Managing Direct Debiting Agreements

This document explains how you use agreements to enable direct debiting in accounts receivable.

Outcome

  • Direct debiting agreements are established, registered, and received by the bank.
  • All actions related to the electronic transfer of agreements to bank in 'Direct Debiting Agreement Transfer. Open' (ARS460) and its subprograms are logged. The log is displayed by selecting option 11 (Display transfer log) for an agreement in (ARS450). All actions are then displayed by date in 'Direct Debiting Agreement. Display Transfer Log' (ARS452). If a direct debiting agreement has been deleted, its transfer log is also deleted.

You can start creating customer invoices with a payment method for direct debiting and then remitting them to the bank in 'Bank Remittance. Open' (ARS300).

The agreement status is changed in 'Direct Debiting Agreement. Open' (ARS450). The action code is changed for the agreement in (ARS452). For updates of tables, see the Program Flowchart section below.

Before Starting

  • The starting conditions listed in Managing Direct Debiting in Accounts Receivable must be met.
  • Indicators with company-defined fields for direct debiting agreements are defined in 'Direct Debiting Agreement Indicator. Open' (ARS455).
  • Payment methods for direct debiting must be created in 'AR Payment Method. Open' (CRS076).
  • Number series 82/1 must be defined in 'Number Series. Open' (CRS165). This represents the numeric ID of a proposal for transfer of direct debiting agreements to bank in (ARS460). The number is also displayed in the log file for agreements in (ARS452).
  • Number series 82/2 must be defined in (CRS165). This represents the numeric ID of a transfer to bank in which the direct debiting agreement is included. The number is displayed in the log file for agreements in (ARS452).
  • If direct debiting agreements will be sent electronically to the bank, there must be an agreement between the company and the bank regulating this type of transfer.
  • Country-specific electronic formats must be defined for both the transfer of agreements (using API program ARS460MI) and the bank confirmation (using API program ARS450MI) in 'Bank Format. Open' (CRS695).
  • Before you use the functionality for electronic transfer of agreements to bank, you must download document 505 by pressing F14 in 'Document. Open' (CRS928). The standard document must then be defined in 'Standard Document. Open' (CRS027): Document category = 5 (Finance) and Program = ARS462. Combinations of company bank account and agreement indicators that trigger different output must be defined in 'Standard Document. Connect Media Control Object' (CRS945) and then connected to media in the subprogram 'Document Media Control Object. Connect Media' (CRS949). Refer to the technical documentation for Infor Enterprise Collaborator.
  • Payers must be registered in 'Customer. Open' (CRS610).
  • Bank accounts involved must be registered in 'Bank Account. Open' (CRS692).

Workflow

Outline

  1. Enter into Agreement with Customer

    You and your customer agree to use direct debiting as the payment method and confirm this in writing.

  2. Register Agreement

    Register the agreement in 'Direct Debiting Agreement. Open' (ARS450) for each division. If several divisions have a customer in common that has direct debiting as the payment method, a separate agreement must be registered in each division.

    The agreement states the bank accounts involved, the validity period of the agreement, and whether there are any amount limitations. The agreement indicator selected for the direct debiting agreement determines how the agreement will be sent to the bank: in paper form or in the form of an electronic file. It also determines whether the transferred agreement will be confirmed electronically by the bank. Any company-defined fields defined for the indicator are displayed as open fields as an integrated part of the agreement in (ARS450).

    When all details concerning the agreement are settled, assign status Preliminary to the agreement.

    Finally, include the customer in the routine by selecting a payment method for direct debiting to the customer in 'Customer. Open' (CRS610).

    Note: You can use ranges of company bank accounts, statuses, and validity dates as search criteria to display specific agreements by pressing F17 in (ARS450).
    Note: A customer bank account or company bank account that is connected to an agreement cannot be changed or deleted in 'Bank Account. Open' (CRS692). You can check which agreements a customer bank account is connected to by selecting option 13 (Direct debiting agreements) in (CRS692/B).

  3. Print Agreement Statement and Send to Bank (Manual Workflow)

    Print the statement of the agreement and send it to your bank, thereby authorizing the bank to execute the transfers. Manually change the status of the agreement to 20 in (ARS450).

    This step is suitable for remitting single agreements.

  4. Create Proposal for Electronic Transfer (Automated Workflow)

    To manage larger amounts of agreements, create a proposal containing the agreements to transfer to the bank in 'Direct Debiting Agreement Transfer. Open' (ARS460). You can use any of the following selection criteria to include the relevant agreements: Only agreements with status 10 (Preliminary) or 90 (Blocked or expired) or both, customers, customer bank accounts, changed by and change date, and the company's bank accounts.

    Once the proposal is created, review the results, either online in subprogram 'Direct Debiting Agreement Transfer. Change' (ARS463) or as a printed report (ARS462PF). In (ARS463/B) you can manually add agreements, or block or remove any agreements not to include in the final transfer.

    All agreements included in the proposal automatically receive status 1 (Included in transfer proposal) in (ARS450) and are blocked from being included in another proposal.

    You can always reprint the report or retransfer it to the bank in (ARS460).

  5. Approve Proposal

    When you approve the proposal by selecting option 9 in (ARS460), the results are an updated printed report (ARS462PF), used for internal purposes only, and an electronic file based on API program ARS460MI, depending on the agreement indicator connected to the respective agreement. Send the file to the bank.

    An agreement included in an approved proposal automatically receives status 1 (Included in a transfer proposal and pending transfer) or 2 (Transferred to the bank and pending confirmation) in (ARS450), depending on the agreement indicator.

    If necessary, you can re-create the specification or file by selecting option 8 in (ARS460).

    Regarding the logging of activities related to the electronic transfer, see the Outcome section.

  6. Record Bank's Confirmation

    Depending on your agreement with the bank, you may receive a confirmation from the bank that the agreements are approved or canceled. If the confirmation is received electronically, API program ARS450MI updates the data in the master table for direct debiting agreements, FDDAGR. The confirmation changes the status for the agreement in the FDDAGR table, which in turn changes the status of the agreement in (ARS450):

    Response from the Bank Action Code in (ARS452) Status in (ARS450)
    Agreement is approved by the bank. 50 20 (Approved)
    Agreement is not approved by the bank. 60 10 (Preliminary)
    Agreement is canceled by the bank. 70 99 (Canceled or expired)

Program Flowchart

The model below illustrates the programs and tables involved in creating the transfer proposal:

Tables

  • FDDAGH: Table that stores header information for the transfer of direct debiting agreements
  • FDDAGD: Table that stores line information for the transfer
  • FDDAGR: Master table for direct debiting agreements
  • FDDAGL: Table that stores log information related to the transfer

Programs

  • 'Direct Debiting Agreement Transfer. Open' (ARS460): The menu program for creating, editing, and approving transfer proposals.
  • ARS461: A functional program that creates the transfer proposal in the background when you press Enter to confirm your selection criteria in (ARS460/E)
  • 'Direct Debiting Agreement Transfer. Print' (ARS462): Prints the proposal
  • 'Direct Debiting Agreement Transfer. Change' (ARS463): Displays the agreements included in the proposal
  • 'Direct Debiting Agreement Transfer. Update' (ARS464): Updates the action code in (ARS452), the agreement status in (ARS450), and the transfer log
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