Paying the Subcontractor 

Use

When you pay your subcontractor depends on which offsetting method you use:

·        If you use the consumption-based method, you run the payment program before you offset the deductible payables against the invoices for chargeable components.

·        If you use the percentage-based method, you run the payment program after you have offset the deductible payables.

To see the activity in its context, see step 7 of the Subcontracting Process.

Procedure

Execute the payment program following the standard procedure, and, if you use the consumption-based method, exclude the Alternative Accounts Payable account from the payment run. Otherwise, you would pay the deductible payables.

To do so, when you enter the payment program parameters:

...

       1.      On the Free Selections tab, enter G/L Account in the Field Name field.

       2.      Select Exclude Values.

       3.      In the Values field, enter the following accounts, depending on which offsetting method you have agreed on with the subcontractor:

Offsetting Method	Accounts
Consumption-based	Alternative Accounts Payable Subcontractor Accounts Receivable – Pending
Percentage-based	Subcontractor Accounts Receivable – Pending
Payment condition	None

If you want to permanently exclude an account from the payment program, you do so in Customizing for Materials Management (MM), by choosing Inventory Management and Physical Inventory  ® Subcontracting with Chargeable Components  ® Deductible Payables  ® Alternative Accounts Payable Account  ® Exclude G/L Account from Automatic Payments.