Customer direct debiting

Requirement

Direct debiting is a reversed customer payment process. The supplier is given the authority from the customer to withdraw the relevant amount from the customer’s bank account on the due date. The process follows this logic:

1. The invoice must show this text: ‘Do not pay this invoice – it will be paid according to direct debiting’.
2. Before the due date, the supplier asks the bank to withdraw the amount from the customer’s account on the due date. This operation is performed though an electronic message.
3. The supplier receives the cash through another electronic message from the bank in the ordinary cash receipts function.

M3 solution

When invoices become due for payment a direct debit collection is created. When the direct debit collection is confirmed, an electronic output file, to be sent to the bank, and remittance documents are created.

Confirmation is received from the bank and any failed collections can be deleted and communicated, using a standard letter, to the customer. Confirmed payments are reconciled.

Configuration guidelines

Program ID	Program name	Description or comment
ARS050	Payment Received. Open Standard Letter	To inform customers of failed collections, create a standard letter of type 1.
ARS300	Bank Remittance. Open	Create a proposal. To create the output file, confirm the proposal.
ARS350	Bank Remittance. Reconcile Payment	Delete failed collections and send a standard letter. Reconcile the payment when it is correct and complete.