Understanding the Process for Assigning Payment Instrument and GL Account Relationships

This task is not necessary if you are manually activating a user-defined record type account as the vendor (V) type account.

When you assign a payment instrument to a record type or to a record type and a GL bank account, you are setting up rules that enable the system to select which bank account to use during automatic payment processing. The system automatically select the correct bank account based on the relationships that you set up.

To send a payment to one of the bank accounts that you set up for a supplier, set up one of two possible record-type relationship options:

• Set up a relationship between the record type that you created for Bank Type Codes (00/BT) and a payment instrument. In this case, a payment instrument is associated with a specific record type.

  For example, if you specify payment instrument T with user-defined record type Z, you process a payment instrument of T for any bank account that you have not specifically defined. The system uses record type Z to retrieve the payee's bank account information. If bank information for record type Z is not set up for a payee, the system uses the hard-coded record type V as the default value for that payee.

• Set up a relationship between the user-defined record type that you created for Bank Type Codes (00/BT) and a GL bank account and payment instrument. In this case, both a GL bank account and a payment instrument are associated with a specific user-defined record type.

  For example, if you specify GL bank account 1.1110 and payment instrument T with user-defined record type Y, you process a payment instrument of T for bank account 1.1110. The system uses record type Y to retrieve the payee's bank account information. If bank information for record type Y is not set up for a payee, the system uses the hard-coded record type V as the default value for that payee.