Variable Standing Orders 

Definition

A special type of standing order whereby amounts are transferred to one or more recipient accounts periodically on a set execution date, depending on the account balance at the time. We distinguish between a partial (percentage) and a complete execution. You can also restrict the amount you want transferred by specifying minimum and maximum amounts. You can use this, for example, for bank transfers to variable savings and investment schemes.

Variable standing orders are executed in the end-of-day processing mass run, in the same way as standing orders with a fixed amount. For more information, see the Process Flow of End-of-Day Processing section of SAP Library.

Structure

The functionality of variable standing orders consists of the following information:

Required details:

·        Transaction currency: The currency in which cash flows from one account to another.

·        Rounding factor: The number of decimal places to which the posting amount is rounded off.

·        Percentage rate: A number specifying the percentage of the amount that is to be posted after the base amount has been deducted.

The system checks whether the value of the partial execution is 100%.

If you enter a value that is higher or lower than 100%, the system displays an error message. In this case, the standing order cannot be created.

Optional details:

·        Base amount: The minimum amount (in the transaction currency) that is to remain in the ordering party’s account when the standing order is executed.

·        Minimum transfer amount: A recipient-specific minimum amount that must be transferred when a standing order is executed. If an amount is lower than the minimum transfer amount, it is not posted.

·        Maximum transfer amount: A recipient-specific maximum amount that may be transferred when a standing order is executed. The maximum transfer amount must be larger than or the same as the minimum transfer amount, otherwise you cannot save a variable standing order.

Example of how to use the rounding factor:

An execution amount of EUR 2777 is to be divided equally between four recipients.

Rounding factor 0:

The calculated posting amount is rounded down to whole euro. Each recipient receives EUR 694.00 from EUR 694.25 (25%).

Rounding factor -1:

The calculated posting amount is rounded down to the first decimal place. Each recipient receives EUR 694.20 from EUR 694.25 (25%).

Rounding factor 2:

The calculated posting amount is rounded down to the second predecimal place (hundredth). Each recipient therefore receives EUR 600 from EUR 694.25 (25%).

Below is a description of how the system uses the current balance of the ordering party account to determine the interim amount as a preliminary stage in determining the execution amount at the time of the execution.

Interim amount = (account balanceOP - base amountOP) x percentage executionR (- rounding off) OP= Ordering Party and R= Recipient

Below is a description of how the system uses the interim amount to determine the execution amount to be transferred.

·        The execution amount is the same as the interim amount if there are no minimum and maximum transfer amounts specified. ·        The execution amount is 0 if the interim amount is lower than the minimum transfer amount. In this case, the standing order is not executed. ·        The execution amount is the same as the interim amount if the interim amount is larger than the minimum and lower than the maximum transfer amounts. ·        The execution amount is the same as the maximum transfer amount if the interim amount exceeds the maximum transfer amount.

Examples

Example 1:

Variable standing order with a base amount, minimum and maximum transfer amounts, an execution percentage of 100% and one recipient.

	Ordering party	Recipient
Account balance	EUR 1100
Base amount	EUR 100
Execution percentage		100%
Interim amount	EUR 1000	EUR 1000
Minimum transfer amount		EUR 50
Maximum transfer amount		EUR 400
Execution amount	EUR 400	EUR 400

Example 2:

Variable standing order with a base amount, execution percentage of 33% per recipient, a rounding factor of 1 and three recipients.

	Ordering party	Recipient 1	Recipient 2	Recipient 3
Account balance	EUR 1100
Base amount	EUR 100
Execution percentage		33%	33%	34%
Interim amount	EUR 1000	EUR 330	EUR 330	EUR 340
Minimum transfer amount		Open	Open	Open
Maximum transfer amount		Open	Open	Open
Execution amount	EUR 1000	EUR 330	EUR 330	EUR 340

Example 3:

Variable standing order with a base amount, different minimum and maximum transfer amounts, execution percentages of 10%, 10% and 80%, a rounding factor of 0 and three recipients.

	Ordering party	Recipient 1	Recipient 2	Recipient 3
Account balance	EUR 1100
Base amount	EUR 100
Execution percentage		10%	10%	80%
Interim amount	EUR 1000	EUR 100	EUR 100	EUR 800
Minimum transfer amount		EUR 150	Open	EUR 200
Maximum transfer amount		Open	EUR 90	Open
Execution amount	EUR 890	EUR 0	EUR 90	EUR 800