Processing Drafts

This chapter provides an overview of draft processing, lists common elements, and discusses how to:

• Create drafts manually.

• Manage drafts.

• Reconcile and approve drafts.

• Review drafts.

Understanding Draft Processing

This section discusses:

• Draft payment process flow.

• Sight codes.

• Vendor-initiated draft process.

• Customer-initiated draft process.

• Customer-initiated electronic fund transfer (EFT) draft process.

• Draft numbering.

• Draft maturity date calculation and processing.

• Draft staging process.

• Draft rounding calculation.

• Draft optimization (stamp tax minimization).

• Stamp tax calculation.

• Draft approval.

• Draft bank reconciliation and approval.

• Draft EFT bank files and EFT answer files.

• Draft statuses.

• Draft accounting entries.

• Draft accounting entries for value-added taxes (VAT).

• Draft write-offs.

• Draft processing limitations.

Draft Payment Process Flow

Drafts are used throughout the world in commercial transactions involving a customer or vendor that agrees to pay a specified amount on a certain day. Drafts are payments that are dated for some time in the future—usually in 30, 60, 90, or 120 days. Payables currently supports customer-initiated electronic funds transfer (EFT) and vendor-initiated drafts, and enables you to manage and process these draft payments efficiently.

Before the draft due date, the system produces a draft that includes the draft identification number, the draft amount, and the draft maturity date. You send this draft to your vendor. About 10 days before the draft maturity date, the vendor submits the draft to its bank for collection and the vendor’s bank asks your bank to honor the draft. Once your bank verifies the funds, it pays the draft. Payables checks for drafts that have matured at payment posting and changes the draft status of those matured drafts from Approved to Due.

This flowchart illustrates the draft payment process in Payables:

Draft Payment process

See Also

Running and Managing Pay Cycles

Available Payables Payment Formats

Sight Codes

The sight code references the agreed upon payment terms between you and your vendor. Sight codes are similar to accounts payable and accounts receivable payment terms, such as NET30, except that sight codes do not use discounts. You can maintain your default sight codes at the business unit, origin, and vendor levels of the PeopleSoft default hierarchy.

Vendor-Initiated Draft Process

You always create Bill of Exchange (BOE) or vendor-initiated draft payments manually. After you record the draft information, Payables creates the draft payment and generates the accounting entries. To create drafts manually, first create a draft identification number (draft ID) on the Create Manual Draft page and select the vendor. The system builds a worksheet that identifies scheduled payments that can be included on the draft. You select the scheduled payment to include for the draft.

Note. The Pay Cycle Application Engine process (AP_APY2015) does not process vendor-initiated drafts.

Vendor-initiated drafts differ from the check payment method because the vendor initiates payment and the draft is drawn against your bank account with a future due date—typically payable in 90 days. Upon the settlement date of the draft (at 90 days), you can assume that the whole amount of the draft has been withdrawn from your account.

There are two types of vendor-initiated drafts: unapproved and preapproved. When unapproved, the vendor must send you the draft; however, when approved, no action is required on your part. You assume that your vendor will still send you a nonnegotiable draft as information.

A draft is not always sent with the invoice that it pays. In fact, a draft might be issued for several hundred individual invoices. The invoices might have been entered before the draft is ever received. In this case, upon receiving the draft, you must associate the draft payment with the appropriate invoices. You assume that your vendor always informs you about which invoices are being paid by the draft.

When vendor-initiated drafts are processed, the vendor might not send a voucher, because a draft notice can suffice for a voucher. If you receive a voucher, you enter it and select Vendor Draft as the payment method. The system computes the scheduled due date, the maturity date, or the scheduled maturity date based on the usual terms and the sight code (if used). The date might not be the actual date of the draft when it is issued, but it gives an estimate for forecasting. When you manually create draft payments, you enter the actual draft issue date and the draft settlement date.

Note. If you haven’t prearranged with your bank to receive a bank information file, you do not need to run the Draft Reconciliation and Approval process (PYMNT_APPR_RECON). Depending on whether the Draft Issue Approval Required check box is selected in the Payables options, however, you may need to run the Draft Reconciliation and Approval process to promote the draft status from C (created) to A (approved) before you can run the Payment Posting Application Engine process (AP_PSTPYMNT).

