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Collecting Drafts

Collecting Drafts

Concept

You can arrange to collect funds for a draft in one of these ways:

• Wait until the funds become available on the due date specified by the draft.

• Request an advance from the bank before the due date of the draft. This is called discounting the draft. Typically, banks charge a fee when they advance funds for a draft before its due date. You must account for this fee separately during draft collection.

 

Your bank collects the funds for the draft from the customer’s bank on the due date of the draft. Your bank informs you if it cannot collect the funds. On or after the due date, both you and the customer recognize the transfer of funds. You update the status of the draft in the records to show that it has been collected.

 

Some companies prefer to close the draft on the draft due date, while others wait until the payment appears on their bank statement. Processing options control the pay status code that the system assigns to paid draft records (R1), as well as whether to close the draft. The system removes the open amount from the draft record and creates records in the Receipts Detail table (F03B14) when you close the draft. If you choose to leave the draft records open, you must run the Draft Collection with Status Update program (R03B680) again to select and update the draft records and to create matching records in the F03B14 table. After you collect the draft and close it, you must post the draft batch to create the appropriate journal entries.

 

Additionally, the bank might assess fees for draft collection. Typical fees include charges for incomplete bank information, discounted drafts, and commissions. In addition, the tax regulations in certain countries might require that VAT be assessed on these fees. You account for all fees by creating a separate journal entry using the Journal Entries with VAT program (P09106).

Procedure

In this task, you will collect a draft that has been remitted to the bank.

Step Action
Navigate to the Draft Collection with Status Update program (R03B680) on the Draft Remittance and Collection menu (G03B162).

Click the Draft Remittance and Collection menu.

Click the Draft Collection with Status Update menu.

Use the Available Versions form to select a version of the batch program. In your work environment, the system might display additional versions.

Step Action
Click the XJDE0002 option.

Click the Select button.

Use the Version Prompting form to access data selection and data sequencing for the batch program. If the Data Selection or Data Sequencing options are disabled, you cannot review or change the data selection or sequencing for the version.

Step Action
Click the Data Selection option.
Click the Submit link.

Use the Data Selection form to specify which records the system should retrieve from the database and include in the report.

Step Action
Click the Left Operand list.

Click the Address Number  (F03B13) (AN8) [BC] list item.

Click the Comparison list.

Click the is equal to list item.

Click the Right Operand list.

Click the Literal list item.

Use the Select Literal Value form to designate the value for your date selection search criteria.
Click in the Literal Value: field.

Enter the desired information into the Literal Value: field. Enter “473875“.

Click the OK button.

Step Action
Click the OK button.

Use the Processing Options form to set parameters for how a batch program processes data. Processing options are unique to a version. You should review processing options to ensure that the settings are correct.
Use the Final Mode processing option to specify whether to remit drafts in proof or final mode.
In proof mode, the system:

• Selects drafts that are either accepted or remitted.

• Prints a report that shows the drafts to be updated. It shows all drafts that have a payment status of G (draft deposited, not due) with a due date that you specify in a processing option.

In final mode, the system:

• Creates a batch header record in the Batch Control Records table (F0011) for collected drafts. You must post this batch to create the appropriate journal entries.

• Changes the pay status of draft invoice records (R1) to P (paid) or to another value that you select.

• Changes the draft status on the records in the F03B13 table from either 2 (Remitted – Cash or Discount) or 3 (Remitted – Contingent) to 0 (Collected).

• Creates one or more records in the F03B14 table, depending on whether you remit drafts. If you remit drafts, the system creates a reversing draft remittance record in addition to the record the system creates for the collected draft.

Click the As Of Date tab.

Use the “As Of” Date processing option to specify the date that the system uses to select draft records for remittance. The system selects all drafts with a due date on or before the date specified. If you leave this processing option blank, the system uses the system date.

Step Action
Click the G/L Date tab.

Use the Journal Entry G/L Date processing option to specify the G/L date that the system assigns to the journal entry that the system generates for remitted drafts. If you leave this processing option blank, the system assigns the system date.
Use the G/L Date From Bank Account Float Day processing option to specify whether to add the float days specified for the G/L bank account in the Bank Transit Master table to the draft due date used as the G/L date on the journal entry that the system generates for draft collection.
Use the G/L Date from Float Day Entered processing option to specify whether the system uses a different number of float days to add to the due date used as the G/L date, instead of the days specified for the bank account in the Bank Transit Master table.
Use the Number of Float Days processing option to enter the number of float days.
Use the Payment Instrument processing option to specify the payment instrument that the system uses to select draft records. Use this processing option only if you specified 1 in processing option 3 (G/L Date from Float Day Entered). Otherwise, the system does not select draft records by payment instrument. You are not required to complete this processing option.

Step Action
Click the Pay Status tab.

Use the Pay Status Code processing option to specify the payment status code for the system to assign to collected drafts. The code that you specify must be set up in the Payment Status Codes UDC (00/PS). If you leave this processing option blank, the system assigns the payment status code P (Paid in Full).

Note that this processing option works in conjunction with the Close Draft processing option. If you choose to update the pay status to P, but do not close the draft, the system considers the draft open and:

• Does not create Receipts Detail records for the R1 draft records.

• Does not update the pay status of the R1 draft records to P; it updates the pay status to A.

• Creates an empty batch header record for batch type RB. You can either post the empty batch header record or run the Batch to Detail integrity report to delete it.

Use the Close Draft processing option to specify whether to remove the open amount from the R1 draft invoice record if one exists.

Note that this processing option works in conjunction with the Pay Status Code processing option. If you choose to update the pay status to P, but do not close the draft, the system considers the draft open and:

• Does not create Receipts Detail records for the R1 draft records.

• Does not update the pay status of the R1 draft records to P; it updates the pay status to A.

• Creates an empty batch header record for batch type RB. You can either post the empty batch header record or run the Batch to Detail integrity report to delete it.

Step Action
Click the Exchange Rate tab.

Use the Exchange Rate Override processing option to specify the exchange rate that the system uses for drafts that pay foreign invoices. The system applies the exchange rate that you specify to all drafts regardless of the invoice currency. If you leave this processing option blank, the system locates the exchange rate from the Currency Exchange Rates table.
Click the OK button.

Use the Printer Selection form to identify printer information for the report. In your work environment, the printer settings will be different.

Step Action
Click the OK button.

Access and review the A/R Draft Collection report.
You have successfully collected a draft that has been remitted to the bank.

End of Procedure.

Ayman Refat
Over 20 years of experience in IT area, working as Oracle JD Edwards Developer with expertise in Windows Server, SQL Server and Microsoft Exchange Server, experience in Linux operating systems (Debian and Redhat), VMWare ESX / ESXi, Novell Netware, relational databases like Oracle 10/11g and backup solutions from Computer Associates. Large experience in high-end servers from Dell and HP, having the following certifications: Microsoft: MCP, MCSE, MCDBA, MCSA and MCT (2008 ~ 2013), Computer Associates: Technical Specialist – Storage and Backup Solutions,
http://www.AymanRefat.com

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