1. Outgoing Payment Processing 4.6fi_24.1 Outgoing Payment Processing is the final step in the Procurement Cycle. The system employs an automated Payment Program which provides full functionality for processing Vendor payments. Chapter Objectives –Describe the input data needed to configure the Payment Program. –Discuss cash discount strategies. –Execute the Payment Program. Chapter 24 Outgoing Payment Processing

2. Outgoing Payment Processing 4.6fi_24.2 Master Record Open Items Payment Data Configuration Online Parameters Payment Proposal Run Payment Run Print Program Process Proposal Proposal Data Check Payment Summary Payment Advice Bank Transfer Payment Media Payment Program Overview

3. Outgoing Payment Processing 4.6fi_24.3 Master Record Open Items Configuration Online Parameters Address Account Control Bank Details Account Mgmt. Paymt. Transaction Automatic Paymt. Transactions Payment Program Select Open Items Select Bank(s) Payment Method Minimum Amounts Available Amounts Block Reason Cash Discount fields Payment Method Payment Block Specific Bank Payment Date Select Accounts Select Company Codes Next Payment Date Payment Program Input Data

4. Outgoing Payment Processing 4.6fi_24.4 Address Bank Account(s) Alternative Payee Master Record Payment Terms Payment Methods Payment Block Clear with Customer Our bank Payment Term Payment Block Payment Method Invoice Master Record Complete? Open Items to Pay? + Payment Input Data

5. Outgoing Payment Processing 4.6fi_24.5 Company Codes All Company Codes Paying Company Codes Payment Methods Country Company Code Banks Ranking Order Amounts Accounts Payment Program - Control Levels

6. Outgoing Payment Processing 4.6fi_24.6 Company Code Parameters All Company Codes Cash Discount Strategies

7. Outgoing Payment Processing 4.6fi_24.7 Cash Discount will only be taken if the applicable cash discount exceeds the percentage. Cash Discount Strategies Maximum Cash Discount will always be taken. Due Dates are not considered.

8. Outgoing Payment Processing 4.6fi_24.8 Company Code Parameters Paying Company Codes

9. Outgoing Payment Processing 4.6fi_24.9 Check Bill of Exchange Bank of Transfer (domestic + foreign) Postal Bank Transfer Check / Bill of Exchange Group Clearing (between Company Codes) Bank Collection Bank Direct Deposit Request for Bill of Exchange Bill of Exchange Refund by Bank Transactions Refund by Check Payables Receivables Payment Method in Country

10. Outgoing Payment Processing 4.6fi_24.10 Payment Methods in Company Code

11. Outgoing Payment Processing 4.6fi_24.11 Payment Methods in Company Code - Form Data

12. Outgoing Payment Processing 4.6fi_24.12 Bank Ranking Order and available Amounts

13. Outgoing Payment Processing 4.6fi_24.13 Company CodeName of Company 1000Boots - R - Us.. HousePaymentCurrencyAccountG/LClearChargeBusA BankMethodIDAccountAccountType 10000B 10000G/L Account0001 10000C 10000G/L Account0002........ 20000B 20000G/L Account 20000C 20000G/L Account 20000D 20001G/L Account G/L Account Assignment for Bank Accounts

14. Outgoing Payment Processing 4.6fi_24.14 Euro JPY USD Payment Program AUD ARS SEK Open items It is possible to process payments that contain an alternative payment currency (i.e., a currency other than the invoice currency) Payment Currency

15. Outgoing Payment Processing 4.6fi_24.15 Payment Blocking Reasons

16. Outgoing Payment Processing 4.6fi_24.16 Automatic Line Item Example: Payment Program

17. Outgoing Payment Processing 4.6fi_24.17 Office Supplies 2000 1 Fuji Bank 1940 2 Cash Discount Received 60 2 Accounts Payable2000 1 2 Automatic Line Item 1. Invoice2000(Payment Term: 3% Cash Discount) 2. Cash Disc. 60 3. Payment1940 Automatic Line Item Example: Cash Discount Received 2

18. Outgoing Payment Processing 4.6fi_24.18 Chart of Accounts 1000 ProcessSKE Account700210 RulesPosting Keys Cash Discount Received - SKE Account Assignment Depends on: Debit / Credit Tax Code Posting Key Debit40 Credit50 Automatic Line Items Example: Cash Discount Received

19. Outgoing Payment Processing 4.6fi_24.19 Payment Run Date05/27/YY Identificationxyz Posting Date05/27/YY Document Entered Until05/26/YY Company CodesPaymentNext Posting MethodDate 1000US06/14/YY Vendors (from/to)Customers (from/to) 1999919999 AdditionalLogTRACE Maintaining Parameters

20. Outgoing Payment Processing 4.6fi_24.20 Start date06/06 Start timeHH:MM:SS Start immediately Status Proposal is released Proposal is running Payment Proposal has been created Payment Run Date05/27 Identificationxyz Payment Proposal Run

21. Outgoing Payment Processing 4.6fi_24.21 Payment Program Own Bank Intermediary Bank(s) Vendor Bank Intermediary Banks: Solution Companies have the option to specify not only the banks at the start and at the end of the payment cycle (House bank and the business partner bank) but also the banks via which the payment should be made in between. The payment program can determine a predefined combination of intermediary banks for each payment

