How To Guide

SAP Business One 2005A SP1

Outgoing Payments

Overall Business Processes

OUTGOING PAYMENTS

Related Business Process

BUSINESS PARTNERS DOCUMENT ALLOCATION
Responsible Department
ACCOUNTING

Involved Departments
ACCOUNTING

Last Updated
13/08/2009

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How To Guide
SAP Business One 2005A SP1

CONTENTS

OUTGOING PAYMENTS ................................................................................................................................................3

INTRODUCTION .................................................................................................................................................................3
DESCRIPTION ....................................................................................................................................................................3
PROCEDURES...................................................................................................................................................................4
OUTGOING PAYMENT .......................................................................................................................................................4
PROCEDURE (A): DIRECT SETTLEMENT OF INVOICE OR PARTIAL PAYMENT AMOUNT ...................................................5
Direct Settlement of Invoice Results...........................................................................................................................6
Partial Payment ..........................................................................................................................................................7
Partial Payment Results..............................................................................................................................................8
PROCEDURE (B): PAYMENT ON ACCOUNT ........................................................................................................................9
Payment on Account....................................................................................................................................................9
Payment on Account Results.....................................................................................................................................10
PROCEDURE (C): ADD IN SEQUENCE ..............................................................................................................................13
Add in Sequence ........................................................................................................................................................13
Add in Sequence Results ...........................................................................................................................................14
PROCEDURE: OUTGOING PAYMENT FOR MULTI CURRENCY SUPPLIERS .......................................................................15
Outgoing Payment for Multi Currency Suppliers Results .......................................................................................17
PROCEDURE: CANCELLING OUTGOING PAYMENT .........................................................................................................18
Cancelling Cheques ..................................................................................................................................................19
Cancelling Outgoing Payment Results .....................................................................................................................19

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How To Guide
SAP Business One 2005A SP1

Outgoing Payments

Introduction
This document describes how to handle the outgoing payment process either to a customer, to a
supplier or to an account.

The procedures described in this function represent a concept that is generally applicable. The
character of this document is generic and does not cover special cases.

Description

In the outgoing payments window you create a record each time your company proceeds with a
payment, either for a customer, a supplier or an account. Supplier is selected by default.

The Outgoing payment document can be created for the following payment means: cash, cheque,
credit card, bank transfer and bill of exchange.

Once you add an Outgoing payment, an appropriate journal entry is created.

An Outgoing payment can be created in order to clear the credit of an open A/P invoice or opening
balance. You can also create an Outgoing payment for a down payment before the goods or
services were received.

To access this window, choose Banking Outgoing Payments Outgoing Payments.

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How To Guide
SAP Business One 2005A SP1

Procedures
Outgoing Payment
1. From the Main Menu, choose Banking Outgoing Payments Outgoing Payments. The
following screen appears.

2. Select an existing Business Partner by entering the Business Partner code in the Code field
or by typing the Business Partner name in the Name field.
3. Press the TAB key and the List of Business Partner will open.
4. From the List select a Business Partner.

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SAP Business One 2005A SP1

5. After selecting Business Partner system shows all documents related to the Business Partner
selected including: Journal Entries, AP Invoices and AP Credit Notes.

There are three different ways you can proceed with the Outgoing Payment:

a) Direct Settlement of Invoice or Partial Payment Amount

b) Payment On Account
c) Add in Sequence

Procedure (a): Direct Settlement of Invoice or Partial Payment Amount

Direct Settlement of Invoice

The following procedure explains how to create an Outgoing payment for a supplier against
specific invoice or invoices.

1. Choose Banking Outgoing Payments Outgoing Payments. The Outgoing Payments

window appears.
2. Select Supplier, and choose the required supplier code in the Code field.

3. Choose the documents from Payment table, the invoice, or invoices, against which the
payment is made. (The Documents for Payment table displays all unpaid invoices created for
the supplier).
4. The cumulative amount of the selected invoices is displayed in the Total Amount Due field
at the footer of the window.

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How To Guide
SAP Business One 2005A SP1

5. Fill in all the required details, and click on the toolbar to open the Payment Means
window.

6. Choose the payment means tab and enter the details. Choose OK to close the Payment
Means window and to return to the Outgoing Payments window.
7. Choose Add to create the document.

