Payment by Payment Order 

Purpose

This process shows you how to pay vendor invoices by payment order, including:

·        Creating an electronic file with the payment instructions for your bank

·        Importing the corresponding files sent to you by the bank, such as the electronic bank statement confirming that the payments have been made

In the following, the term “bank” also covers the clearing house BBS (Bankenes BetalingsSentral).

Prerequisites

·        You have a payment order account with a bank, and you have instructed it to use the DEBMUL message format with three levels (see “Constraints” below).

·        You have customized the payment methods for account-to-account transfers and banker’s drafts (Giro utbetalinger).

To this end, customize the payment methods as described in the documentation for the Payment Medium Workbench format NO_PAYMUL, in Customizing for Financial Accounting (FI), by choosing Accounts Receivable and Accounts Payable ® Business Transactions ® Outgoing Payments ® Automatic Outgoing Payments ® Payment Media ® Make Settings for Payment Medium Formats from Payment Medium Workbench ® Adjust Payment Medium Format.

·        You have customized the Electronic Bank Statement program so that it can interpret the Multiple Debit Advice (DEBMUL) messages that the bank sends you (see Automatic Clearing).

·        If you work with digital signatures, you have made the settings described under EDIFACT File Authentication.

Process Flow

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       1.      To pay invoices by payment order:

                            a.      You generate a Multiple Payment Order (PAYMUL) message with the payment instructions.

To generate the message, you use the Payment Program in conjunction with the Customizing settings described above.

                            b.      You send the PAYMUL message to the bank.

For information about this and more information about working with messages, see Data Medium Administration.

       2.      Immediately the bank receives your message, it:

                            a.      Checks the PAYMUL message’s syntax

                            b.      Sends you another message that states whether the PAYMUL message is syntactically correct

This is the Message Acceptance Acknowledgement (CONTRL) message.

       3.      When you receive it, you read the message.

¡        If the message confirms that the PAYMUL message syntax was correct, you do not have to do anything.

¡        Otherwise, it tells you what was wrong, and you have to retransmit the entire message.

       4.      Meanwhile, the bank processes your original PAYMUL message as follows:

                            a.      It makes the payments as follows:

§         In the case of account-to-account transfers, it deducts the money from your account and transfers it to your vendors’ accounts.

§         In the case of banker’s drafts, it prints a check payable to the vendor and sends it to them by mail.

                            b.      It then sends you a Multiple Debit Advice (DEBMUL) message with details of the payments made.

       5.      When you receive the message:

                            a.      You convert it into MultiCash format.

As well as converting the DEBMUL message, the system automatically generates a CONTRL message confirming that the DEBMUL message is syntactically correct.

                            b.      You process the converted DEBMUL message using the Electronic Bank Statement program.

The program makes the accounting postings to reflect the payments that you have made and clears the open vendor invoices against the payments.

                            c.      You send the CONTRL message from 5 (a) above to the bank.

Constraints

There is more than one format available for DEBMUL messages. The system only supports the format with three levels and is unable to interpret the message format with two levels.

In addition, the system does not process any information about bank charges, even if this information is included in the DEBMUL message.