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Projects:Remittances/Functional Documentation

Contents

Document sign-off

Role Name Sign-off date
PM Patricia San Juan
QA Pablo Sarobe
Development Eduardo Argal

Document Status

Date Author or editor Description of change Document status Document version
July 23th, 2011 Eduardo Argal Guibert Document creation & sent for review Draft V1
April 14th, 2011 Patricia San Juan Document reviewed & completed Final V2
April 26th, 2011 Patricia San Juan Document updated based on Dev&PM discussion Final V3
April 28th, 2011 Patricia San Juan Document finished and sent for review Final V4

Overview & Justification

Purpose

The purpose of this document is to describe the functional specifications of a new extension module which is “Remittance” for Advanced Payment Management (APRM).

The purpose of this module is to enhance APRM module in order to allow the creation of Remittances of payments and/or collections. It should also be possible to print a Remittance.

Besides, this module must also support the creation of other extension modules which will implement a logic for an electronic file to be generated and sent to the bank.

This new feature is going to be developed and delivered as a new extension module which is going to be implemented according to the Technical Documentation which can be found here :
Remittances support Technical Documentation

Module/s Overall Information

Scope

Out of scope:

The first version of this module is not going to include the features listed below which have already been identify as feature requests.
These features which are currently out of scope will either be implemented as a new version of this module or as a new extension module (eiter community or professional).

New definitions and acronyms

Functional requirements

Configuration

Prior to start using remittance module, some configuration is required.
The configuration basics must be provided as a reference data.

Document Type

A new document type is required in order to manage Remittance.

Below Document Type named "Remittance" will be "Automatically" created after applying remittance reference data set to the legal entity:

Remittance Posting - Accounting Schema

There are going to be three new Accounting Schema Tables which must be setup as Active for Posting "Yes", for the corresponding Accounting Schema:

Payment Method configuration

A payment method is required in order to easily identify the documents which may be included in a remittance for its collection or payment.

Below basic "Payment Method" will be "automatically" created after applying remittance reference data set to the legal entity:

Above configuration indicates that the payment method can be used both for IN / OUT Payment transactions and that no accounting will be triggered for these elements in either step (receipt-payment / deposit-withdrawal / reconciliation-reconciliation).
That is the way it should be, therefore we get a specific Remittance accounting workflow by having into account the ledger accounts setup for each Remittance Type, see next section.

It links the payment method to an execution process as well, therefore payments created under this payment method can be executed and be included in a remittance document.

Afterwards this payment method must be assigned to:

Finally, lets remember that this module supports that any other payment method configuration can be deployed as a module.

Financial Account

The Financial Account to be used in the case of a "Remittance for Discount" must have a Business Parter setup by default, which will be the business partner assigned on the bank payment paid before the due date of the payments included in a remittance.

Remittance Type configuration

There must be a new window to setup remittances.

This new window must be located at the application path:
"Financial Management // Receivables & Payables // Setup // Remittance Type"

A remittante type is required prior to any remittance creation.

Below basic "Remittance Type" named "Printable Remittance" will be "automatically" created after applying remittance reference data to the legal entity. End-user could later on change its setup and even change its name.

Remittance Type could also include below information:

Finally, lets remember that this module supports that any other remittance type configuration can be deployed as a module.

There should be at least below 2 types of remittances in case of "collections":

Remittance management

There must be a new window to manage remittances.

This new window must be located at the application path:
"Financial Management // Receivables & Payables // Transactions // Remittance"

End-user must be able to create a remittance by detailing below information:

End-user must be able to create a new remittance by including:

It should be possible to generate the corresponding payment to be included in the Remittance grouping by:

It should be possible to:

a remittance

There should be a way for the end-user to see:

Settle / Protest Remittance

There must be a window to either settle or protest remittances.

End-user must be able to select:

once done, the system will show all the payments included in a remittance for the end-user to either Settle or Protest them, for a given accounting date.

User & busines process description

User goals

Remittance feature will allow the end user to:

  1. Generate a printable form of a remittance, including all the details needed for the bank to collect or to pay.
  2. Create a payment to reflect the Bank Payment before due date, in case of a remittance for discount.
  3. Provide the infrastructure required for any module to define a bank file generation logic by deploying:
    1. a dataset with the corresponding remittance type
    2. and the java class which will implement the file generation logic.