See Also

Creating Drafts Manually

Drafts

Reviewing Draft Payments

Customer-Initiated Draft Process

Bills of Order (BOO), or customer-initiated draft payments, are usually created by the Pay Cycle process, which you schedule to run according to your needs. The Pay Cycle process sequentially evaluates the vouchers in the PS_PYMNT_VCHR_XREF table, selects the payment schedules to be processed using the criteria that you establish, and then creates draft payments. If stamp tax minimization is applicable, Payables splits the draft master and assigns sibling system draft identification numbers.

Customer-initiated drafts are most often processed by the Pay Cycle process and go through the approval process at that time. Drafts must be either in the Approved or Created status before they can be paid and accounting entries can be generated. If you don't require draft approval, you can select Preapprove on the Draft Options page of the Payment Selection Criteria component (PYCYCL_DEFN) before you start the Pay Cycle process. Preapproved drafts are created in the Approved status when the Pay Cycle process runs.

You can also create customer-initiated drafts manually on the Create Manual Draft page. You create manual customer-initiated drafts in the same way that you create vendor-initiated drafts.

See Also

Creating Drafts Manually

Running and Managing Pay Cycles

Reviewing Draft Payments

Customer-Initiated EFT Draft Process

Customer-initiated EFT drafts are processed in Payables much the same way that customer-initiated drafts are processed, except that you don’t print the drafts. Instead of printing drafts, you send an EFT file to your bank when the draft payment is due. Your bank pays the draft on the draft maturity date.

Note. If you haven’t prearranged with your bank to receive a bank information file, you do not need to run the Draft Reconciliation and Approval process; however, you do need to run the Draft Reconciliation and Approval process to promote the draft status from C (created) to A (approved).

See Also

Draft Approval

Draft Numbering

Payables assigns a reference identification number—similar to a check number—to each draft. This reference number varies by draft type and business unit. Payables prints this number on drafts, and you use it in your communication with your vendor as a means of identifying the draft. However, if you use preprinted stationery or vendor-initiated drafts, the number is already printed on the draft. In this case, you manually enter the preprinted number in the system as the draft identification number. You set up the draft reference number on the External Accounts - Payment Methods page when you set up bank information.

Automatic Draft Master Numbering

After you define the draft master ID, the Draft Staging process uses it to identify the payment schedule for a vendor for group of drafts. To find the next master ID, you can use autonumbering to search for a DTFP (or master draft ID). You set up your draft numbering scheme using the Auto Numbering (automatic numbering) page.

Draft Control Numbering

The draft control number is a system-assigned number that you use for auditing or internal control. During payment creation, the system assigns the draft control number, which is usually the same as the draft reference number. You can manually modify or override these numbers on the Draft Info Update (draft information update) page.

See Also

Processing Document Sequencing in Payables

Understanding Pay Cycle Manager

Defining Payment Methods

Setting Up Automatic Numbering

Draft Maturity Date Calculation and Processing

When you save a voucher, Payables automatically calculates the draft maturity date and the draft scheduled maturity date using the scheduled due date, sight code, and holiday values.

For example, suppose that your vendor’s sight code is two months. The basis date for this sight code is the draft issue date, which is the same as the scheduled due date. The scheduled due date for the payment is March 21. After the system calculates the maturity date, the maturity date is May 21 (March 21 plus two months). Because May 21 is a bank holiday, the scheduled maturity date is adjusted one day, making the adjusted maturity date May 22. The scheduled maturity date is used by the Payment Posting process to create settlement accounting entries, to debit draft clearing accounts, and to credit cash accounts.

Now suppose that you have two vouchers from the same vendor with the following information:

If you create a payment for these two vouchers in the Pay Cycle process, the payment will have the following dates:

Note. You can manually override the maturity date and the adjusted maturity date during scheduled payment, but the voucher payment schedule due date must be less than or equal to the maturity date or the adjusted maturity date.

