How And When Are Automatic Payments Created?

The system creates automatic payments for bills which are created for accounts with an active auto pay option (note, the system uses the account's auto pay option that's effective on the bill's due date). The Autopay Creation Option field in the Billing tab of the Installation Options screen controls when automatic payments are created, distributed, and frozen. The valid values are:

• Create At Bill Completion - On selecting this auto pay creation option, the automatic payment is created when the account's bill is completed. The payment is distributed and frozen at the same time. This means that the account's balance is almost always zero (or in credit if they have a deposit). You will see the automatic payments in the payment list immediately after the bill is completed (rather than waiting until the automatic payment's extraction date).

• Create On Extract Date - On selecting this auto pay creation option, the automatic payment is not created when the bill is completed. Instead, the system calculates the automatic payment amount and extract date during the bill completion and stamps these details on the bill. The date is the automatic payment source's extraction date (refer to Automatic Payment Dates for more information on how this date is calculated). You can then create automatic payments for such bills on the extract date through the APAYCRET batch.

  Note: If a customer with an account that is set up for automatic payment has a non-billed budget that is not excluded from automatic payment, a background process (NBBAPAY) creates an automatic payment on the scheduled payment dates.

  The automatic payment is not distributed and frozen when the automatic payment is initially created. A separate background process (APAYDSFR) distributes and freezes the automatic payment on the automatic payment GL distribution date (refer to Automatic Payment Dates for more information on how this date is calculated). This means that the customer's balance increases when the bill is completed and is only reduced when the automatic payment is marked for interface to the general ledger.

  Note:

  It is possible for automatic payments to be distributed and frozen after being extracted and interfaced to a financial institution. Please refer to Downloading Automatic Payments and Interfacing Them To The GL and The Nightly Processes.

  An algorithm plugged in on the Installation Record calculates the payment amount irrespective whether the automatic payment is created at bill completion time or on the extract date. Please refer to APAM-DFLT for more information about how the algorithm that is supplied with the base package calculates this amount.

  With balance forward accounting, automatic payments are not just for new charges. The base package algorithm includes prior balances when it creates a customer's first automatic payment. For example, if a customer has an existing balance of $100 and then signs up for automatic payment, their next bill will cause an automatic payment of $100 plus any new charges to be created (assuming the $100 remains unpaid at the time the next bill is completed). Refer to Open Item Versus Balance Forward Accounting for information about balance forward accounting.

  • If a customer with a promise to pay indicates that the payment method is via "autopay", a background process (PPAPAY) creates an automatic payment on the scheduled payment dates. Please note, if the Autopay Creation Option on the installation record is set to Create On Extract Date, the automatic payment is NOT distributed and frozen when the automatic payment is initially created. Rather, a separate background process (APAYDSFR) distributes and freezes the automatic payment on the automatic payment GL distribution date (refer to Automatic Payment Dates for more information on how this date is calculated). Refer to The Big Picture Of Promise To Pay for more information about promise to pay.
  • If a customer with an account that is set up for automatic payment has a non-billed budget that is not excluded from automatic payment, a background process (NBBAPAY) creates an automatic payment on the scheduled payment dates. Please note, if the Autopay Creation Option on the installation record is set to Create On Extract Date, the automatic payment is NOT distributed and frozen when the automatic payment is initially created. Rather, a separate background process (APAYDSFR) distributes and freezes the automatic payment on the automatic payment GL distribution date (refer to Automatic Payment Dates for more information on how this date is calculated). Refer to What is a Non-billed Budget for more information about non-billed budgets.
  • A user can create an automatic payment by simply adding a payment tender with a tender type that indicates it is for automatic payment purposes. This would be a rather unusual thing to do, but you might do this if you want to immediately debit a customer's bank account after a large adjustment is added to the system (e.g., if they suddenly owe you a lot of money and you don't want to wait until the next bill to collect it). Automatic payments created by this method must be distributed and frozen before they can be extracted.
  Note: An algorithm is used to create automatic payments. The logic used to create automatic payments is plugged in on the Installation Record. Please note that this algorithm is not called when a user manually creates an automatic payment (by adding a payment tender with a tender type that indicates that it is for automatic payment purposes).

  When an automatic payment is first created, it gets marked with a distribution date. The distribution date is the date on which the automatic payment's FT's GL details can be interfaced to the general ledger (via the standard GL interface). The distribution date is determined as follows:

  • Every automatic payment references an auto-pay source.
  • Every auto-pay source references an auto-pay route type.
  • Every auto-pay route type contains an algorithm that is responsible for calculating the GL Distribution (Posting) date. On the GL distribution date, the automatic payment will be interfaced to the general ledger.

• Freeze Payment on Notification - On selecting this auto pay creation option, the automatic payment is created and distributed when the account's bill is completed. However, the automatic payment is frozen or cancelled for the account once the review comments are received from the auto clearing house. For more information, refer to the Freeze Payments on Notification section.

The system allows you to override the Create On Extract Date and Freeze Payment on Notification options for a set of accounts so that automatic payments are frozen immediately during the bill completion. For more information, refer to the Override Automatic Payment Creation Option section.