Understanding Draft Processing

You perform the following tasks for supplier-initiated drafts:

1. Run the Create Drafts Application Engine process (AR_DRAFTS) to create the supplier draft and a draft worksheet.

   The status of a draft that you create is either Identified or Pending Acceptance.

2. Send the draft to the customer for approval unless the draft is preapproved, and print the Draft Document BI Publisher report (ARX32101) to provide the customer a list of items on the draft.

   If the draft is preapproved, the system automatically approves the draft when you create it, and you skip the next step. The status of an approved draft is Accepted.

3. Make any necessary modifications to the draft data on the draft worksheet and approve the draft.

   If the customer did not approve the draft, use the draft worksheet to reject the draft. The items will be available for selection on another draft worksheet.

   Note: To approve multiple drafts without changing item information, use the draft approval worksheet. Also, use draft approval worksheets if the person in your organization who approves drafts is not the same as the individuals who apply drafts to items on the draft worksheet.

4. Run the Receivables Update process to post the group, update the draft status, and update draft activity.

5. (Optional) Identify drafts that are being used as collateral and endorse drafts to another party as required.

   Once a draft is no longer being used as collateral or is endorsed, you can remit the drafts to the bank.

6. Select the drafts that you want to submit to the bank, specify remittance details for each draft, and mark the drafts complete using the draft remittance worksheet.

   The status of a remitted draft is Remitted.

7. Run the Receivables Update process to post the remittance group, update the draft status, update draft activity, and change the draft remittance status to Complete.

   The monies will either be collected at the due date or at the discount date after you run the Receivables Update process.

8. (Optional) Cancel a remittance.

   This changes the draft status to Accepted after you run the Receivables Update process.

9. Run the Format EFT Files SQR process (FIN2025) to create the file that you send to the bank.

10. (Optional) Create an EFT file cover sheet.

11. (Optional) Run the AR_DRAFT_BNK Application Engine process to receive the bank EFT file that indicates whether the payments were collected.

12. (Optional) Correct payment records from a bank EFT file that did not match drafts on the system to enable them to match existing drafts.

13. (Optional) Run the EFT Draft Inbound Exception report to obtain a list of drafts in the bank EFT file that failed collection due to incorrect bank details.

    You can only run this report if you received a bank EFT file.

    You correct the bank details for the customer on the MICR Information - Customer Bank page and then approve and remit the draft again.

14. (Optional) Cancel the EFT file if you need to reformat the remittance or if you lost the original.

15. Reconcile the draft by matching the amount of the draft received with the amount that was submitted to the bank when you receive a bank statement.

You can also choose to perform the following tasks at various points in the draft life cycle.

• Void a draft.

• Dishonor a draft.

The section that describes each of these tasks indicates when you can perform these tasks.

You perform the following tasks for customer-initiated drafts:

1. Enter the information from the customer's draft document into PeopleSoft Receivables.

   Because you must enter a customer ID, the draft status is Identified.

2. Build a draft worksheet, and select the items to include in the draft payment.

   When you save the worksheet, the draft status changes to Pending Acceptance. When the value in the Difference field on the worksheet is zero, the user can mark the draft approved. When this occurs, the draft status becomes Accepted.

   Note: To approve multiple drafts simultaneously after selecting the items, use the draft approval worksheet.

3. Run Receivables Update to post the group and update draft activity.

   The draft status remains Accepted. However, the posted date and group ID on the Draft Control inquiry page for the Draft Approval line is now populated.

4. (Optional) Identify drafts that are being used as collateral and endorse drafts to another party as required.

   Once a draft is no longer being used as collateral or is endorsed, you can remit the drafts to the bank.

5. Select the drafts you want to submit to the bank, specify remittance details for each draft, and mark the drafts complete using the draft remittance worksheet.

   The status of a remitted draft is Remitted.

6. Run the Receivables Update process to post the remittance group and update draft activity.

   The draft status remains Remitted. However, the posted date and group ID on the Draft Control inquiry page for the Draft Remitted line is now populated.

   The monies will either be collected at the due date or at the discount date after you run the Receivables Update process again. At this point, the draft status becomes Complete, and, if you open the Draft Control inquiry page, the posted date and group ID for the Draft at Due Date line is now populated.

7. (Optional) Cancel a remittance.

   This step changes the draft status to Accepted after you run the Receivables Update process.

8. Run the Format EFT Files process (FIN2025) to create the file that you send to the bank.

9. (Optional) Create an EFT file cover sheet.

10. (Optional) Run the AR_DRAFT_BNK process to receive the bank EFT file that indicates whether the payments were collected.

11. (Optional) Correct payment records from a bank EFT file that did not match drafts on the system to enable them to match existing drafts.

12. (Optional) Run the EFT Draft Inbound Exception report to obtain a list of drafts in the bank EFT file that failed collection due to incorrect bank details.

    You can run this report only if you received a bank EFT file.

    You correct the bank details for the customer on the MICR Information - Customer Bank page and then approve and remit the draft again.

13. (Optional) Cancel the EFT file if you need to reformat the remittance or if you lost the original.

14. Reconcile the draft by matching the amount of the draft received with the amount that was submitted to the bank when you receive a bank statement.

You can also choose to perform the following tasks at various points in the draft life cycle.

• Void a draft.

• Dishonor a draft.

The section that describes each of these tasks indicates when you can perform these tasks.

In some countries, drafts are sent electronically from a customer using an EFT file. The bank already holds the drafts so there is no need to remit the drafts to the bank.

You perform the following tasks for EFT drafts:

1. Run the AR_DRAFT_EFT process to load the EFT file into the draft tables on the database.

   Draft payments (known as kijitsu in Japan) are extracted from the file if the creation date is not equal to the accounting date (that is, the due date). The extracted data is loaded into the AR Draft Staging table (PS_DR_STAGE_EFT). If the customer name and bank account cannot be resolved to a customer ID and bank code, the record is marked as an error. If the review option on the run control record is set to errors only, the system converts staged drafts that are not in error into real drafts (DRAFT_CONTROL). The system also creates a customer reference record (DRAFT_ID_CUST).

   The AR_DRAFT_EFT process uses the Kijitsu file layout. Two Zengin data record formats are available for the file layout: Zengin Format A and Format B. You must use Zengin Format B. Format B allows for payment amounts of up to 13 digits. Do not use Zengin Format A.

   Note: Regular payments are extracted from the file if the creation date equals the accounting date (or due date). The extracted data is loaded into the AR Payment staging table (AR_PAYMENT_EC). These payments can then be converted to regular deposits using the Payment Loader Application Engine process (AR_PAYLOAD).

   See Using Electronic Banking to Process Payments.

2. Correct errors in the drafts on the Draft Staging table and create draft control records.

3. Make any necessary modifications to the draft data on the draft worksheet and approve the draft.

   Note: To approve multiple drafts without changing item information, use the draft approval worksheet. Also, use draft approval worksheets if the person in your organization who approves drafts is not same as the individuals who apply drafts to items on the draft worksheet.

4. Run the Receivables Update process to post the group, update the draft status, and update draft activity.

5. When you receive a bank statement, you reconcile the draft by matching the amount of the draft received with the amount that was submitted to the bank.

You can also choose to perform the following tasks at various points in the draft life cycle.

• Void a draft.

• Dishonor a draft.

The section that describes each of these tasks indicates when you can perform these tasks.