1. Banking
Contents:
Entering Payments
Reconciliations
Payment Processes

2. Banking: Unit Objectives
At the conclusion of this unit, you will be able to:
Handle incoming and outgoing payments
Reconcile accounts internally
Enter external account statements and reconcile them with your bank account
Configure and use the payment wizard
Explain how payment processes for different payment means are structured

3. Banking: Course Overview Diagram
Human Resources
Financial Statements and Reporting
Financials
Banking
Service

4. Banking: Business Scenario
You must reconcile open receivables and liabilities with incoming or outgoing payments. When doing so, you must closely monitor and track these payment flows to ensure that they are handled correctly.

5. Entering Payments: Topic Objectives
At the conclusion of this topic, you will be able to:
Configure payment terms, cash discounts, and installments
Generate due date overviews for vendor liabilities and customer receivables
Post incoming and outgoing payments manually using various payment scenarios with different payment means
Use the payment wizard and define payment methods

6. Payment Terms - z Tolerance Days Due Date Calculation + x Months
+ y Days
Time
Baseline Date
Due Date
(or Value Date)
Based on
Original Day, Start, Middle, or End of Month of
Posting Date, System Date, or Tax Date
The payment terms specify when an invoice is due and the deadline up to which a cash discount is granted. Choose Administration  Definitions  Business Partners  Define Payment Terms to define and maintain payment terms.
The due date and the cash discount lines are calculated based on a baseline date. In the definition of the payment terms, you can specify that the baseline date is one of the following:
equal to the posting date, the system date, or the tax date entered in the invoice document (leave Start from field blank)
equal to the first day of the month of the posting date, the system date, or the tax date entered in the invoice document (Start from Month Start)
equal to 15th day of the month of the posting date, the system date, or the tax date entered in the invoice document (Start from Half Month)
equal to the last day of the month of the posting date, the system date, or the tax date entered in the invoice document (Start from Month End)
To calculate the due date (also called value date), the system adds a certain number of months and days to the baseline day and subtracts a number of tolerance days. You can enter the tolerance days in the payment terms or enter them for a specific business partner in the partner's master record.
The system uses a holiday calendar to check that the due dates don’t fall on a weekend or a public holiday. You can enter a holiday calendar in the business partner master record (relevant for customer invoices) or in your company details (relevant for vendor invoices).

7. Days After Baseline Date
Cash Discount
Cash Discount
Days After Baseline Date
45 days
30 days
14 days
No discount 3% 2% 1%
Time
Baseline Date
Cash Discount Line 1
Cash Discount Line 2
Cash Discount Line 3
The cash discount is defined as a separate object in the Cash Discount Name field within the payment terms.
To define the cash discount, you assign cash discount rates to certain day ranges added to the baseline date to which the rates apply. Alternatively, you can define fixed cash discount lines (fixed day of the month, number of month to be added to baseline date).
You can define a payment term so that the system automatically creates a suitable payment document as soon as you post an invoice (enter a payment means into the Open Incoming Payment field).
The payment terms contain the price list that the system should use for the relevant business partner, the business partner's maximum credit limit (total value of open invoices), and the business partner’s maximum commitment (total value of open invoices and predated checks). The payment terms also contain the dunning interest rates, the customer's total discount, and an interest rate for open invoices (purely informational).

8. Installments + x1 Month, + y1 Days + x2 Month, + y2 Days
Due Date of
1st Installment
50%
Due Date of
3rd Installment
25%
Time
Value Date of Invoice
Due Date of
2nd Installment
25%
Installments are defined as a separate object in the No. of Installments field within the payment terms.
To define installments, you define the installment rates and the months and days, which are added to the value date of the overall invoice to derive the due dates of the separate installments.
The system automatically creates a single line item in the journal entry for every installment.
These line items all appear in the payment screen so you can pay them one after the other.
The payment wizard handles them as separate invoices and you can reconcile them separately.
The Customer Receivables Aging report, the Vendor Liabilities Aging report, the Cash Flow report, and the Open Items List also treat them as single invoices.
You decide in the installments definition how the system handles the tax. This depends on the legal requirements in your country.
Apply tax in first installment – The system adds the whole tax amount to the first installment.
Update tax respectively – The system distributes the tax amount among all installments.
When you create a credit memo with reference to an invoice with installments, the system must assign the credit memo amount to the installments. You decide in the Credit Method field how the system handled this assignment.
Equally: The system distributes the credit memo amount equally to the installments.
First Installment: The system assigns the credit memo to the first installment, the second, and so on.
Last Installment: The system assigns the credit memo to the last installment, the last but one, and so on.
Invoice with one Line Item per Installment

