ManualDoc:W3CAAC7D54593489384452416ACF356DD

Payment Methods represent means of payment employed by your enterprise or by a business partner, such as:

• Cash
• Credit Card
• PayPal
• Cheque
• Direct Debit
• Standing Order
• Bank Transfer
• Note Payable

Each payment transaction is associated with a Payment Method. A payment method defines how a payment in/out is going to be managed within the receivables and payables Payment Cycle, and besides how it is going to be accounted.

Payment Methods are associated to Financial Accounts, so that payments can be registered in a bank or cashbook.
The payment methods which can be used within the payables and receivables management are the ones assigned to a Financial Account, therefore if any payment method configuration needs to be modified, that has to be done in the Payment Method tab of the financial account.

It is possible to associate multiple Payment Methods to a single Financial Account.
For instance, both checking and electronic payments may be associated to a single Financial Account as each payment method has its own configuration.

Payment Cycle

To better understand the configuration of a Payment Method, it is necessary to understand the flow of events within the payment cycle:

• Order: the sales order or purchase order is used in this process of payables and receivables management in the case of an advance payment:
  • when the sales invoice or purchase invoice gets booked, the payment information can be generated for the order from either the Payment In window or the Payment Out window.
• Invoice: the purchase invoice generates a debt to a vendor and the sales invoice a debt-claim for a customer.
• Receipt or Payment: the registration of the transfer of money in or out before the transaction is confirmed in our bank account or cashbook.
• Financial Account update: the addition of the transaction in the Financial Account as a "Deposit" or as a "Withdrawal", related to the movement of the money in or out of our bank account or cashbook.
• Reconciliation: the confirmation of the movement of the money after receiving the bank statement or cash balance.

In the image below, a Simple Payment Workflow is shown:

The way to create each payment stage in Openbravo is described below:

First Stage:
A "Receipt" can be registed in:

• the Sales Invoice window by using the process button "Add Payment".
• and in the Payment In window by using the process button "Add details".

A "Payment" can be registered in:

• the Purchase Invoice window by using the process button "Add Payment".
• and in the Payment Out window by using the process button "Add Details".

Above payment stages can create an accounting event depending on the payment method accounting configuration.

• If it is configured to account at this stage, Receipts and Payments can be accounted in the Payment In / Payment Out window by using the process button "Post" or by running the accounting background process.

Second Stage:
A "Deposit" can be registed in:

• the Financial Account by using the process button "Add Transaction".
• and in the Payment In window by using the process button "Add details" and then the Action: "Process Received Payment(s) and Deposit"

A "Withdrawal" can be registed in:

• the Financial Account by using the process button "Add Transaction".
• and in the Payment Out window by using the process button "Add details" and then the Action: "Process Made Payment(s) and Withdrawal"

Above payment stages can create an accounting event depending on the payment method accounting configuration.

• If it is configured to account at this stage, Deposits and Withdrawals can be accounted in the Financial Account window by using the process button "Post" or by running the accounting background process.

Third and final Stage:
A "Reconciliation" can be registered in:

• the Reconciliation tab of the Financial Account window.

Above payment stage can create an accounting event depending on the payment method accounting configuration.

• If it is configured to account at this stage, Reconciliations can be accounted in the Reconciliation tab of the Financial Account window by using the process button "Post" or by running the accounting background process.

Payment Status

To better understand the configuration of the payment method, it is also necessary to understand the payment status related to the process steps.

During the whole Payment Cycle, the payment is defined by one status so the user knows the last step of the process that took place and the following step that should take place.

In the following explanation and diagram below, the different Payment Statuses are explained.

• Awaiting Payment: This status appears when a Receipt/Payment has been created in either the Payment In window or in the Payment Out window, but it has no details of what it is going to be received or paid.
• Awaiting Execution: This status appears when the Receipt/Payment has been created and processed and there is an automated execution process to be executed.
  This is an optional status which will be skipped if:
  • the Payment Method is Manual
  • or if the Payment Method is Automatic and it is not set as "Deferred".
• Payment Received/Made: This status appears when the Receipt/Payment has been completed and processed.
• Deposited/Withdrawn not Cleared: This status appears when the Receipt/Payment has been added to the Financial Account screen, therefore the corresponding Deposit/Withdrawal transaction has been created in the Financial Account.
• Payment Cleared: This status appears when the Deposit/Witdrawal reconciliation has been executed.

In more detail, the way those payment status change within the payables and receivables payment cycle is:

1. The Receipt of the money in or the Payment of the money out, before the transaction is confirmed on the bank account, changes the payment status to either:

• Awaiting Execution, if there is an execution process set up in the payment method used for the financial account
• or Payment Received in the case of a receipt of the money in
• or Payment Made in the case of a payment of money out.

If there is an execution process set up in the payment method, the extra action of executing that process changes the status from "Awaiting Execution" to either "Payment Received" or "Payment Made".

2. The Deposit of the payment in the financial account changes the payment status from "Payment Received" to "Deposited not Cleared"
and the Withdrawal of the payment from the financial account changes the payment status from "Payment Made" to "Withdrawn not Cleared".

3. The Clearing or reconciliation of the payments changes the payment status from either "Deposited not Cleared" or "Withdrawn not Cleared" to "Payment Cleared"