See Also

Creating Draft Sight Codes

Running the Payment Posting Application Engine Process (AP_PSTPYMNT)

Defining Business Calendars

Draft Staging Process

When the Pay Cycle process runs, the Draft Staging Application Engine process (AP_DFT_PROC) can occur between payment selection and payment creation. The Draft Staging process groups scheduled payments and creates a temporary or virtual view of split draft payments. If you start the Pay Cycle process with payment selection, you must follow it with the Draft Staging process. If you start the Pay Cycle process with payment selection and payment creation, the Draft Staging process runs automatically. Depending on whether you have selected the Preapprove check box on the Draft Options page of the Payment Selection Criteria component, draft payment can ultimately be created with a C (created) or A (approved) status. After the Draft Staging process runs, you can review the scheduled payments on the Draft Staging Approval page, where you can approve or reject draft payments at the draft master level.

Because payments shown in the Draft Staging process have not yet been physically created or split (if you are using draft optimization), you can still reject the draft. If you approve the payment from the staging table, then the Payment Creation process creates a physical payment record, entering drafts with a status of C (created) or A (approved), based upon the approval option you selected on the Draft Options page in the Payment Selection Criteria component. For rejected draft payments, the status is returned to Unselect and the draft payment can be picked up during the next pay cycle.

See Also

Running and Managing Pay Cycles

Reviewing Draft Payments

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 vendor location on the Vendor 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 vendor in the Draft Rounding field on the Vendor Information - Payables Options page. If you select Do Not Use, draft rounding does not occur for the vendor. 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 vendor 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 Vendor Information - Payables Options page and the Draft Options page. The default relationship between the vendor 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 vendors that you pay by draft.

You have specified the following rounding options for Vendor A:

• Number of rounding positions: 5.

• Remaining amount action: do not issue draft.

You specified the following rounding options for Vendor 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 vendors:

Draft rounding calculation determines if 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 Vendor B and determines that the draft payment is over the rounding position value.

After rounding, these are the scheduled payments:

• Because Vendor 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 Vendor 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.

See Also

Running and Managing Pay Cycles

Defining Vendor Locations

Draft Optimization (Stamp Tax Minimization)

Draft optimization, or stamp tax minimization, is primarily applied to Japanese domestic drafts and is performed during the Draft Staging process. Stamp tax minimization reduces tax liability by splitting draft payments and determining the optimum number and denominations of drafts. Currently, stamp tax minimization uses the Japanese yen as the payment currency, and it uses the current Stamp Tax table which is updated by Japan’s Ministry of Finance to determine the stamp tax amount. You maintain the Stamp Tax table on the Stamp Tax page.

During draft staging, Payables summarizes the payment schedule information, based on the criteria that you specify in the pay cycle selection criteria. The optimal number of drafts is determined by using the draft master amount, the Stamp Tax table, and the maximum number of drafts that you specify. The Draft Staging process runs draft rounding, if applicable, and then runs stamp tax minimization. Drafts are then put into the staging table.

Note. Specify the Group Code on the Draft Maturity Date page to group payment schedules manually into one draft. Select the Separate Payment check box on the Additional Payables Options collapsible region on the Vendor Information - Payables Options page to create one draft for one payment schedule. You can preview, approve, or reject split draft payments on the Draft Staging Approval page.

See Also

Entering Draft Settings for Draft Payments

Running and Managing Pay Cycles

Defining Vendor Locations

Stamp Tax Calculation

Stamp tax calculation is based on the rules that you specify on the Stamp Tax Rule page in the Stamp Tax component (APD_STAMP_TAX_COM), and the Stamp Tax table associated with those rules on the Stamp Tax page. Here is an example with sample Stamp Tax table values:

Suppose that these are the stamp tax rules for the Stamp Tax table:

Here are two stamp tax scenarios:

Scenario A

The scheduled payment is for 8,400,000 JPY with a maximum number of drafts set to 4. When draft optimization runs for the scheduled payment, the following drafts are created:

Draft optimization performs the following actions:

1. Reviews the total value of the scheduled payment, and then finds the stamp tax rule that applies to the total amount.

   The total amount falls between the 5,000,000 to 9,099,999 range; drafts in this range are split at 5,000,000, giving us one 5,000,000 draft.