9. Due Date Overviews Dunning Notices Payments Customer Receivables Aging
Vendor Liabilities Aging
Payments
SAP Business One is shipped with two reports for monitoring the due dates for open customer receivables and vendor liabilities:
Customer Receivables Aging
Vendor Liabilities Aging
Both reports allow you to restrict the information to certain business partner accounts. You can specify a key date after which the due dates are to be calculated. You can also specify an interval in days after which items that are overdue are to be grouped. You can display the due dates by their posting date or value date (due date).
When you export the list of due customer receivables to Microsoft Word, the system automatically generates payment reminders for the selected customers, which you can print and send to them.
To run the Customer Receivable Aging report, choose Reports  Financials  Accounting  Aging  Customer Receivables Aging.
To run the Vendor Liabilities Aging report, choose Reports  Financials  Accounting  Aging  Vendor Liabilities Aging.

10. 1 3 2 Dunning Customer Receivables Aging (Line Item View)
New dunning level is the dunning level in invoice + 1
Customer Receivables Aging (Line Item View)
Doc
Future Remit.
Int.
Range 1
Range 2
Range 3
Level
Letter
IN 102
$121 1
IN 113
$10
$434 3
IN 125
$255 2
IN 133
$120
The Customer Receivables Aging report supports you in creating dunning letters for your customers. On the result view of the report, you can manually select the customers for which you want to create dunning letters. On the document view of the report, you can set the dunning level for every single invoice. It helps if you define the intervals of days according to which the report displays the overdue items so that each interval also represents a dunning level.
You also decide on invoice level whether the system is supposed to print a dunning letter. You can design the dunning letter with the document editing functions. Usually, dunning letters belonging to a higher level are worded in a more severe way. Up to 10 dunning levels with different dunning letters are possible. Choose Administration  Definitions  Business Partners  Define Dunning Levels to define dunning levels, maintain dunning letters, and assign the dunning letters to the dunning levels.
You can print the dunning letter right from the report. If there are several invoices on the same dunning level, the system asks you if it should put them together on the same dunning letter, which makes sense in most of the cases. After the system has printed the dunning letters, it automatically enters the dunning level into the invoice and enters the highest dunning level in the customer master record. The next time you run the report, the default dunning level is the dunning level from the invoice + 1.
The system automatically calculates interest rates for the period after the due date if you specify so in the payment terms. The interest can then be included in the dunning letter.
You can dun invoices only; you cannot dun journal entries or credit memos.
You can block individual invoices or customer master records from being dunned.
Decide if you want to sent a dunning letter.

11. Incoming and Outgoing Payments
Incoming Payments
Document Header
Open Invoices
Totals, Remarks
The screens for incoming and outgoing payments (payments to vendors) are almost identical. The screen is divided into the document header area, an area for selecting open invoices and assigning the payment amounts, and an area for entering remarks and displaying totals.
In the document header, you choose the customer or vendor for the payment. The system then copies the Name, Bill to address, and the standard Contact Person from the master record. The system proposes the current date as the Posting Date and Tax Date (document date). You can either enter the document number manually or have the system assign it automatically in sequence. You can enter an external document in the Reference field. When you post the document, the system automatically assigns it a Transaction Number (number of the journal entry) and displays it in the relevant field.
The system displays the open invoices either with the internal invoice numbers or the external reference numbers of the business partner. An asterisk (*) after the invoice date indicates that the invoice is due. The system displays the invoice amount and due balance (invoice amount less any partial payments or credit memos) for each invoice. The system finally deducts the discount stored in the payment terms from the due balance and proposes the final amount for payment. If the account contains postings that are not invoices (for example, payments on account), the system displays only the relevant balances. You can also display the items, if necessary. You can enter payments that cannot be assigned to an invoice in a separate field. The system displays the full payment amount as the total.
To post an incoming payment, choose Banking  Incoming Payments  Incoming Payments.
To post an outgoing payment, choose Banking  Outgoing Payments  Payments to Vendors.
Add
Cancel
Add in Sequence

