AP Payment Processing - Direct Debits

e5 Accounts Payable offers you the ability to pay suppliers by the direct debiting method.

If a supplier's payment method is direct debit, payments are taken by the supplier from your bank account. Hence, it is not necessary for you to generate payments for the supplier. However, you can, if required, perform allocation procedures to indicate which invoices have been paid. The following is an example of the general process.

A supplier with a direct debit payment method takes payment from your bank account by the normal direct debit procedure. For this to be reflected on the system, you must create a miscellaneous payment (for the amount taken by the supplier) which results in system postings being made to the bank nominated on the miscellaneous payment. Note that the miscellaneous payment must be created so that payment of it will not be generated (the Generate Payment field is blank). This indicates that the payment has already been made off the system.

A miscellaneous payment can be created for each direct debit payment (say, once a month), or you can decide to do this on a six-monthly or annual basis. Note, however, that system postings are not made to the bank account until the miscellaneous payment is created.

When the invoice is received from the supplier and entered onto the system in the normal way, an allocation process must be made to indicate that the invoice has already been paid. This can be done automatically or manually.

To perform this process automatically, the supplier must be drawn onto a payment schedule (in the usual way) which has the correct payment method and payment code for that supplier. The supplier's transactions must then be drawn onto the schedule, this includes miscellaneous payments and invoices (and, if applicable, credit notes). This system always ensures that, for direct debit suppliers, the payment value for each supplier is zero. This is achieved by deducting the value of the miscellaneous payments from the value of the invoices, i.e. by performing an allocation process.

Note that if the payment code for the supplier indicates automatic scheduling and automatic payment, the allocation process (in effect, a tidying-up process) is performed totally automatically, with you only being required to create the miscellaneous payment(s).

To perform the process manually, simply allocate the miscellaneous payment(s) to the desired invoice(s) in the miscellaneous payments option. The payment schedule processes are not then necessary, because the invoice(s) are to be fully paid and the payment(s) fully allocated.

NOTE The menu path shown is the default for the system. Your company may have customised menu options, so the path shown may not be accurate. Please contact your system administrator for details.