Guidelines for Payment Accounting Options

On the Manage Payment Options page, set the payment accounting option to decide when payment accounting entries are created.

While setting up payment options, you can select one of the following option:

• At payment issue

• At payment clearing

• At payment issue and clearing

Caution: Carefully consider this setting during first-time implementation. You should not update this setting after the first implementation. Changing this causes the accounting to be stuck. You can create a new BU and set the new accounting option for it.

At Payment Issue

With this setting, the liability account is debited and the cash account is credited when a payment is created. For a bills payable payment, the credit is to the bills payable account. Then at payment maturity, the bills payable account is debited and the cash account is credited. Realized gain or loss is calculated at payment creation and for a bills payable payment, at payment maturity.

At Payment Clearing

With this setting, the liability account is debited and the cash account is credited when the payment clears. Realized gain or loss is calculated at payment clearing.

At Payment Issue and Clearing

With this setting, accounting entries are created at:

• Issue time: The liability account is debited and the cash clearing account is credited. For a bills payable payment, the credit is to the bills payable account. Then at payment maturity, the bills payable account is debited and the cash clearing account is credited.

• Clearing time: The cash clearing account is debited and the cash account is credited.

Note: Realized gain or loss is calculated at all points mentioned.

Note: You can use the Create Chart of Accounts, Ledger, Legal Entities, and Business Units in Spreadsheet task to automate your payment options setup.