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  11. Working with portfolio remittance

Working with portfolio remittance

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Portfolio documents are remitted to the bank for encashment or discounting. Encashment means that you receive the full outstanding amount as per due date. Discounting means that you receive the outstanding amount less commission before due date. The latter can be seen as “borrowing from the bank” with the portfolio document as collateral.

Portfolio documents include cheques and bills, i.e. documents with a value that cover the debt of a customer, and that can be exchanged for money. The remittance of all types of portfolio documents is handled via the Work with A/R portfolio remittance menu item.

Portfolio documents go through different stages in their life cycle indicated by status codes.

The following status codes are valid:

The bank remittance is a proposal maintenance routine, with the following steps:

  1. The system creates a proposal of portfolio documents to issue according to your selections. You can print a control list showing the contents of the proposal.
  2. You maintain the proposal, and print new control lists until satisfied with the proposal.
  3. You print the remittance letter, and the system updates the Accounts Receivable and (possibly) the General Ledger with the new status codes and transactions.
  4. If the bank accepts remittance on magnetic media, then you create the bank files and copy the files to media.
  5. If payment confirmation is required for any of the included documents, then you update the remitted documents as they are confirmed by the bank.

    6. Final closing of documents that have not been closed at payment confirmation is performed via the Close A/R portfolio menu item. See Close a bill by expiration.

    The cancellation of a portfolio document will reverse the bookings on all the current portfolio accounts and create a reverse payment. See About working with drafts and bills.

Accounting

The accounting for portfolio documents depends on the parameters listed below which are set up for the portfolio type connected to the payment document type.

Note: All accounts in portfolio handling will be control accounts.

Consolidated payment
YES Payment is confirmed at payment entry or bank remittance.

At payment entry
The Portfolio accounting parameter is NO. The A/R control account is credited as usual. The debit posting will be to the contra account of the document type.

At bank remittance
The Portfolio accounting parameter is YES. The A/R control account is credited as usual at payment entry. The debit posting will be to the portfolio control account of the portfolio type. At bank remittance, the portfolio control account will be credited, and the bank payment account of the portfolio type is debited.

Note: Only one of these rules will be valid in each case, since the system will not let you define contra accounting rules for the document type if Portfolio accounting is YES for the related portfolio type
NO Payment accounting will be a separate step within the bank remittance routine.
Automatic settlement
YES A payment transaction will be created automatically and all updated portfolio documents will receive status 3, payment created, immediately.
NO The portfolio documents will receive status 1, remitted to bank, or status 2, payment confirmed, and you must settle the document in the manual entry routine.
Consolidated closing
YES The portfolio document will be closed from further handling at payment confirmation (see above).
NO The closing is done separately, through the Close A/R portfolio menu item.

Enquiries and printouts

  • A/R portfolio enquiry – contains details, related A/R documents and accounting information for all portfolio documents that have been entered.
  • A/R transactions and balances – contains details and settlement information for all A/R transactions that have been entered.
  • G/L transaction details – contains the G/L postings for all A/R transactions in batches that have not been closed.
  • G/L transactions – contains the G/L postings for all A/R transactions that have updated the General Ledger. You can use the parameters document type and number for selection.
  • A/R transaction list – displays details for all A/R transactions that have been entered. A number of sequence and selection parameters are available, to give you the list that is relevant for your needs.
  • G/L transaction list – displays details for the G/L postings of A/R transactions. You can use the parameters document type and number for selection.
  • A/R balance list – displays customer balances on different levels.
  • Portfolio list – displays details for all portfolio entries that have been created. A number of sequence and selection parameters are available, to give you the list that is relevant for your needs.

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