How is the Payment Method Used

The payment method you select on a payment profile determines the type of payments, or payment collection, details produced by the payment run or payment collection run. The following payment methods are available:

Cheque Payment
Bank Payment
Single Payment
Undefined

The option you select for a payment profile depends on whether the profile applies to Payment Run (PYR) which is used to generate payments to suppliers, or Payment Collection Run (PYC) which is used to generate payment collection records for customer receipts.

Note: When you define a customer or supplier, you select the payment method to be used for the organization. A customer or supplier is only considered for payment by a payment run or payment collection run, if its payment method matches the payment method in the payment profile.

Cheque Payments

A payment method of cheque is typically used for supplier payment runs to produce printed payment documents to pay suppliers, for example cheques and/or remittance advices.

Note: You can set a Cheque Payment Limit in Ledger Setup (LES) and the system will display a warning if a payment by cheque is generated for more than this amount.

Printed payment documents like cheques and remittances are printed by Payment Documents (PYD), after the payment run has finished. SunSystems Financials includes several predefined cheque and remittance formats including separate cheques, separate remittances and a combined remittance/cheque.

A payment reference, for example cheque number, is assigned automatically to each payment. This number is retained as the transaction reference for the payment journal. The payment reference is assigned by a transaction reference defined using Transaction References Setup (TRS).

The payments, for example cheques, received from your customers are entered as receipts using Ledger Entry (LEN) and allocated to the outstanding transactions on the debtor/receivables or client account. You might use the cheque setting to produce a bill of exchange or similar document.

Bank Payments

A payment method of Bank is used where settlement is done by automated settlement systems, such as the UK system BACS (Bank Automated Clearing System). Therefore, it can be used in a payment profile for:

Payment Collection Run (PYC) to produce a file of customer receipt records, for example to collect customer payments by direct debit
Payment Run (PYR) to produce a file of supplier payment records, for example to pay supplier's by BACS.

The payments are made to the supplier's bank account, or collected from the customer's bank account. The bank account details are defined for the customer or supplier using Bank Details Setup (BNK). You can identify multiple banks for each supplier or customer using bank subcodes. This enables you to define any number of banks from which you can draw funds, or into which you can deposit funds.

If the bank details for the customer or supplier are missing, the setting for the Automated Bank Payments field in Ledger Setup (LES) determines whether or not the supplier or customer payment can proceed.

If a bank subcode is not entered in the payment profile and the payment method is Bank, the default bank subcode for the supplier or customer is used.

Use of the Bank payment method also requires a bank details record to exist in Bank Details Setup (BNK) for your own bank account. The relevant bank details code can either be entered on the payment profile, or during the payment or collection run.

When the Bank payment method is selected, a separate bank payments file is produced by Payment Run (PYR) or Payment Collection Run (PYC).

Single Payment

A payment of Single Payment option is used to produce a separate payment for each transaction that is selected for payment. This enables you to produce individual payments (or receipts) from a 'one-off' miscellaneous creditor/payables or debtor/receivables account.

Note: If you want to print cheques or other documents for these payments you must include the payee's name on the source transaction in the description field.