Remitting Customer Invoices for Direct Debiting or Factoring

Outcome

Customer invoices are remitted to the bank or to a factoring company. Direct debit invoices can also have been sent as an electronic file.

The following lists are printed:

• Bank remittance statement (which can be sent to the customer)
• Bank remittance validation list (for the bank)
• Customer invoice journal (not for electronic direct debiting remittance)
• Accounting journal (not for electronic direct debiting remittance).

The invoices are closed. (The only exception is for electronic direct debiting remittances, where the invoices are still open but are assigned status 15.) Invoices sent for factoring are assigned status 20=Remitted.

How you update accounts receivable depends on whether the remitting and the payment reporting from the bank/factoring company is done electronically or manually based on printed documents. Refer to Reconciling Customer Payments through Direct Debiting and Factoring.

The remittance files (FARREM), (FARRED) and (FARREX) are updated. Invoices are blocked from being included in another remittance.

The selection of invoices is saved with information category no. 210 (Remittance no.). Invoices remitted for direct debiting are also saved with information category no. 223 (Agreement no.) and invoices sent for factoring with no. 230 (Factoring). They can be reviewed in 'Accounts Receivable. Display Additional Information' (ARS250).

Direct Debiting

For manual remittance, the following account entries are created if you left the 'Electronic confirmation' check box unselected when confirming the remittance in (ARS300/E):

Accounting Rules	Account	Debit	Credit
*	Customer		x
AR75 – 193	Direct debiting remitted	x
AR75 – 310	Cash discount	x

*Account entry based on the customer invoice.

For a detailed description of the results of selecting or not selecting the 'Electronic confirmation' check box, see Create Payment Type.

Factoring

The following basic account entries are created:

Accounting Rules	Account	Debit	Credit
*	Customer		x
AR75 – 194	Factoring remitted	x
AR75 – 192	Factoring charge (per invoice)	x

*Account entry based on the customer invoice.

Before you start

• The following accounting types must be defined for accounting event AR75 (Bank remittance) in 'Accounting Rule. Set' (CRS395):
  • 192 (Factoring charge);
  • 193 (Direct debiting remitted);
  • 194 (Factoring remitted);
  • 310 (Cash discount).
• Number series type 81, number series 0, must be defined for bank remittances in 'Number Series. Open' (CRS165).
• Specific Starting Conditions for Direct Debiting
  • At least one payment method for direct debiting must be defined in 'AR Payment Method. Open' (CRS076). This payment method controls which day should be used as payment date and whether there must be an agreement for the customer registered in 'Direct Debiting Agreement. Open' (ARS450). If an agreement is required, the activity described in Managing Direct Debiting Agreements must be carried out before the first remittance.
  • If the remittance selection is to be based on customer/payer level, the payment method must be connected to the customer in 'Customer. Open' (CRS610).
  • The payment method used for direct debiting must be connected to the customer's bank account in 'Bank Account. Open' (CRS692/F). This payment method is used to identify the direct debiting agreement automatically by comparing it to the invoice's payment method.
• Specific Starting Conditions for Factoring

  The activity described in Preparing for Factoring must be carried out.

Follow These Steps

1. Create Bank Remittance Proposal

   Select the invoices to remit in 'Bank Remittance. Open' (ARS300) and verify that the proposal created is correct.

2. Adjust and Confirm Proposal

   You can change the proposal in several ways: Remove invoices from being remitted; define partial payments of invoice amounts; add or adjust any cash discount. If you need to change any other invoice values in 'Accounts Receivable. Display' (ARS200), you must delete the proposal and then create a new one. When the proposal is correct, confirm it to create the final remittance.

3. Send Remittance to Bank/Factoring Company

   Send the printed documents or the file to the bank or the factoring company, depending on the type of remittance.

   • For Manual remittance

     The invoices are closed. Invoices sent for factoring are assigned status 20=Remitted.

   • For Electronic Direct debiting Remittance

     The invoices are still open but are assigned status 15.