User Roles and Personas

The following roles are involved:

Accounting Manager (Mary): Mary is the accounting manager. She is the accountant responsible, therefore she needs to send remittance documents to the bank.

She should be able to setup financial accounts based on her company needs, and subsequent remittance configurations when required.

She should also be able to launch remittance printable form whenever needed in order to verify its content and get it final/approved.

Accounting staff (Peter): Peter is an employee part of the accounting staff. He will check the setup and he will also launch, verify remittance printable form together with the underline acconting related.

Sales staff (Mike): Mike is an employee part of the sales staff. He will be the one entering sales transactions as appropriate.

Purchase staff (Alice): Alice is an employee part of the purchase staff. She will be the one entering purchase transactions as appropriate.

Business scenario/s

F&B is an enterprise located in Spain making business with several Business Partners: Vendors, Suppliers, Customers, etc.

Every Business Partner can have a "by default" Payment Method such as "Check" or "Remittance", by example and a "by default" Payment Terms such as "Inmediate", "30 days" or "60 days" by example.

Mike a member of the AR (sales) staff issues sales invoice as required and Alice, a member of the AP (purchase) staff register purchase invoice in the system as required.

Either Mary or Peter will be the ones to register the corresponding payments (out/in) in the system if any.

Purchase Order/Invoices & Payments Out

(Prepayment) Remittance

Alice is in charge of entering in the system the purchase orders.

On January she enters and complete below purchase orders with below details:

Peter should be able to remit above purchase orders because Vendor B requires F&B to prepay in order for the goods to be sent to F&B.

For getting the above done:

It is important to highlight that Vendor D should have a Vendor prepayment account setup.

Posting must look like:

2.242,00 (40700) Vendor prepayment DEBIT
2.242,00 (40100) Remittance Sent Acount CREDIT

Later on and once the bank has made the payment, Peter needs to go to the "Settle Protest Remittance" window and select the organization, the remittance and once done press on the process button "Search", the system will show the just created remittance.
For a given accounting date, Peter must Settle the Remittance.

Back in the remittance window, he needs to select the remittance and from the Settle tab get it posted.

Posting must look like:

2.242,00 (40100) Remittance Sent Account DEBIT
2.875,66 (57200) Remittance Settle Acount CREDIT

Later on Vendor D sent an invoice to us for the 2 purchase orders, as those ones are already paid the due date of that invoice must be 14-01-2011. It should not be possible to include this vendor invoice in a remittance as it is already paid.

(Payment) Remittance

Alice is in charge of entering in the system the purchase invoices received.

On January she enters and post several purchase invoice with below details:

Besided dated on January 2nd, Peter needs to create a remittance for the payments listed above, therefore the bank can manage to pay the vendors/providers on the due date.

For doing that he navigates to the "Remittance" window and creates a new remittance. He must select a "Payment" remittance type do Not setup as "Remit for discount" linked to the method of payment "Remittance".
He enters 02-01-2011 as transaction date and 06-02-2011 as due date.
He also needs to select the financial account to be used.

Now Peter uses the option "Select Orders or Invoices" in order to add the purchase invoices to be paid; it could be that Peter would need also to add purchase orders.
While doing this, Peter selects below options:

The system will list above 3 invoices. Peter selects all of them and process.

Peter is now able to process the remittance by generating payments do not grouped by business partner because each payment will be paid on its due date.

Then, he will choose the option: "Generate payments and process".
This action will generate 3 payments, one per each business partner and each invoice:

These 3 payments will be created as well in the Payment Out window with status "Remitted".

Finally, Peter posts the Remittance to the ledger, to get that the amount is booked to the "Remittance Sent account". The posting will look like:

23.222,40 (40000) Vendor liabilities DEBIT
23.222,40 (40100) Remittance type - Sent Account CREDIT

(Payment) Remittance Print

Peter must be able to print the remittance by using "Print" menu button. Then he will send that printed remittance to the bank for the bank to manage the payments.

