Understanding the Hankin Hante Split Payment Process

Hankin hante is a Japanese payment method to automatically split Accounts Payable payments. Payments over a designated amount are split into two smaller payments of different payment instruments— typically, a bank transfer and a draft. Splitting payments by using the hankin hante method is a general business practice in Japan because it enables companies to improve cash flow by deferring payment.

The Japanese government imposes a stamp tax on bank drafts. The amount of the stamp tax is determined by the draft amount. As a general practice, Japanese businesses split draft payments into two or more smaller drafts so that they pay less stamp tax.

For example, the stamp tax for a draft of 8,000,000 JPY is 2,000 JPY, the stamp tax for a 5,000,000 JPY draft is 1,000 JPY, and the stamp tax for a draft of 3,000,000 JPY is 600 JPY. Splitting an 8,000,000 JPY draft into two drafts of 5,000,000 JPY and 3,000,000 JPY saves 400 JPY in stamp tax.

To split Accounts Payable payments into payments of different types, complete the following steps:

Set up your system for hankin hante payments:
- Define the split amounts for drafts and for bank transfers in the Hankin Hante Split Amounts program (P75J0411).
- Assign the same payment instrument to each hankin hante supplier.
- Complete the Draft Ratio field on the Address Book Revision Japan form. You complete this form when you enter additional information for suppliers.
Use the Create Payment Control Groups program (R04570) to create preliminary payment control groups.
Run the Automatic Payment Split - Hankin Hante program (R75J04PS) in proof mode to review the hankin hante payment splits.
Run the Automatic Payment Split - Hankin Hante program in final mode.
Run the Create Payment Control Groups program to create payment control groups for the newly split bank transfers and drafts.
Run the Work With Payment Groups program (P04571) to write and update draft and bank transfer payments.
Run the Batches program (P0011) to review draft and bank transfer payments.
Run the General Ledger Post Report program (R09801) to post draft and bank transfer payments to the general ledger.
Run the Automatic Draft Split - Hankin Hante (R75J04DS) program in proof mode to review the split of the hankin hante draft payments.
Run the Automatic Draft Split - Hankin Hante program in final mode.
Run the Bank Draft Number Revision-Japan program (P75301) to update the draft number and change the maturity date.
Run the Manual Draft Split - Hankin Hante program (P75J04DS) to manually split drafts that could not be split automatically.
Run the A/P Draft Payable List program (R75402) to print the draft report.
Run the A/P Drafts Inquiry/Selection program (P04260) to select drafts for settlement.
Run the Post Drafts Payable program (R04803) to post the drafts to the general ledger.