12. The printed text must not be modified or crossed out.
Entering Payments
Determine the Payment Amount
Split the Payment Amount According to Payment Means
Possible Payment Means:
Check
Bank transfer
Credit card
Cash
Karl Einstein
Date
Bank transfer
9.500
Deutsche Bank
- Four*Hundred - €
- 400,- To
The printed text must not be modified or crossed out. X
Acc. No. X X X
Payments are usually entered in two stages: specifying payment amount and splitting payment amount.
To specify the amount:
Choose Open invoices.
Enter a partial payment amount.
Enter an amount as a payment on account.
You can split the payment amount according to payment means:
Check
Bank transfer
Credit card
Cash
In most cases, the payer pays the amount in full using one means of payment. However, it is possible to split the amount among several means of payment. The system takes the details on the means of payment for incoming payments from the customer master records.

13. The Payment Wizard (1) Selection Criteria Recommendations
Wizard Options
General Parameters
Select Business Partners
Document Parameters
Payment Method Selection
Load
Recommendations
Save
Execute
The payment wizard is used to automatically create payment documents based on the open accounts receivable (A/R) and accounts payable (A/P) invoices in the system, as well as on certain selection criteria. Each run of the payment wizard is identified by a wizard ID and the date of the payment run.
When starting the payment wizard, you specify several selection criteria:
General parameters, such as the date of the next planned payment run, type (outgoing or incoming), and payment means (check or bank transfer)
The business partners that the system checks for due invoices
Selection criteria for the documents that the system includes
The payment methods that the system uses
Based on these selection criteria the system creates a recommendation report or a list of suggested payments. You can accept or reject the recommendations. You can save the recommendations and proceed at a later date, or you can execute the payments.
To run the payment wizard, choose Banking  Payment System  Payment Wizard.
You can define defaults values for the payment wizard. Choose Banking  Payment System  Define Payment Run Defaults.

14. The Payment Wizard (2) Selection Criteria Recommendations
Wizard Options
General Parameters
Select Business Partners
Document Parameters
Payment Method Selection
Recommendations
Report Printing
Document Printing
Business Payment Engine
Payment documents
Bank Transfer
Deutsche Bank
Checks
Check Printing
- Four*Hundred - €
- 400,- To
When you execute the payments, the system automatically creates the payment documents for your accepted recommendations.
A payment usually includes the amounts of several invoices if you did not specify differently in the business partner master record (select Single payment field). The system always compares the cash discount that is currently valid with the cash discount that is to be valid at the date of the next payment run minus the number of tolerance days.
If the created payments are check payments, they can be printed directly from the system under Banking  Document Printing or Banking  Outgoing Payments  Checks for Payment.
If the created payments are bank transfer payments, the Business Payment Engine (BPE) must be triggered to create the payment files in the correct country-specific format. The Business Payment Engine is an add-on to SAP Business One. It is included in the software package but must be installed separately.
The printed text must not be modified or crossed out. X
Acc. No. X X X

15. Payment Methods as Main Control Instrument
Definition
Business Partner
Type
Payment Means
Business Partner
Outgoing
Deutsche Bank
- Four*Hundred - €
- 400,- To
The printed text must not be modified or crossed out.
Acc. No. X X X X
Incoming
Payment Method
House Bank and Account
G/L Account
AP Invoice
With the payment method, you control the entire payment process.
Choose Administration  Definitions  Banking  Define Payment Methods to define and maintain payment methods.
In the definition of a payment method, you define the following:
Type of payment and payment means (outgoing: check or bank transfer, incoming: only bank transfer)
House bank and the bank account that should usually receive or issue the payment made with this payment method. In the definition of the house bank, a G/L account is mapped to the bank account.
Validation checks that the system is to carry out before using this payment method, as well as amount restrictions.
In the master records of the business partners, you must specify which payment methods you want to use with each business partner. In vendor master records of the vendors, you can specify payment methods with the type outgoing. In the master records of the customers, you can specify payment methods with the type incoming.
From the payment methods listed in the master records of the business partners, the system automatically chooses one. If you want to use a specific payment method for a certain invoice, you can also directly enter the payment method there.
If you want to use a different house bank for a certain business partner other than one specified in the payment method, you can enter the house bank directly in the master record for the business partner.
In the master records of the business partners, you can specify if you want to block payments. A payment block can also be made on invoice level.
Validation Options