Remittance print must included below information:

Details for each payment:

Summary section:

(Payment) Settle / Protest Remittance

It was possible for F&B to pay on due date:

Peter must navigate to the new window "Settle / Protest Remittances". Once there he selects the Organization and the Remittance, 3 payments will be shown:

Pete must be able to see the status of each payment beloging to the Remittance in the Remittance window.
In this case there will be 2 payments listed in the "Settled" tab of the Remittance window and 1 payment listed in the "Protested" tab of the Remittance window.

Peter needs to post the ones settled, to get that the amount is booked to the Remittance Settle Account. The posting will look like:
9.888,40 (40100) Remittance type - Sent Account DEBIT
9.888,40 (57200) Remittance type - Settle Account CREDIT

Peter will need to post the one protested, to get that the amount is booked back to the Vendor Liabilities account. The posting will look like:
13.334,00 (40100) Remittance type - Sent Account DEBIT
13.334,00 (40000) Vendor Liabilites CREDIT

(Payment) Remittance Redraw

Later on, by mid February, it is possible to pay the unpaid Vendor A invoice.

Peter could create a new "payment" remittance in order to remit once again the unpaid Vendor A invoice; this time he will select the option "Select Payments" instead of "Select Orders/Invoices".

Peter gets the new remittance processed and posted. The payment with status "Awaiting Execution" changes to "Remitted".

After that he needs to navigate to "Settle / Protest Remittance" window and get that payment settled, payment status will change then to "Withdranw not Cleared".

Finally, Peter will need to navigate to the Remittance window in order to post the settled remittance.

(Payment) Remittance Write-off

Peter should be able to either write-off an "Awaiting Execution" payment or to include it in an existing or new remittance in order to redraw it.

For doing that Peter needs to execute the payment awaiting execution from the "Payment Out" window. Once there Peter clicks on "Execute Payment" process button.
The system must show up two options:

  1. Write off total amount.
    1. Peter will select this option in case he needs to write-off the payment purchase invoice
    2. Write-off amount field of the payment will be then filled-in with the purchase invoice amount and the payment status will be changed to "Payment Made".
  2. Include in existing remittance or create a new one
    1. Peter will select this option in case he needs to remit the payment once more.
    2. In case of existing an open remittance of the same type, that payment will be included there, otherwise a new remittance will be created.

Sales Orders/Invoices & Payments In

Remittance for collection

Mike is in charge of issuing sales invoices.

On April, Mike issues and post several sales invoices with below details:

Peter should be able to remit above sales invoices with the aim of getting the bank to collect the money from the customers on its due date.

For getting the above done Peter must follow below described steps:

A new window will pop-up in order to select either "Payment In/Out" transaction types or either "Orders", "Invoices" or "Order and Invoices"

Peter selects "Payment In" Transaction type and "Invoices".

The system will then show him just the sales invoices issued for "Customer D" as "Customer D" has a "Remittance" payment method setup by default.
But, it could be he also wants to remit Sales Invoices for Customers who don't have a "Remittance" payment method setup by default. Then he needs to press the option "Show payments for alternative payment methods".

In that case the system will show him the three invoices issued so far.

Peter selects all of them and click on "Process" button.

Three lines will be shown in the "Lines" tab, one per each invoice to get paid.

Peter then process the remittance do not grouping by Business Partner because the due date must be taken into account. It could be that Peter wants to group by due date but in this example is not relevant as the due dates are diferent from each other.

Three payments will be shown now in the "Lines" tab, one per each invoice to get paid.

He posts the remittance to get that the amount to be paid is booked on the "Remittance Type - Sent Account". The posting will look like:
35.400,00 (43120) Remittance Type - Sent Account DEBIT
35.400,00 (43000) Account Receivables CREDIT

Remittance for collection - Remittance Print

Peter verifies that the accounting related is right, he prints the remittance form and sends it to the bank for its collection by using "Print" menu button.

Remittance print must included below information:

Details for each payment:

Summary section:

Remittance for collection - Remittance Settlement & Protest

The bank manages to collect 2 of the 3 invoices above as the Customer E did not manage to pay F&B company.
The bank communicates to Peter, the collection of the money on the corresponding due date.