Direct Settlement of Invoice Results

The following process takes place after an Outgoing Payments document is added:

1. An Outgoing Payment document is created.

2. A journal entry which debits the supplier and the tax accounts (if tax is involved) and
credits the payable account is created.
3. The journal entries of the Outgoing payments and the paid invoices are reconciled.
4. The paid invoices are closed. They will no longer appear in the Open Items List and in the
Outgoing Payments window as documents for payment.

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How To Guide
SAP Business One 2005A SP1

Partial Payment
1. Select the invoice for which you want to create the partial payment. In the Total Payment
column, change the original amount to the amount that is actually being paid and press TAB.

8. Fill in all the required details, and click to open the Payment Means window.

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How To Guide
SAP Business One 2005A SP1

9. Choose the payment means tab and enter the details. Choose OK to close the Payment
Means window and to return to the Outgoing Payments window.
10. Choose Add to create the document.

Partial Payment Results

The following process takes place after an Outgoing Payments document is added:

1. An Outgoing Payment document is created.

2. A journal entry which debits the supplier and the tax accounts (if tax is involved) and
credits the payable account is created.
3. The journal entries of the Outgoing payments and the paid invoices are reconciled.
4. The partial paid invoices are not closed yet. The system will still show them as Open until a
full payment is posted. The amount in the Balance Due field of the partially paid invoice is
updated, and displays only the amount that still to be paid. The invoice status remains
Open.

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How To Guide
SAP Business One 2005A SP1

Procedure (b): Payment on Account

Payment on Account
1. Choose Banking module Outgoing Payments Outgoing Payments Select the
Supplier radio button.
2. Select Supplier, and choose the required supplier code in the Code field.
3. Do not select any invoice(s) for settlement.
4. Select the Payment on Account checkbox to create an outgoing payment not based on any
transaction or document that appears in the table.
5. After you have checked Payment on Account checkbox, the field on the right of the screen
becomes editable. Enter the amount to be paid.

6. Fill in the required details and click to open the Payment Means window.
7. Choose the relevant payment mean tab and fill in the details of the payment mean received.

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How To Guide
SAP Business One 2005A SP1

8. Choose OK to return to the Outgoing Payments window.

9. Choose Add to create the Outgoing Payment document.

Payment on Account Results

Once you add the Outgoing Payment document, the appropriate journal entry is created. In order to
allocate payment on account with posted documents you can use the Bank Statement and
Reconciliation function of the SBO.

1. To access this window, choose Banking Bank Statements and Reconciliations Link
Invoices to Payments.

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SAP Business One 2005A SP1

2. Set the range FROM TO of the BP code you want system to check for document
allocation.
3. If the Display Only Payments on Account indicator is checked, the system will filter data
and will give only the payments on accounts, without any other relative documents such us
journal entries or AP Credit Notes.

4. Right click on the line number and from the menu click Link invoices
5. The Outgoing payment window will open with all the outstanding transactions.

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SAP Business One 2005A SP1

6. Select transaction(s) in order to match the Total Amount Due as shown above and click
Update.
7. There will be some cases were the remaining amount to allocate will be less than the
document total. You can allocate partially this document as shown above, document 101,
the document total is 199.75 but the reaming amount is only 67.60; in this case you can edit
the total payment field and type 67.60.
8. Click Update to save allocation.

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How To Guide
SAP Business One 2005A SP1

Procedure (c): Add in Sequence

Add in Sequence

This option is available only if the Outgoing Payment is created for a supplier. If the payment is
not against specific documents/transactions, choose to close the documents/transactions according
their display order in the table.

1. Choose Banking module Outgoing Payments Outgoing Payments Select the

Supplier radio button.
2. Select Supplier, and choose the required supplier code in the Code field.
3. First click to open the Payment Means window, select payment means, enter all
required information and click ok.

4. At this point click Add in Sequence.

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SAP Business One 2005A SP1

5. The system automatically settles as many invoices as it is allowed based on the payment. If
the last invoice cannot be fully settled, then a part of the amount will be settling as shown
above.