16. Cash Discounts – Gross Procedure
Cash Discount for Customer Payment
Customer
Revenue 1
1000
1000 2
1000 1
Cash Discount Paid
Incoming Payment 2 30 2
970
Cash Discount for Vendor Payment
Vendor
Expenditure 2
1000
1000
1000 1 1
Cash Discount Received
Outgoing Payment
970 2
The system uses the percentages defined in the payment terms to calculate the discount.
When you settle an open item to a customer or vendor account, the system automatically posts the discount to the account for Discounts Paid or Discounts Received.
You must define the accounts under Administration  Definitions  Financials  G/L Account Determination in the Cash Discount fields on the Sales tab or the Purchase tab. 30 2

17. Reconciliations: Topic Objectives
At the conclusion of this topic, you will be able to:
Explain why internal and external reconciliations are necessary
Outline the options available for performing internal and external reconciliations
Carry out manual and automatic reconciliations
Use the reconciliation scenarios
Undo and correct reconciliations

18. Internal Reconciliations
System Reconciliation
Revenue
Customer
Bank 1 1 2 2
Invoice
Payment
User Reconciliation
Account
2000
5000
3000
1000
Account
2000
5000
3000
1000
Internal reconciliation refers to the logical assignment of open credit items to open debit items within an account (therefore internal). This is necessary for accounts where a business process is not regarded as fully complete until each credit amount has a corresponding debit amount.
In the case of customer accounts, a receivable (debit) must be followed by an incoming payment (credit).
With vendor accounts, a liability (credit) must be followed by an outgoing payment (debit).
In the case of Goods Receipt/Invoice Receipt accounts (GR/IR), each incoming invoice (debit) must correspond to a goods receipt (credit), and so on.
With the transactions for incoming and outgoing (vendor) payments, the system carries out this reconciliation immediately when the paid items are assigned to the invoices (system reconciliation).
In all other cases, you must reconcile the account with the Reconciliation transaction (user reconciliation).
To perform an internal user reconciliation, choose Banking  Bank Statements and Reconciliations  Reconciliation and select the Internal indicator on the General/Manual tab.
SAP Business One provides the following options for internal user reconciliation:
Manual
Fully automatic
Semi-automatic using a wizard that provides proposals for reconciliation

19. External Reconciliations
Options:
Manual
Automatic
Using a wizard
Account Statement
Bank
External Reconciliation
Debit
Credit
2000
2000
3000
3000
When you perform an external reconciliation, you reconcile the open items for an account with the open items in an external account statement. In most cases, the account statement is received from a bank and the account to be reconciled is the associated bank account. The statement, however, can also be received from a business partner that wants to reconcile the business partner account in your books with its own account.
As is the case with business partner accounts, bank accounts in SAP Business One also contain open and reconciled items. Open items are created when the system makes postings directly to the bank account as a result of payment postings in the accounting department. You do not reconcile these open items until you receive the bank statement after the bank has actually made the payment. Only the reconciled items in the bank account, therefore, reflect the current account balance at the bank.
SAP Business One provides the same options for external reconciliation as it does for internal reconciliation:
Manual
Fully automatic
Semi-automatic using a wizard that provides proposals for reconciliation
To perform an external reconciliation, choose Banking  Bank Statements and Reconciliations  Reconciliation and select the External indicator on the General/Manual tab.

