Payment with Payment Advice and Clearing of Open Items at the Vendor

This Business Scenario Map is designed to show you how three parties - a customer, a vendor and a bank - use the business Internet to streamline the payment process. The map illustrates the benefits of collaboration. Information is shared quickly and easily between business partners. This reduces the communication effort. The result is a streamlined business process that saves time and money.

Show Document Flow

Business Benefits

Automatic transmission of payment advice with payment run

Reduced communication time and costs

Customer

Vendor

Bank

Run payment program

Create payment files and payment advices

Transmit files

Import payment advice into system of the vendor

Import electronic bank statement

Assign payment advice to payment

Automatic reconciliation of open items

Send electronic bank statement

Business Benefits

Seamless integration with ERP system through the EDI interface

No re-keying of the remittance data

Detailed payment information

Automatic reconciliation of open items - no manual processing

Reconciliation more accurate

Reduced reconciliation time and costs

Reduced communication time and costs


Payment with Payment Advice and Clearing of Open Items at the Vendor The customer logs onto the system and runs the payment program. The payment program creates payment files and payment advice notes automatically. Each payment advice note contains detailed information about deductions and cash discount terms for a payment. The vendor is provided with information about the payment by means of a detailed note to the payee field. In this way, time-consuming exchanges of information (in the form of letters and telephone calls) are reduced. The payment files are sent to the bank electronically. The bank processes the files, in other words it debits the bank account of the customer and forwards the credit memos to the recipient banks. The payment advice notes are transmitted electronically through EDI to the financial accounting system of the vendor. The vendor's house bank sends them an electronic bank statement. Here it is imported into the vendor's financial accounting system. Payment advice notes are assigned to the corresponding payments using the payment advice number. Automatic reconciliation of open items is possible because of the detailed information given in the note to the payee field of the payment advice. The system prepares postings for clearing and cash discount. No manual processing is necessary. Dunning is avoided due to the improved assignment procedure and immediate settlement. SAP Cash Management can help you meet today's financial challenges by improving your liquidity planning and cash-flow forecasting ability and enabling you to better manage and analyze your working capital. The high degree of automation eliminates redundant data entry and enables accurate, up-to-date cash reporting across countries, currencies, and subsidiaries. Because bank accounts and subledgers are reconciled automatically, your manual interventions are reduced to simply handling exceptions, which streamlines your month-end closing process. Your savings in transaction costs are significant, and you can make better, more informed cash management decisions.