Add in Sequence Results

The following process takes place after an Outgoing Payments document is added:

1. An Outgoing Payment document is created.

2. A journal entry which credits the supplier and the tax accounts (if tax is involved) and
debits the receivable account is created.
3. The journal entries of the Outgoing payments and the paid invoices are reconciled.
The paid invoices are closed. They will no longer appear in the Open Items List and in the
Outgoing Payments window, as documents for payment.
4. The amount in the Balance Due field of the partially paid invoice displays only the amount
that remains to be paid. This was the result of using the Add in Sequence function which
updated the Balance Due amount. The invoice status remains open.

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How To Guide
SAP Business One 2005A SP1

Procedure: Outgoing Payment for Multi Currency Suppliers

The following procedure explains how to create an Outgoing payment document for a multi-
currency supplier.

1. Choose Banking Outgoing Payments Outgoing Payments.

2. Select Supplier.
3. In the Code field, enter the supplier code. Enter the other relevant details.
4. To create a payment for specific invoice(s), select the relevant invoice(s) in the table. Once
you select the document(s), the Amount Due (FC) and Amount Due (LC) fields are updated
accordingly.

Note: If you select more than one document in more than one currency, the Amount Due (FC)
field displays *****.

5. If the payment made was without reference to a specific document, select Payment on
Account and enter the amount paid without any currency sign ($, ). The Amount Due
(LC) is updated automatically, and displays the amount entered.

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6. Click to display the Payment Means window.

7. Click in the Currency field and select the currency for the payment.

8. You can change the exchange rate from the primary window under Project field at the
Document Currency field. Change the rate if necessary.
9. Choose the relevant tab for the means of payment.
10. The G/L account that you enter in the Payment Means window should be in the currency
selected.
11. Enter the details for the means of payment.
12. Choose OK to return to the Outgoing Payments window.

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13. The Amount Due (FC) field displays the paid amount in the selected currency. The Amount
Due (LC) field displays the paid amount in local currency, calculated according to the
exchange rate defined in the Payment Means window.
14. To add the Outgoing payment document to the database, choose Add.

Outgoing Payment for Multi Currency Suppliers Results

Once you add the Outgoing payment, the following occurs:

1. An appropriate journal entry is created.

2. If the Outgoing payment was created for specific invoice(s) that were fully paid by
this payment, the following occurs:
a. The paid invoice(s) are closed.
b. The Paid/Credited and Balance Due fields in the invoice(s) are updated
accordingly.
c. The transactions for the Outgoing payments and the paid invoice(s) are
reconciled internally.
d. If the exchange rate of the invoice(s) is different from the exchange rate of
the Outgoing payments, SAP Business One automatically performs an
exchange rate differences transaction.

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How To Guide
SAP Business One 2005A SP1

Procedure: Cancelling Outgoing Payment

The following procedure explains how to cancel an Outgoing Payments document created for cash,
bank transfer and cheques.

1. Choose Banking module Outgoing Payments Outgoing Payments and search for the
Outgoing Payment document you need to cancel.
2. Display the Outgoing payment you need to cancel and choose the option Cancel from the
right-click menu or from the Data menu in the menu-bar.

3. Choose Yes to confirm the cancellation in the message that will appear.

4. If the posted payment has posting date in another posting period than the current one, the
system will inform you that the document will posted in the current posting date.

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SAP Business One 2005A SP1

5. In case you want to use the creation date of the document, then you must first change the
posting period.
6. You can change the default posting period through SAP Main Menu
AdministrationSystem Initialization General Setting. Highlight the desired period
and click use current button.
7. If you want to cancel the document on the same date on which it was created, then you
should chose Creation Date. The posting date option works only you want to cancel the
document using the current posting date, if the current period is also the default posting
period.

Cancelling Cheques
In case were you have cancelled an outgoing payment with a payment means of cheque, you will
not be able to issue a cheque with the same cheque number again, because the first cheque number
had been voided.

Cancelling Outgoing Payment Results

Once you have cancelled an Outgoing Payment document, SAP Business One performs the
following:

1. A reversal journal entry is created in order to cancel the one created when the Outgoing
Payment was added.
2. The Journal Remarks field in the cancelled Outgoing Payment displays the text: Cancelled.

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