20. Manual Reconciliations
G/L Account or BP Account
Open Transactions on Debit Side
Open Transactions on Credit Side
Transactions to be Reconciled on Debit Side
Transactions to be Reconciled on Credit Side
Manual Selection of Items for Reconciliation
You can perform manual account reconciliation on an individual basis only.
Here the system displays all the open transactions on the debit and credit sides in a table. You can choose the items you want to reconcile by double-clicking them. The system then displays these items in the lower part of the table. When the balance of all the credit items selected for reconciliation matches the balance of all the selected debit items, you can perform the reconciliation.
If the balance of the selected credit items does not match that of the debit items, you can manually post a reconciliation item to a difference account. This is particularly useful for minor differences, such as rounding differences.
You can also display the items that have already been reconciled by the system (on the basis of incoming payments) to correct them manually.
To perform a manual reconciliation, choose Banking  Bank Statements and Reconciliations  Reconciliation. Enter an account, choose the General/Manual tab and choose Reconcile.

21. Automatic Reconciliations
Account
Reference*
Date**
Amount
Amount
Date**
Reference* aa
01/12/03
1000
1000
01/12/03 bb yy
02/21/03
1000
1000
02/24/03 zz XX
03/02/03
1000
1000
03/31/03 XX
Reconcile by Totals Only
Restriction: Date
Restriction: Reference
When the system performs an automatic reconciliation, it attempts to assign and reconcile the debit and credit items in accordance with certain conditions. The figure shows an example of the result of various conditions.
Reconcile by Totals Only: The system reconciles all items whose amounts match and whose posting dates do not differ by more than the specified number of days (in this example, by more than three days).
Restriction by Date: The system reconciles all items whose amounts, as well as the posting date or the due date, match.
Restriction by Reference: The system reconciles all items whose amounts and one of the reference fields in the last X fields match. X can be freely defined.
After the automatic reconciliation is completed, the system proposes the remaining, unreconciled items for you to reconcile manually.
To perform an automatic reconciliation, choose Banking  Bank Statements and Reconciliations  Reconciliation. Enter an account, choose the Automatic tab and choose Reconcile.
* Reference: Ref. 1, Ref. 2, or Ref. 3
** Date: Posting Date or Due Date

22. Reconciliation Wizard
Criteria:
Amount
Date
Reference
weighted
Reconciliation Wizard
Folder with Reconciliation Proposals
Skip Proposal or
Choose and Reconcile Proposal
The reconciliation wizard uses certain criteria to generate proposals for reconciling items. An accountant then works through these proposals and chooses the most plausible ones for reconciliation.
As with automatic reconciliation, the criteria used here are the amount, date, and reference. With the reconciliation wizard, however, you can specify maximum variances in currency units and days for the amount and date. You can also weigh the criteria relative to each other. The weights and their descriptions are as follows:
High (weight 45%)
Medium (weight 30%)
Low (weight 25%)
By defining weights, you can assign values to the reconciliation proposals (which the system then displays on the left).
Specifying a maximum deviation for the amount can lead to unreconciled proposals. If you accept these proposals, you must manually post a reconciliation item to a difference account.
You can go to the manual reconciliation function from the reconciliation wizard at any time.
To perform a reconciliation with the reconciliation wizard, choose Banking  Bank Statements and Reconciliations  Reconciliation. Enter an account, choose the Wizard tab and choose Reconcile.
Check Proposals

23. Adjusting Reconciliations
Revenue
Customer
Bank 1 1 2 2
Link Invoices to Payment
Account
2000
5000
3000
Manage Previous Reconciliations
Cancel Reconciliation
Account
2000
5000
3000
Account
2000
5000
3000
Redo Reconciliation
Every reconciliation procedure is assigned a unique reconciliation number under which it is managed.
For system reconciliation, the reconciliation number is negative.
For user reconciliation (reconciliation that you have done with the Reconciliation transaction), the reconciliation number is positive.
If you posted payments without assigning them to any invoices, you can later use the Link Invoices to Payment transaction to assign invoices to a payment and let the system perform a system reconciliation.
The Manage Previous Reconciliations function allows you to adjust user reconciliations. You can select reconciliations by account, reconciliation date, and reconciliation number, and then cancel them individually, or cancel them and perform a new, manual reconciliation (redo). This function does not allow you to reverse reconciliation postings. The postings still exist even though the reconciliation has been canceled. If you want to reverse these postings, you must reverse them in the general ledger in the usual way by choosing Data  Cancel in the journal entry display.
To cancel or redo a user reconciliation, choose Banking  Bank Statements and Reconciliations  Manage Previous Reconciliations. If you select the Display Transactions Reconciled by System indicator, you can include items that have already been reconciled by the system in your user reconciliation.
If a reconciliation has produced data inconsistencies, you can use the Check and Restore Former Reconciliations function to cancel all the reconciliations (system reconciliations and user reconciliations) for an account that contains errors. You should contact SAP before you use this function.