Peter must navigate to the new window "Settle / Protest Remittances". Once there he selects the Organization and the Remittance, 3 payments will be shown:

Pete must be able to see the status of each payment beloging to the Remittance in the Remittance window.
In this case there will be 2 payments listed in the "Settled" tab of the Remittance window and 1 payment listed in the "Protested" tab of the Remittance window.

Peter needs to post the ones settled, to get that the amount is booked to the Remittance Settle Account. The posting will look like:

22.420,00 (57200) Remittance Type - Settle Account DEBIT
22.420,00 (43120) Remittance Type - Sent Account CREDIT

Peter will need to post the one protested, to get that the amount is booked back to the Customer Receivables account. The posting will look like:

12.980,00 (43000) Account Receivable DEBIT
12.980,00 (43120) Remittance Type - Sent Account CREDIT

Remittance for collection - Redraw & Write off

Dated on June 2011, Customer E is able to pay and asks Peter to remit the unpaid invoice once more.

Remittance Redraw:

Peter could create a new remittance in order to redraw the unpaid sales invoice; this time he will select the option "Select Payments" instead of "Select Orders/Invoices".

Peter gets the new remittance processed and posted. The payment with status "Awaiting Execution" changes to "Remitted".

After that he needs to navigate to "Settle / Protest Remittance" window and get that one settled, payment status will change then to "Deposited not Cleared".

Finally, Peter will need to navigate to the Remittance window in order to post the settled remittance.

Redraw or Write-off

Peter could also navigate to the sales invoice, then to the "payment in details" tab and finally to the corresponding "Payment In".

"Payment In" is in status "Awaiting execution", therefore Peter can execute once again the payment by pressing the button "Execute Payment". The system must sow up two options:

  1. Write off total amount.
    1. Peter will select this option in case he needs to write-off the collection of the sales invoice
    2. Write-off amount field of the payment will be then filled-in with the sales invoice amount and the payment status will be changed to "Payment Made".
  2. Include in existing remittance or create a new one
    1. Peter will select this option in case to redraw the unpaid sales invoice once more.
    2. In case of existing an open remittance of the same type, that one will be included there, otherwise a new remittance will be created.

Remittance for discount

Mike is in charge of issuing sales invoices.

On June, Mike issues and post several sales invoices with below details:

Peter should be able to remit above sales invoices with the aim of getting the money from bank even before the sales invoices due date, which means even before the sales invoices are paid.

For getting the above done Peter must follow below described steps:

A new window will pop-up in order to select either "Payment In/Out" transaction types or either "Orders", "Invoices" or "Order and Invoices"

Peter selects "Payment In" Transaction type and "Invoices".

The system will then show him just the sales invoices issued for "Customer D" as "Customer D" has a "Remittance" payment method setup by default.
But, it could be he also wants to remit Sales Invoices for Customers who don't have a "Remittance" payment method setup by default. Then he needs to press the option "Show payments for alternative payment methods".

In that case the system will show him the three invoices issued so far.

Peter selects all of them and click on "Process" button.

Three lines will be shown in the "Lines" tab, one per each invoice to get paid.

Peter then process the remittance by grouping by Business Partner in order to save remittance fees, because this time the due date is not relevant but the discount date.

Two payments will then be shown in the "Lines" tab, one per each Business Partner.

Peter must post the remittance to get that the amount to be paid is booked in the "Remittance Type - Sent Account". The posting will look like:
35.400,00 (43110) Remittance Type - Sent Account DEBIT
35.400,00 (43000) Account Receivables CREDIT

And, this time, another payment is also shown in the "Remittance" header.
This payment is the "Bank Payment" dated on July 1st (discount date)
Peter must navigate to this payment in and get it posted. Posting must look like:

35.400,00 (57200) Bank Payment Method - Upon Receipt Use account DEBIT
35.400,00 (52080) Remittance Type - G/L item account CREDIT

Once know, Peter will have to book the payments fees charge by the Bank.
At the end of the day the money get from the bank will be less than the remittance for discount total amount.
For doing so, Peter will have to book the corresponding "Fee" in the Financial Account used for the remittance discount. Those "Fees" will have to be added as a new transaction in the "Financial Account", as described below:

Remittance for discount - Remittance print

Peter verifies that the accounting related is right.

