is found for the invoice-from business partner or business partner group and item or item group combination, LN uses the default payment agreement that you specified in the Invoice-from Business Partner (tccom4122s000) session.

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