2. Checks the Stamp Tax table in the PeopleSoft system and determines that drafts for 5,000,000 are subject to stamp tax minimization in the amount of 1,000.

   This leaves a sum of 3,400,000.

3. Evaluates the stamp tax rules and finds that this amount falls within the 3,000,000 to 4,999,999 range.

   Drafts in this range are split at 3,000,000, giving us another draft of 3,000,000.

4. Checks the Stamp Tax table and determines that this amount is subject to stamp tax minimization in the amount of 600.

   This leaves a sum of 400,000.

5. Checks the Stamp Tax table and determines that this amount is subject to stamp tax minimization in the amount of 200.

Scenario B

The scheduled payment is for 8,400,000 JPY with a maximum number of drafts set to 2. When draft optimization is performed for the scheduled payment, the following drafts are created:

Draft optimization performs the following actions:

1. Reviews the total value of the scheduled payment, then finds the stamp tax rule that applies to the total amount.

   The total amount falls between the 5,000,000 to 9,099,999 range.

   Drafts in this range are split at 5,000,000, so the system creates one 5,000,000 draft.

2. Checks the Stamp Tax table and determines that drafts for 5,000,000 are subject to stamp tax minimization in the amount of 1,000.

   This leaves a sum of 3,400,000.

3. Evaluates the stamp tax rules and finds that this amount falls within the 3,000,000 to 4,999,999 range.

   Drafts in this range are split at 3,000,000, so the system creates another draft of 3,000,000.

4. Checks the Stamp Tax table and determines that this amount is subject to stamp tax minimization in the amount of 600.

   Because you specified that the maximum number of drafts for this vendor is two, the payment is not split any further.

Your vendor pays the stamp tax to the appropriate taxing authority. You can view stamp tax detail on the Draft Payment Inquiry - Draft Detail page, or on the Draft Create Detail - Stamp Tax Summary report (APY2054), Drafts Create Detail report (APY2053), and Drafts Create Summary report (APY2056).

Note. Review drafts after they are split on the Draft Staging Approval page. After a draft has been split, the system assigns the split drafts with the same draft master number. You cannot delete a single split payment created as a result of draft optimization. You must delete the entire payment by draft master number. Therefore, in the preceding example with two drafts created after draft optimization, you could not delete only the second draft. You would need to delete the entire draft payment.

See Also

Setting Up Draft Processing

Draft Approval

Draft approval is performed for vendor-initiated drafts, customer-initiated drafts, and customer-initiated EFT drafts. You can review and approve draft payments either before or after payment creation. If you select the Preapprove check box on the Payment Selection Criteria - Draft Options page, the system sets the draft status to A (approved) after the payment is created. If you do not select the Preapprove check box, the system sets the draft status to C (created), and you must approve the draft manually.

Reviewing and Approving Drafts Before Payment Creation

During pay cycle, select the Payment Selection value on the Pay Cycle Manager page.

After payment selection, run the Draft Staging process to group drafts and to perform draft optimization and rounding.

After draft staging, go to the Draft Staging Approval page, where you can review the draft payments and approve them before payment creation.

Reviewing and Approving Drafts After Payment Creation

If your bank does not send you a bank file containing draft details, you can approve drafts as follows:

1. After you run the Pay Cycle process or create drafts manually, use the Draft Approval page to manually update the draft status from Created to Approved.

   Depending on the option that you select on the Payables Options - Payment Options page, the system may require a status of Approved before it can generate accounting entries in the Payment Posting process.

2. Run the Payment Posting process to create accounting entries.

If your bank does send you a bank file containing draft details, you can approve drafts as follows:

1. When your bank transmits an electronic file to you that contains the draft detail, use the Draft Reconciliation and Approval - Draft Approval page to perform draft approval.

2. Review draft payments that the automatic reconciliation process matches.

3. Accept, reject, or partially pay payments.

   The approval process updates the status for all accepted drafts with the Approved status so that the Payment Posting process can generate accounting entries.

4. Use the Prepare Bank Answer File page to create a bank answer file for those draft payments with exceptions, and send the bank answer file to your bank.

