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Purpose

The functions for advance payments and payments to be justified have been developed for Public Sector customers in Spain , in order for FM users to create documents which represent invoices and payments using one transaction (F871, Post Payment Request). See Section Process Flow for details.

In particular, the advance payment feature enables public sector employees who are entitled to spend public funds to obtain cash advances before the actual spending, instead of subsequently being reimbursed by the organization’s treasury after the spending has occurred.

Prerequisites

In the Funds Management Government Implementation Guide ( IMG ), the following prerequisites apply:

  •   Funds Management Specific Settings   Requests   Additional Details      Define Additional Lines for Advance Payment   , you make the necessary settings in order to create the necessary additional document lines.

  • In the same IMG node under Business-Add-Ins , there is a possibility to deactivate the Business Add-In (BAdI) Check and Post Follow-On Documents . This is necessary if you want to activate your own implementation of this BAdI.

Process Flow

Advance Payments

Using advance payments, a public sector employee specifies a G/L account to be used for the payments to the “entitlement bank” from which the incurred expenses are to be paid (this public sector employee is regarded as “entitled person”). This G/L account is similar to the public sector organization’s own accounts. The process works as follows:

  1. At the beginning of the period, this account receives funds from the organization’s treasury.

  2. The person responsible for this account makes purchases during this period, paying for the purchases from his/her account in the entitlement bank.

  3. At the end of the period, a payment request is posted for the total amount of the purchases, using another account of this entitled person (such as a vendor account). The public sector organization’s treasury then reimburses the amount for the purchases of the period in question.

The following graphic provides an example of such a process:

This graphic is explained in the accompanying text.

Payments to be Justified

The payments to be justified involve a similar process, with the difference being that the posting of the payment request takes place at the beginning and not at the end of the period.

This process, which involves an integrated invoice/payment, is started using the payment request transaction, in which the invoice and the payment are posted simultaneously. The following graphic provides an example of this.

This graphic is explained in the accompanying text.

The account used for releasing funds, numbered 5585 in the graphics above, collects the fund releases, used to post funds that justify or replace advanced payments which have not been made yet, as follows:

  1. A debit posting is made against a credit posting for the AP group of accounts 4 (Spanish budgetary ledger). In this case, the payment proposal is made for funds specifically released for advancedpayments or payments to be justified.

  2. A credit posting is then made against a debit posting for the “Bank” group of accounts 5 (Spanish budgetary ledger). The posting is for payments made against the debit side of the corresponding account used for released funds, as well as for advanced payments or payments to be justified.

The debit balance contains the amount of released funds that were used for increasing the available funds. This means that there was no income in them in the current restricted payment account.

Result

You can now use the functions for advanced payments and payments to be justified in your organization.