New Customer Difference Items out of External Transactions

The purpose of the new ledger item is to establish a claim against an identified customer if a payment amount is withdrawn from the bank account or for any other similar scenario.

Automated creation

The possibility to create new items depends on the external file type and external file template that are used for the payment format. You can create new customer difference items automatically for dedicated payment formats where several options are available on how to create the new items in external payment parameters. The external payment parameters for the payment method, that you use for loading the external file, comprise the relevant parameters.

A common example for new items are return debit notes that can be included in the direct debiting return files, customer payment files or in files for bank statement of account. Most of the parameters that are relevant for return debit notes are prepared for the payment format which can be used to create new customer difference items. If you want to use new difference items for the purpose of return debit notes, the external payment parameters below should be completed according to your requirements:

• Message Codes: Invoice Type, Invoice Series ID, Tax Code and Payment Term, Difference Code, Generate Text for New Item option
• Reason Codes: Difference Code, Generate Text for New Item option

This description includes complementary information about new difference items which normally do not require an set up in the application.

Manual entry

Apart from loading file and create transactions for new items automatically, you can enter transactions for new items also manually. This is also possible for payment formats that are designed without message code or for which the automated creation of new items is not available. E.g. if a payment on account is suggested to create for a customer, you can switch the transaction to create a new difference item by selecting the new item check box in the External Payments per Load ID window. Payment terms and tax code of the customer are displayed by default if it is not specified for the message code.

External File Template

The customer ID and message code need to be available in the external file and the external file template must be designed to identify the customer ID and the message code in the file if new items should be created automatically from file. For the payment formats listed below, the customer ID and the message code are loaded from the external file in order to create a new customer difference item. Other information from the file that are also used for new items are included in the list below as well.

Message Code

Message code is the type of transaction in the external file and is used to trigger if and how the difference item should be created. The external payment parameters for the payment method, that you use for loading the external file, must include the message code. The transaction type must be Customer Payment. After you have loaded the file, the New Item check box in External Payments per Load ID window will indicate if a new item should be created. Also at this time, the parameters defined for the new item are applied to the external payment transaction.

Note: The new item for return debit notes is created independent of the preceding direct debiting, i.e. it is assumed that the customer payment transaction has been already acknowledged earlier.

Payment Format Message Function

The selected option Create New Diff Item in the Payment Format Message Function field of the message code specifies if a new item should be created for the transaction. This option is setup by default for message codes that are normally return debit notes. You can select a function for any message code in the External Payment Parameters/Message Code window, however, the relevant customer ID is provided from the file for certain message codes only. You can obtain the default setting of the message code in the Payment Formats Message Code window that can be reached from the payment formats per company. If a new item should not be created for the message code, you should clear the message function only in the external payment parameters, not in the payment formats, since the message code setup in payment formats are valid for all companies.

New Item Invoice Type and New Item Series ID

The invoice type and invoice series gives you the possibility, to separate the difference items for different purposes. E.g. from an external payment transaction, from the difference items that you create for other purposes in mixed payment and automatic customer offset or for write-offs in external payments. E.g. for return debit notes, a dedicated series ID would highlight such item easily in any analysis of customer items or in the follow-up process of open items, e.g. in reminders. You can define the invoice item and invoice series to be applied for the new item for each message code individually in the external payment parameters.

For series IDs without automatic invoice series numbering, the invoice number for the new item can be retrieved from the external file, provided the file template is designed in this way. The MT940DE format extracts from the file the date at which the return debit note was initiated by the debtor or its payment institute. This date is used for the invoice number. If the invoice number for the new item is not in the file or you have not setup an invoice series numbering, the transaction will display an error message due to the missing invoice number for the new item. The new item invoice number is checked for duplicates in the same customer and if a new item with the same number is created in another pending payment transaction, e.g. if the same new item is created by using the external payment and a mixed payment, an error will be displayed. You can modify the new item invoice number on the external transaction to any number manually that does not exist as a customer ledger item.

Tax Code

You can specify in the external payment parameters for the message code, the tax code that you want to apply to new items. Based on this tax code, possible tax reductions are posted when the new item is written-off or deductions and discounts are withdrawn. For message codes without a tax code, the system will apply the tax code defined in the customer's invoice basic data. If both are not setup with a tax code, the transaction will display an error and you need to enter the tax code manually in the external transaction.

Payment Terms

The payment terms for the new item should be specified per message code since new items are mostly of another nature than an normal invoices. The payment term from the customer's invoice basic data are applied to the external transaction, if the message code is setup without payment terms.

Reason Codes

The reason codes in the external files are additional/ detailed information about the transaction. E.g. for transactions of return debit notes, the reason code gives an explanation as to why the direct debit is returned. A return reason can be because of a wrong account number, incorrect account type, request for refund etc. The reason code is imported from the file along with the message code, and you can see the reason code in the external payment. IF you look at the External File Template section above you will notice which payment format is used to retrieve the reason code from the external file.

To follow-up on difference items, you can enter in the reason code if notes for the new item should be generated automatically and/or which difference code should be applied to the new item. Once the notes are applied to the new item, you can find the cause of the transaction in the printed notes of various reports, such as reminders, open item report, customer statement of account and difference notice items. You can define the difference code for the reason code that should be applied to the new item in order to automatize the clarification of the payment with the payer by using difference notice proposal.

Difference Code

You can define a difference code per message code and/or per reason code. For payment formats which do not support the reason code, you can define the default difference code to be applied to the new item on the message code in order to follow-up the payment clarification automatically by using difference notice proposal. The default difference code is also applied to new items if for the reason code no difference code is defined. The difference code is available in External Payments per Load ID window and can be manually entered too, if necessary, however, the difference code is only applicable for transactions for which a new item is created. You can modify or clear the difference code of the new item in the Customer Analysis window, if you notice that the difference code is no longer true.

Notes for New Items

The External Payments per Load ID window includes the text field that is used to create the notes for the new customer difference item. The notes can be printed in several reports of accounts receivable for follow-up purpose of the new items. You can display the notes in Customer Analysis window too. In external payments, the text can be entered manually but can be automatically generated.

Generate Text for New Items

If the payment format specific text for new items should be generated, you can define it per message code or reason code. The generated text has the following information:

• Description of the reason code or message code
• Text provided from the external file
• Payment Reference from the external file
• Series ID and Number of the invoice, connected to payment reference

The generated text depends on the file content and the payment format.

Pre-posting

You can enter a pre-posting for the new customer difference Item in the external payment transaction. The code string of the ledger posting will include the code parts for which the pre-posting is selected in the posting control for the posting type IP21.