He also prints the remittance form and sends it to the bank for the bank to manage the remittance discount.

Remittance print must included below information:

Details for each payment:

Summary section:

Remittance for discount - Remittance Settement & Protest

The bank manages to collect 2 of the 3 invoices above as the Customer E did not manage to pay F&B company.
The bank communicates to Peter the protest of the Customer E payment remitted.

Peter must navigate to the new window "Settle / Protest Remittance". Once there he selects the Organization and the Remittance, 2 payments will be shown:

Peter must be able to see the status of each payment beloging to the Remittance in the Remittance window. In this case there will be 1 payment listed in the "Settled" tab of the Remittance window and 1 payment listed in the "Protested" tab of the Remittance window.

Peter needs to post the one settled, to get that the amount is booked to the Remittance Settle Account. The posting will look like:

22.420,00 (52080) Remittance Type - G/L item account DEBIT
22.420,00 (43110) Remittance Type - Sent Account CREDIT

Peter needs to post the one protested, to get that the amount is booked back to the Customer Receivables account. The posting will look like:

12.980,00 (43000) Account Receivable DEBIT
12.980,00 (43110) Remittance type - Sent Account CREDIT

Peter must also create a payment out for the bank for the unpaid payment.
For doing that Peter will need to navigate to the Financial Account window.
Once there find the Financial Account used for the Remittance for Discount, and then he will need to add a new transaction by using a GL item as described below:

Remittance for discount - Redraw & Write-off

Dated on August 2011, Customer E is able to pay and asks Peter to remit the unpaid invoice once more, this time not for discount but for collection.

Remittance Redraw:

Peter could create a new remittance in order to redraw the unpaid sales invoice; this time he will select the option "Select Payments" instead of "Select Orders/Invoices".

Peter gets the new remittance processed and posted. The payment with status "Awaiting Execution" changes to "Remitted".

Posting must look like:
12.980,00 (43120) Remittance Type - Sent Account DEBIT
12.980,00 (43000) Account Receivable CREDIT

After that he needs to navigate to "Settle / Protest Remittance" window and get that one settled, payment status will change then to "Deposited not Cleared".

Finally, Peter will need to navigate to the Remittance window in order to post the settled remittance. Posting must look like:
12.980,00 (57200) Remittance Type - Settle Account DEBIT
12.980,00 (43120) Remittance Type - Sent Account CREDIT

Redraw or Write-off

Peter could also navigate to the sales invoice, then to the "payment in details" tab and finally to the corresponding "Payment In".

"Payment In" is in status "Awaiting execution", therefore Peter can execute once again the payment by pressing the button "Execute Payment". The system must sow up two options:

  1. Write off total amount.
    1. Peter will select this option in case he needs to write-off the collection of the sales invoice
    2. Write-off amount field of the payment will be then filled-in with the sales invoice amount and the payment status will be changed to "Payment Made".
  2. Include in existing remittance or create a new one
    1. Peter will select this option in case to redraw the unpaid sales invoice once more.
    2. In case of existing an open remittance of the same type, that one will be included there, otherwise a new remittance will be created.

Appendix

This section describe a few enhancement which have been recently implemented in the very last version of "Advanced Payables and Receivables management" feature which enhance remittances functionality:

Feature Request Nº 16782 - Payment Fees/Remittance Fees - a payment fee is a charge associated with the process of collecting payments for customers or managing payments to vendors. A remittance fee is a charge associated to remittance management. There could also be other kind of fees.

Example

Let's imagine a remittance payment made by our bank for a total amount of 1000,00 € + a fee amount of 50,00 €.
Once the corresponding bank statement has been imported, there will be a bank statement line for an amount of 1050,00 € but we do only have a remittance payment of 1000,00 €.
It is now possible to match the bank statement line of 1050,00 € with the payment of 1000,00 €,
besides the system will create automatically a new bank statement line for the remaining amount we can link to a fee of previosuly create GL Item in order to reflect the corresponding fees.

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