Handling Incoming and Outgoing Payments

In SAP Business One, Web client, a typical manual payment process looks as follows:

• The customers pay their debts, that is, the open A/R invoices based on agreed payment terms, such as Cash Basic, Installments, Net 30.
• The payment is documented in the Incoming Payment doc.

There are at least four payment means options for incoming payments.

Maria, the accountant at OEC Computers, deals with incoming payments every afternoon. She checks:

• The company’s bank account online to see incoming payments received from customers via bank transfer.
• The company’s cash and check account to see the amounts received from customs and the amounts that should be deposited fiscally in the bank.
• The credit card accounts (Visa and MasterCard) to see the amount of credit card incoming payments issued at the store point of sale and in the customer service center during the day.

Let's first look at the three payment means that typically have a two-step process: cash, check and credit card.

• Regardless of the payment means, when you issue a full incoming payment, the open invoice on the customer account is closed.
• Cash, check, and credit card payments are posted to a clearing or temporary account. Note that the term "clearing" is a localized term in the US. In other localizations, the term could be: "Temporary Account" or "Suspense Account". The clearing accounts are predefined during the setup.
• In previous image, Incoming Payment on the left shows 105, which generates the following automatic journal entry:
  • Debit to a clearing account - cash on hand/ credit card/ checks received.
  • Credit to customer account.
  • External tools, such as the point of sale system and authorization of credit card transactions, can be integrated into the standard process.
• The system retrieves the cash, and the checks received accounts from the G/L Account Determination window in SAP Business One.
• On the right, the second posting from a Deposit document is used to transfer the funds from the clearing account to the house bank account and clear the clearing account.

Another option for the payment means is via bank transfer.

When a customer pays using the Bank Transfer payment means, in most cases, the transaction does NOT involve a clearing account. The customer transfers the payment directly to your house bank.

In the previous image, there is a debit to the house bank account, and a credit to the customer account.

Working with outgoing payments is similar to incoming payments, except that you pay money instead of receive money.

When you create an outgoing payment, there is a debit to the vendor account and a credit to the bank account.

In most cases, the process of manual outgoing payments does not involve clearing or temporary accounts for credit cards, checks, and bank transfers. Instead, the credit posting is done directly in the bank account. If you wish to use a clearing or temporary account (e.g. in the case the bank statement is not available yet), an interim account can be manually inserted in the G/L account field in the Payment Means window. Then, when the payment is reduced from the bank, a manual entry should be created to debit the interim account and credit the bank account.

• Create incoming payments from customers to clear open A/R invoices using various payment means like cash, check, credit card, or bank transfer.
• Create outgoing payments to vendors to pay open A/P invoices, typically crediting directly to the bank account.
• Incoming and outgoing payments can be created from multiple places including payment list views, business partner records, and A/R or A/P invoices.
• Use list views to monitor, filter, and analyze incoming and outgoing payments by payment means and other criteria.