24. Realized Exchange Rate Differences During Reconciliations
Outgoing Payments
Foreign Vendor
Open Items in FC, Rate: 0.5
Rate: 0.25
40 LC
10 FC
40 LC
10 FC
20 LC
10 FC
20 LC
Exchange Rate Differences
20 LC
Exchange rate fluctuations can cause exchange rate differences when items in a foreign currency are reconciled.
SAP Business One automatically posts these exchange rate differences as realized profits or losses.
The system automatically posts the exchange rate differences to the accounts that you have entered in the Realized Exchange Diff. Gain field and the Realized Exchange Diff. Loss field on the Sales tab and the Purchase tab under Administration  Definitions  Financials  G/L Account Determination.

25. Payment Processes: Topic Objectives
At the conclusion of this topic, you will be able to:
Explain how payment processes with different payment means are structured
Deposit cash and checks to your bank

26. Cash Payments Outgoing cash payment Bank Statement Bank Petty Cash
Vendor
Debit 2 2 1 1 OI
External Reconciliation with Bank Statement
Journal Entry
Payment to Vendor
Payment Means Cash
Open Invoice
Incoming cash payment
Customer
Petty Cash
Bank
Bank Statement OI 1 1 2 2
Credit
Open Invoice
The figure shows the business transactions and postings for the cash payment process, from the open invoice to the bank statement.
For outgoing cash payments, use the Payments to Vendors transaction with the payment means Cash to reconcile the open invoice and generate a vendor to petty cash posting. The system uses the cash account defined in the account determination settings. When you later withdraw money from the bank to replenish the petty cash, you make a manual petty cash to bank journal posting. The line item in the bank account is initially still identified as open. You then reconcile it with the line item on the account statement.
For incoming cash payments, use the Incoming Payments transaction with the payment means Cash to reconcile the open invoice and generate a petty cash to customer posting. The system uses the cash account defined in the account determination settings. When you later take the money to the bank, you use the Deposit transaction with the payment means Cash so that the system automatically makes a bank to petty cash posting. The line item in the bank account is initially still identified as open. You then reconcile it with the line item on the account statement.
Choose Banking  Deposits  Deposit and then the Cash tab to enter a cash deposit.
Incoming Payment
Payment Means Cash
Cash
Deposit
External Reconciliation with Bank Statement

27. Bank Transfer Vendor Payment by Bank Transfer Bank Statement Bank
Debit 1 1 OI
External Reconciliation with Bank Statement
Payment to Vendor
Payment Means Bank Transfer
Open Invoice
Incoming Payment by Bank Transfer
Bank Statement
Customer
Bank OI 1 1
Credit
The figure shows the business transactions and postings for the bank transfer process, from the open invoice to the bank statement.
To process a vendor payment by bank transfer, you use the Payments to Vendors transaction with the payment means Bank Transfer or the payment wizard to generate a vendor to bank posting and reconcile the open invoice. The line item created for the bank account remains open until you reconcile it with the associated outflow on the bank statement using an external reconciliation.
To process an incoming payment by bank transfer, you enter the line item that indicates an incoming bank transfer from your bank statement into the system when you process the bank statement. This line item usually contains the code of the business partner and a reference to the document (the document number of the invoice, a payment reference, or an ISR number). If you select the Create Payment indicator, the system tries to find the A/R invoice to which the bank transfer line item refers to and automatically creates an incoming payment document for it. The line item created for the bank account remains open until you reconcile it with the associated inflow on the bank statement using an external reconciliation.
Open Invoice
Enter Bank Statement
with Create Payment
External Reconciliation with Bank Statement