5. Run the Payment Posting process to create accounting entries.

See Also

Reconciling and Approving Drafts

Defining Payment Options

Running and Managing Pay Cycles

Running the Payment Posting Application Engine Process (AP_PSTPYMNT)

Draft Bank Reconciliation and Approval

When you receive your bank statements, reconciling draft payments is no different from reconciling any other payment type within Payables. During bank reconciliation, you reconcile the payment information with the actual bank remittance.

If you have arranged with your bank to receive an electronic bank file containing the details relating to draft payments, you can use the Draft Recon and Approval (draft reconciliation and approval) component (PYMNT_APPR_RECON) to review and approve those draft payments that are coming due. If your bank does not send you a bank file containing draft details, approve your drafts manually. When the draft is due, review it on the Draft Approval page and manually change the draft status to Approved by selecting the Approve check box.

Automatic draft reconciliation and approval occurs when your bank transmits an electronic bank file to you that contains the draft detail. You import the bank file by selecting PeopleTools, EDI Manager, Monitor EDI Processing, Schedule Inbound EC Agent. The Draft Reconciliation and Approval process performs matching against the bank file by selecting each draft payment. It then updates the status for all accepted drafts with the Approved status so that the Payment Posting process can generate accounting entries. The Draft Reconciliation and Approval process automatically matches drafts with the following equivalent parameters:

• The draft number on the payment in Payables must exactly match the draft number in the bank file.

• The due date in Payables can be less than or equal to the due date in the bank file.

• The amount of the payment in Payables must exactly match the draft amount in the bank file.

The Matching Application Engine process (AP_MATCH) populates the Draft Reconciliation page with draft data, and it selects the drafts that do not match, citing a reason code. If the draft number and amount match, and the due date is greater or equal to the due date in Payables, then the draft is marked as Approved.

Note. The system requires a reject code for drafts that are not matched or that are rejected.

See Also

Reconciling and Approving Drafts

Reconciling Statements

PeopleSoft PeopleTools PeopleBook: Support Integration Technologies

Draft EFT Bank Files and EFT Answer Files

If you have arranged with your bank to process drafts electronically, your bank sends you an EFT file containing the payment information and requests confirmation within a specified time. Select PeopleTools, EDI Manager, Monitor EDI Processing Schedule, Inbound EC Agent to load the EFT file from the bank into Payables. The Draft Reconciliation and Approval process matches drafts in Payables against drafts in the bank file.

Review exceptions on the Draft Recon and Approval - Draft Exceptions (draft reconciliation and approval - draft exceptions) page. When reviewing draft payment exceptions, you have two choices:

• You can reject the entire amount.

• You can pay only the amount entered in Payables, rejecting the remaining balance.

After you review draft exceptions, use the Prepare Bank Answer File page to create a bank answer file. Select PeopleTools, EDI Manager, Monitor EDI Processing, Schedule Outbound EC Agent to respond to your bank by the deadline. If you don’t send the bank answer file to your bank, the bank assumes that you agree that the draft information is correct and pays your vendor.

Note. If the draft maturity date is earlier than or the same as the date specified in the bank file, the draft maturity date criteria are met.

See Also

Reconciling and Approving Drafts

Draft Statuses

This table describes the draft statuses:

The draft status determines the processing characteristics for the draft and also determines how the system generates accounting entries. Drafts in Payables have their own type of accounting entry because your cash account should not be credited immediately. When a draft is created, a temporary account (draft payable) is credited until the draft is due or reconciled.

The accounting entry template defines draft payables accounts (such as draft - normal and draft - fixed asset) because you can associate multiple accounts with one bank or bank account. Draft accounts are defined at the bank account or bank account payment level.

Payables assigns a document sequencing number to a draft whenever there is an accounting entry for a draft so that you can track the life cycle of the draft payment.

See Also

Running the Payment Posting Application Engine Process (AP_PSTPYMNT)

Understanding the Voucher Posting and Payment Posting Processes

Draft Accounting Entries

You run the Payment Posting process on the draft issue date to generate accounting entries for drafts with the Approved or Created status. If the draft issue date is earlier than or the same as the current date, then the Payment Posting process debits the AP liability account and credits the draft payable account. If the draft payment date (maturity date) is earlier than or the same as the current date, then the Payment Posting process debits the draft payable account and credits the cash account.

