Draft Rounding Calculation

Draft rounding enables you to control at what point a draft is issued for payment, as well as the alternate payment method that is used for payments that do not meet your specifications. Draft rounding is specified for a supplier location on the Supplier Information - Payables Options page in the Draft Processing Control group box of the Additional Payables Options section and on the Draft Options page in the Payment Selection Criteria component.

To apply the draft rounding rules that you specify in the Payment Selection Criteria component, you must already have selected Use Pay Cycle Default for the supplier in the Draft Rounding field on the Supplier Information - Payables Options page. If you select Do Not Use, draft rounding does not occur for the supplier. If you select Specify and enter a rounding position, the Pay Cycle process uses that value. When the Pay Cycle process runs, draft rounding rounds down to the whole value that you specify in the Rounding Position field for the supplier or in the Payment Selection Criteria component, depending on the preceding criteria.

If you select draft rounding, the system totals the amount of scheduled payments, rounding to the number of positions that you specify. Any remaining amount is either not paid during the pay cycle or is scheduled for payment by an alternate payment method. You specify how you want to handle the remaining amount in the Remaining Amount Action field on the Supplier Information - Payables Options page and the Draft Options page. The default relationship between the supplier and the payment selection criteria is the same as for the draft rounding position.

Here is an example of how draft rounding calculation works. Suppose that you have two suppliers that you pay by draft.

You have specified the following rounding options for Supplier A:

• Number of rounding positions: 5.

• Remaining amount action: do not issue draft.

You specified the following rounding options for Supplier B:

• Number of rounding positions: 4.

• Remaining amount action: alternate pay method.

• Payment method: check.

When the Pay Cycle process runs, the system finds the following scheduled payments for the suppliers:

Remit Supplier	Draft Master ID	Scheduled Payment
Supplier A	0001	3,000
Supplier B	0002	1,000,000
Supplier B	0002	3,001,500

Draft rounding calculation determines whether the total payment amount is over the rounding position value and, if so, what happens to the remaining amount. For the purposes of this example, draft rounding totals the scheduled payment amount for Supplier B and determines that the draft payment is over the rounding position value.

After rounding, these are the scheduled payments:

Remit Supplier	Draft Master ID	Scheduled Payment	Issue Draft?	Alternate Payment Method
Supplier A	0001	3,000	No	None
Supplier B	0002	1,000,000	Yes	None
Supplier B	0002	3,000,000	Yes	None
Supplier B	0002	1,500	No	Yes (check)

• Because Supplier A's rounding position is set at 5, no draft is issued for the scheduled payment until the payment amount is equal to or greater than 100,000.

• Because Supplier B's rounding position is set at 4, drafts are issued for the scheduled payments, because they are greater than the rounding position.

  Because the scheduled payment amount of 1,500 has exactly four positions, it is paid by check because the alternate payment method option is selected.