How You Deduct Bank Charges from Payments
You can configure your setup to have payment process requests deduct bank charges from supplier payments.
Settings That Affect Bank Charge Deductions
These setups affect whether bank charges are deducted and the amount of the deduction.
-
The bank charge definition on the Manage Bank Charges page.
-
The Bank Charge Deduction Type option:
-
Supplier Site page
-
Manage Payment Options page
-
-
The settlement priority:
-
Settlement Priority Override field of the payment process request.
-
Settlement Priority field on the selected installments and a payment process profile that groups installments by settlement priority.
-
How Bank Charge Are Deducted
The basis for determining the amount of the bank charge is the invoice amount minus withholding tax plus interest.
For example, if an invoice is for 100 USD, withholding tax is 15 USD, and interest is 14 USD, the basis for calculating the bank charge is 99 USD, which is 100 - 15 + 14.
These examples show how settlement priority settings affect a bank charge. Both examples use the bank charge information in this table.
|
Settlement Priority |
Standard Bank Charge (USD) |
|---|---|
|
Normal |
20 |
|
Express |
30 |
Example 1: Installment Grouping by Settlement Priority
This table shows prorated bank charges for invoices that have different settlement priorities and a payment process profile that groups installments by settlement priority.
|
Invoice Number |
Invoice Amount (USD) |
Settlement Priority on Invoice |
Prorated Bank Charge (USD) |
Payment Document Amount (USD) |
Payment Number |
|---|---|---|---|---|---|
|
1 |
100 |
Normal |
100 / (100 + 300) * 20 = 5 |
95 |
1 |
|
2 |
300 |
Normal |
300 / (100 + 300) * 20 = 15 |
285 |
1 |
|
3 |
100 |
Express |
100 / (100 + 300) * 30 = 7.50 |
92.50 |
2 |
|
4 |
300 |
Express |
300 / (100 + 300) * 30 = 22.50 |
277.50 |
2 |
Example 2: Settlement Priority Override
This table shows prorated bank charges for a payment process request that has the settlement priority override set to Express.
|
Invoice Number |
Invoice Amount (USD) |
Settlement Priority on Invoice |
Settlement Priority Override |
Prorated Bank Charge (USD) |
Payment Document Amount (USD) |
Payment Number |
|---|---|---|---|---|---|---|
|
1 |
100 |
Normal |
Express |
100 / (100 + 300 + 100 + 300) * 30 = 3.75 |
96.25 |
1 |
|
2 |
300 |
Normal |
Express |
300 / (100 + 300 + 100 + 300) * 30 = 11.25 |
288.75 |
1 |
|
3 |
100 |
Express |
Express |
100 / (100 + 300 + 100 + 300) * 30 = 3.75 |
96.25 |
1 |
|
4 |
300 |
Express |
Express |
300 / (100 + 300 + 100 + 300) * 30 = 11.25 |
288.75 |
1 |