This table describes the accounting entries that are created as each accounting event occurs:

See Also

Accounting Entries for Draft Payments

Draft Accounting Entries for VAT

Value added tax (VAT) is recorded at draft payment posting if you enter a VAT declaration date on the invoice associated with the payment. The VAT amount is calculated based on the VAT rate that was effective on the invoice date.

This table shows the accounting entries that are generated when payments include VAT:

See Also

Accounting Entries for Draft Payments

Processing Value Added Tax (VAT) in Payables

Draft Write-Offs

After a draft has been approved and posted, but before the maturity date settlement, you can apply a write-off so that the maturity date settlement does not occur. Use the Draft Write-Off page to specify the write-off account and the write-off date. Payables does not delete drafts that are written off from the Payables system. When you run the Payment Posting process, it automatically creates accounting entries.

See Also

Writing Off Draft Payments

Running the Payment Posting Application Engine Process (AP_PSTPYMNT)

Draft Processing Limitations

Draft functionality has the following limitations:

• Draft processing functionality does not support the use of multiple bank layouts. During processing, if the system needs to split a scheduled payment, the system can only use the default layout code of the defined bank account payment method for the newly created scheduled payment.

• Drafts cannot be processed through the Financial Gateway.

See Also

Defining Payment Methods

Common Elements Used in This Chapter

Creating Drafts Manually

This section provides an overview of manual draft creation and discusses how to.

• Manually create draft payments.

• Review manually created drafts.

• Apply vouchers to manual drafts.

Understanding Manual Draft Creation

When you receive the draft (or draft notice for preapproved drafts), enter the draft on the Create Manual Draft page. The payment date is the draft due date. When you apply the draft to the appropriate vouchers, the scheduled due date, net due date, and payment method for each voucher are corrected to match the draft issue date, maturity date, and draft payment method. The vouchers are then marked as paid. With this process, you can apply multiple vouchers to a single draft.

Withholding on Manual Drafts

In Payables, you can calculate withholding at payment time or at voucher posting time by specifying a setting for the withholding entity. This withholding calculation setting appears by default on the voucher. If withholding for a voucher is set for calculation at payment time, users with the appropriate authority can override this setting to have withholding calculated at voucher posting time.

In the case of manual drafts, the system invokes the withholding calculation routine for any drafts applied to withholding-applicable vouchers. The withholding reporting tables are updated accordingly.

On the Manual Draft Creation page, you have the option of only applying manual drafts to vouchers that have already had withholding calculated at voucher posting time. If the Withholding Calculated field is selected (the default setting), the system allows you to apply manual drafts only to vouchers that are set to withhold at voucher post and that have been posted.

You can clear this check box, in which case the system allows you to apply manual drafts to all withholding applicable vouchers for the remit vendor, regardless of whether withholding has been calculated. The only exceptions are vouchers requiring withholding calculation at voucher post that have not been posted as yet. In this case, the system does not physically withhold, but it does update the withholding reporting table with the applicable withholding transaction amount for reporting purposes.

Pages Used to Create Drafts Manually

Manually Creating Draft Payments

Access the Manual Draft Creation page.

Enter the bank code and account information.

When you save manual drafts, the status of the draft varies depending on the values that you selected on the Payables Options - Payment Options page:

• If you selected the Draft Issue Approval Required check box, the status of the manual draft is Approved.

• If you did not select the Draft Issue Approval Required check box, the status of the manual draft is Created.

Note. After the system builds a draft worksheet, if you decide that you don’t want to create the manual draft, you can remove the draft worksheet by using the Delete Worksheets page. You cannot delete a draft worksheet if you have applied scheduled payments to the manual draft and saved the draft worksheet. After you have applied scheduled payments to the manual draft, you can cancel the manual draft payment by using the Cancel Manual Draft page.

See Also

Defining Vendor Bank Accounts

Reviewing Manually Created Drafts

Access the Manual Draft Entry page.

Enter the manual draft information.