28. Handling Outgoing Checks
Bank Statement
Bank Account
Vendor
Debit 1 1 OI
Open Invoice
External Reconciliation with Bank Statement
Payment Documents
Payment Means Check +
If you have created a Payment to Vendor using the payment means Check, the payment process goes on as follows:
The payment document creates a journal entry that closes the open invoice on the vendor account and posts the offsetting entry to the G/L account that represents the bank account.
At the same time, the system creates a check for payment document. You can display the check for payment document under Banking  Outgoing Payments Checks for Payment.
From the Checks for Payment transaction, you can print the check individually and send it to your vendor. Alternatively, you can use Banking  Document Printing and choose the document type Check for Payment to print a group of checks at once.
The line item created for the bank account remains open until you reconcile it with the associated outflow on the bank statement using an external reconciliation.
Check for Payment
Print

29. Checks for Payment Payment Documents Cancel Add Canceled Save as draft
Payment Means Check
or create manually
Deutsche Bank To
The printed text must not be modified or crossed out.
Acc. No. X €
- 400,-
- Four*Hundred -
Canceled
Save
as draft
Deutsche Bank To
The printed text must not be modified or crossed out.
Acc. No. X €
- 400,-
- Four*Hundred -
Check for Payment Draft
Void
Check for Payment
Credited account
To Order of
You can create Checks for Payments documents in two different ways.
When you create a Payment to Vendor using the payment means Check, the system automatically creates a check for payment document. You can display the check for payment document under Banking  Outgoing Payments  Checks for Payment.
You can also directly use the Checks for Payment transaction to create a check for payment document that is not linked to an invoice. You can issue this check to any vendor account, customer account, or G/L account. In this case, you can choose whether a journal entry is created for this check payment or not. This could make sense in the following situations:
You want to make a payment on account to a vendor without referring to an invoice.
You want to create checks to pay your employees. In this case you create the check to the order of the G/L account for wage expenses and credit your bank account.
In case you want to cancel a payment, you can void the check for payment document in the system. The check for payment document then gets the journal remark canceled. If a payment document or a journal entry exists for the check for payment document, the system reverses it automatically.
Choose Banking  Outgoing Payments  Voiding Checks for Payment to void checks.
You can also cancel a check for payment document from the Checks for Payment transaction.
If you want to issue the same type of check regularly, you can use the checks for payment transaction to create the check for payment document as a draft and use this draft as a template. To transform a check draft into a check for payment document, use Banking  Outgoing Payments  Checks for Payment Drafts. 1 1

30. Handling Incoming Checks – Cash Checks
Bank Statement
Credit
Customer 1 OI
Checks 1 2
Bank 2
Open Invoice
Incoming Payment
Payment means Check
Deposit of Checks
External Reconciliation with Bank Statement
When you receive a check from a customer, you create an Incoming Payment with the payment means Check for the customer that closes the open invoice on the account and posts the check on a check account. This account represents the check drawer in your cash register. If you bring the check to the bank to cash it, you use the deposit transaction to create a journal entry that debits the bank account and credits the check account. This deposit can automatically reconcile the debit and credit postings on the check account. The automatic reconciliation is carried out using the Ref. 3 field, which contains the check number. The line item created for the bank account remains open until you reconcile it with the associated inflow on the bank statement using an external reconciliation.
You can keep track of all transactions with incoming checks using the Check Fund transaction.
Choose Banking  Deposits  Deposit and then the Checks tab to enter a check deposit. Select the Cash Checks indicator to deposit cash checks.

31. Handling Incoming Checks – Postdated Checks
Customer 1 OI
Checks 1 2
Postd. Checks 2 3
Bank 3
Credit
Open Invoice
Incoming Payment
Payment Means Check
Deposit of Postdated Checks
Postdated Check Deposit
External reconciliation with Bank Statement
In some countries, the customers can write postdated checks that you cannot cash them immediately. With postdated checks, you have several options as described here.
You can keep the postdated checks in your cash drawer (and on your check account) until they automatically turn into cash checks when the date is reached. You then deposit them as cash checks.
Some banks increase your credit limit if you deposit postdated checks before they are due. This is handled the following way:
Choose Banking  Deposits  Deposit and then the Checks tab. Select the Postdated Checks indicator to deposit postdated checks. Enter a special account for postdated checks as the bank account. The deposit then creates a journal entry that debits the account for postdated checks and credits the check account.
When the date on the check arrives, the bank cashes the checks and informs you. Choose Banking  Deposits  Postdated Check Deposit to create a journal entry that debits the bank account and credits the account for postdated checks. This deposit can automatically reconcile the debit and credit postings on the postdated check account. The automatic reconciliation is carried out using the Ref. 3 field, which contains the check number.
The line item created for the bank account remains open until you reconcile it with the associated inflow on the bank statement using an external reconciliation.
You can keep track of all transactions with incoming checks using the Check Fund transaction. Choose Banking  Incoming Payments  Check Fund.