22. Outgoing Payment Processing 4.6fi_24.22 Proposal Data Process Proposal LogDisplay Exceptions Display List Due date check Select Payment Method Payment Records List of Blocked Accounts/Items Payment List Amounts by Business Areas Amounts by Countries Amounts by Currencies Amounts by Payment Methods Amounts by Banks Payment Proposal Data

23. Outgoing Payment Processing 4.6fi_24.23 Status _________________________________ Parameters have been entered Payment proposal has been created Payment run has been released Payment run is in process Payment run has been carried out: 1 generated, 1 completed Payments have been posted Payment Run Date05/27 Identificationxyz Status _________________________________ Parameters have been entered. Payment proposal has been created. Start date06/06 Start timeHH:MM:SS Start immediately Schedule Payment () Payment Run

24. Outgoing Payment Processing 4.6fi_24.24 Report RFFOUS_C Check Payment Summary Payment Advice Bank Transfer Print Program Payment Data Payment Media

25. Outgoing Payment Processing 4.6fi_24.25 HEADER ADDRESS PAGE INFO Your account at vendor MAIN Text Heading Line items Total CARRYFWDAmount to carry forward CHECK/CHECKADD Voided or Valid Check Form Structure

26. Outgoing Payment Processing 4.6fi_24.26 Outgoing Payment Program Chapter Summary Key Terms –Outgoing Payment Program –Payment Method –Payment Block –Paying Company Code –Sending Company Code –Optimization by Bank Group –Optimization by Postal Code –Variant

27. Outgoing Payment Processing 4.6fi_24.27 Outgoing Payment Program Chapter Summary Key Terms –Payment Currency –Intermediary Bank –Bank Chain

28. Outgoing Payment Processing 4.6fi_24.28 Appendix 1. Alternate Payment Currencies The automatic payment program can create payments for documents in any desired payment currency. Local Currency Transaction Currency Payment Currency Payment Amount (optional) (optional)

29. Outgoing Payment Processing 4.6fi_24.29 Vendor 1750 BRL (10000 MXN) TC= BRL, LC= MXN, PC= USD Vendor line item: Entering Altern pymt currency: USD Altern pymt amount : $1000 Warning/ Error: Payment amount differs by 2% from calculated amount: Currency translation: BRL->MXN: 5.714 + 1750 * 5.714 * 0.102 = $1,019.49 Table of exchange rates: M: MXN  USD = 0.102 Appendix 1. Alternate Payment Currencies

30. Outgoing Payment Processing 4.6fi_24.30 Vendor invoice 10 000 Local currency MXN Transaction currency BRL 1 750 Payment currency USD 1 000 Payment 9 5001 7501 000 EXCHANGE RATES BRL:MXN > 0.175:1 MXN:USD > 10:1 BRL:MXN > 0.2:1 MXN:USD > 9.5:1 MXN 1 250 exch. rate diff. gain MXN 500 GAIN MXN 750 underpmt loss MXN 8 750 Value of the open item at the current exchange rate 1750 / 0.2 Appendix 1. Alternate Payment Currencies

31. Outgoing Payment Processing 4.6fi_24.31 1. DEFINE SCENARIO (general, business partner specific) 2. ACTIVATE SCENARIO 3. DEFINE A BANK CHAIN A) General bank chain - independently of a business partner’s bank details - in IMG OR B) Partner Specific - on the application side House bank Business partner (customers and vendors) Cash management carry over Appendix 2. Intermediary Banks and Bank Chains - Activities

32. Outgoing Payment Processing 4.6fi_24.32 Scenario DescriptionGen. SearchRec. Search 0001 Sender oriented 0002 0003 No bank chain determination Receiver bank oriented 0004 Receiver oriented General search : Find bank chain using key fields: bank country and bank key Account no./ recipient specific search : Find bank chain using key fields: bank country, bank key and bank account number Customizing Application Appendix 2. Intermediary Banks and Bank Chains - Scenarios

33. Outgoing Payment Processing 4.6fi_24.33 Scenari o RankingRec. BankPmt.Curr. 0002 0 Payment program run Example: Scenario 0002, Business partner specific search, sender bank is house bank Sender bankRecip. Bank ctry 0002 1 1st step: Search with key: sender bank (bank ctry and - key) and payment currency. (if not successful) 2nd step: Search with key “payment currency” No.Category 1 Corr. country 1DE Corr. Bank key Corr. Bank acct. 40050060 86746352 Currenc y Bank ctry. sender UNI DE Bank key sender UNI 10020030 Bank chain assignment: Correspondence banks Output Pmnt. Currency : UNI House Bank ctry : DE House Bank key : 10020030 Vendor : Vendor 1 Vend.bank ctry: DE Vendor bank:12345678 bank acct. no: 87654320 Appendix 2. Intermediary Banks and Bank Chains - Scenarios

34. Outgoing Payment Processing 4.6fi_24.34 HB1 CB 1CB 2 Explanation: HB = House Bank CB = Correspondence Bank BPB = Business Partner Bank = Payment direction HB2 CB 3 HB3 BPBs Appendix 2. Intermediary Banks and Bank Chains - Scenario 1

35. Outgoing Payment Processing 4.6fi_24.35 BPB 1BPB 2 Explanation: HB = House Bank CB = Correspondence Bank BPB = Business Partner Bank = Payment direction HB BPB 3 CB 1CB 2CB 3 Appendix 2. Intermediary Banks and Bank Chains - Scenario II