Organization Payment Methods
You must create one organization payment method for each combination of legislative data group, payment type, and currency that you use to disburse wages and other compensation. You can also create rules for validating or processing the distribution of payments.
You can create as many organization payment methods as required for your enterprise. Use the Organization Payment Methods task from Payroll.
Important aspects of organization payment methods are:
-
Payment types
-
Payment sources
-
Payment rules
Payment Types
When creating an organization payment method, you select a payment type.
The payment types available are:
-
Electronic funds transfer (EFT): The EFT file has a predefined structure for Bankers' Automated Clearing Services (BACS).
-
Cheque
Payment Sources
You must define at least one payment source for each organization payment method for payroll processing. Each payment source must be associated with an active bank account in Cash Management. If you define additional details at the payment source level, then to use those details when processing payments, you must enter the payment source name when submitting the payment process.
You can use the same bank account in different payment sources in more than one organization payment method, as illustrated in this example.
Payment Method |
Payment Source |
Bank Account |
---|---|---|
Cheque |
Royal Bank of Scotland Account A |
Bank A - Account 7890045 |
EFT - BACS |
Royal bank of Scotland Account B |
Bank A - Account 7890045 |
Payment Rules and Default Payment sources
If you define multiple payment sources, you can use payment rules to determine the appropriate payment source based on tax reporting unit (TRU).
This example shows one organization payment method with three different payment sources for different TRUs.
Payment Source |
Tax Reporting Unit |
Default Payment Source |
---|---|---|
Payroll EFT Source UK Bank A - Account 7890045 |
None |
Yes |
Payroll EFT Source London Bank B - Account 1238900 |
London TRU |
No |
Payroll EFT Source Birmingham Bank C - Account 8765999 |
Birmingham TRU |
No |
The first payment source that you add is the default payment source, but you can select another payment source as the default, or not have a default payment source.
To understand the effect of having a default payment source, consider these examples that describe what happens when a TRU changes, causing a payment rule to be invalid.
Approach |
Example |
---|---|
With a default payment source, the payment process pays employees using the default payment source. |
This approach might suit a company with multiple independent franchises, each with its own TRU. If a franchise holder sells the franchise, payments don't fail. |
Without a default payment source, the payments process issues error notifications to ensure that you use the appropriate payment source to fund the payment. |
This approach might suit a company with strict policies about payment rule compliance. |