32. Handling Outgoing Credit Card Payment
Bank Account
Vendor
Bank Statement
Debit 1 1 OI
External Reconciliation with Bank Statement
Payment to Vendor
Payment Means Credit Card
Open Invoice
If you have created a Payment to Vendor with the payment means Credit Card, the payment document creates a journal entry that closes the open invoice on the vendor account and posts the offsetting entry to the G/L account that represents the bank account. The line item created for the bank account remains open until you reconcile it with the associated outflow on the bank statement using an external reconciliation.

33. Handling Incoming Credit Card Payments
Customer 1 OI
Credit Card 1 2
Def. Account 2 3
Bank 3
Credit
Open Invoice
Incoming Payment
Payment Means Credit Card
Deposit of Credit Card Voucher
Postdated Credit Voucher Deposit
External Reconciliation with Bank Statement
When you receive a credit card payment from a customer, you create an Incoming Payment with the payment means Credit Card that closes the open invoice on the customer’s account and posts the amount on a credit card account. This account represents the credit voucher drawer in your cash register. The system takes the credit card details for the transaction from the master record of the business partner. Every credit voucher has a value date that specifies the date when you receive the payment from the credit card company. Choose Administration  Definitions  Banking  Define Credit Card Payment to define how the system calculates this value date. This calculation is based on either the receipt date (when using automatic submit) or the deposit date (when using manual submit). You define the type of submit in the Submit Credit Voucher field on the Sales tab under Administration  System Initialization  General Settings.
If you bring the credit vouchers to the bank before the value date, the bank keeps the voucher separately on a deferred account. Choose Banking  Deposits  Deposit and then the Credit Cards tab to create a journal entry that debits the deferred account and credits the credit card account. This deposit can automatically reconcile the debit and credit postings on the credit card account. The automatic reconciliation is carried out using the Ref. 3 field, which contains the number of the credit card voucher and the installment number.
When the value date arrives, the bank cashes the credit vouchers and informs you. Choose Banking  Deposits  Postdated Credit Voucher Deposit to create a journal entry that debits the bank account and credits the deferred account. The line item created for the bank account remains open until you reconcile it with the associated inflow on the bank statement using an external reconciliation.
Choose Banking  Incoming Payments  Credit Card Management to keep track of all transactions with incoming credit card payments. Choose Banking  Incoming Payments  Credit Card Summary to get an overview of the total amount of credit vouchers that you accepted each day.

34. Handling Incoming Credit Card Payments – Installments
Customer 1 OI
credit card
def. account
Bank 1 2 2 3 3 2 2 3 3
Credit … … … …
Credit
Open Invoice 2 2 3 3 …
Credit
Incoming Payment
Payment Means Credit Card
Deposit of Credit Card Vouchers (One for Whole Payment or One Per Installment)
Postdated Credit Card Deposit
In some countries, customers can specify that they want to pay the credit card amount in several monthly installments. Choose Administration  Definitions  Banking  Define Credit Card Payment Methods to define alternative methods for how incoming credit card payments are handled.
If installments are allowed, you can specify if the system should either generate one credit voucher per installment or one for the whole amount. If you have one credit voucher per installment, you can deposit them separately. In any case, your bank receives your claim as several installments that you post to the bank account using the Postdated Credit Voucher Deposit transaction. The line item created for the bank account remains open until you reconcile it with the associated inflow on the bank statement using an external reconciliation.
External Reconciliation with Bank Statement

35. Banking: Unit Summary You are now able to:
Handle incoming and outgoing payments
Configure and use the payment wizard
Reconcile accounts internally
Enter external account statements and reconcile them with your bank account
Explain how payment processes for different payment means are structured