Totals

Applying Vouchers to Manual Drafts

Access the Manual Draft Apply page.

Payment Amount	Displays the payment amount currently entered on the Manual Draft Entry worksheet page.
Total Applied	Displays the total amount of the scheduled payments currently applied to this manual draft.
Amount Left to Apply	Displays the difference between the manual draft payment amount and the total amount of the applied scheduled payments.
Refresh	Click to apply the selected scheduled payments to the manual draft and recalculate the total applied amount and the amount left to apply.

Note. Multiple views of this page are available by clicking the tabs in the scroll area.

Main Information

Select the Main Information tab.

Withholding Information

Select the Withholding Information tab.

Additional Info

Select the Additional Info (additional information) tab.

Managing Drafts

This section discusses how to:

• Cancel manual drafts.

• Delete posted manual draft worksheets.

• Approve unposted draft payments.

• Update draft information.

• Write off draft payments.

• Enter draft write-off details.

Pages Used to Manage Drafts

Canceling Manual Drafts

Access the Manual Draft Cancellation page.

Cancel Manual Draft/Payment

Select Payments

Deleting Posted Manual Draft Worksheets

Access the Delete WS (After Posting) page.

The search functionality of this page is similar to that of the Cancel Manual Draft page.

See Canceling Manual Drafts.

Select Payments

Approving Unposted Draft Payments

Access the Draft Approval page.

The draft payments must be created but not posted before you can access this page.

When the Pay Cycle process runs without the Preapprove option selected on the Draft Options page of the Payment Selection Criteria component, the draft payment is created with a status of Created. If you selected the Preapprove option, draft payments are created with a status of Approved.

SetID	Search by bank setID.
Selection Mode	Search by either: From Date/Thru Date: Searches by payment date range. From Ref/To Ref (from reference/to reference): Searches by a reference number range for drafts.
From Date	Enter the beginning date or reference number.
To Date	Enter the ending date or reference number.
Bank	Search by bank.
Payment Method	Search by payment method for the voucher. Select from ALL, Cust Draft (customer draft), EFT Draft (electronic funds transfer draft), or Vndr Draft (vendor draft).
Account	Search by bank account.
Draft Status	Search by current draft status. Drafts with the Approved or Created draft status can be posted when the Payment Posting process runs.

Total

Main Information

Select the Main Information tab in the Search Results scroll area.

Additional Info

Select the Additional Info tab in the Search Results scroll area.

See Also

Canceling Payments

Updating Draft Information

Access the Draft Info Update page.

Enter Selection

Enter the draft reference or the draft control ID.

Results

Writing Off Draft Payments

Access the Draft Write Off page.

Prerequisites

Available drafts have a status of Approved or Posted, but they have not yet reached the maturity date.

Results

Entering Draft Write Off Details

Access the Draft Write Off Details page.

Master ID	Displays the draft master identification number.
Creation Date	Displays the payment creation date.
Amount	Displays the amount and currency of the draft payment.
Account	Displays the bank account.
Account # (account number)	Displays the bank account number.
GL Unit (general ledger unit)	Displays the General Ledger business unit for the draft payment.
Write Off Acct	Select the account from which the draft payment is written off.
Alternate Acct (alternate account)	(Optional) Enter a statutory account.
Write Off Date	Specify the effective date for the draft payment write-off.

Reconciling and Approving Drafts

During bank reconciliation, reconcile the payment information with the actual bank remittance using the Draft Recon and Approval page. Before you can reconcile and approve drafts, you must have created draft payments in the Manual Draft Creation component (APD_MANDFT_SEL) or by running the Pay Cycle process. To import the bank file, select PeopleTools, EDI Manager, Monitor EDI Processing, Schedule Inbound EC Agent.

After reconciling your draft payments, you may want to submit a bank answer file to your bank regarding the draft payments.

Note. If you haven’t prearranged with your bank to receive a bank information file, you do not need to run the Draft Reconciliation and Approval process; however, you do need to run the Draft Reconciliation and Approval process to promote the draft status from C (created) to A (approved).

This section discusses how to:

• Reconcile drafts.

• Approve drafts during bank reconciliation.

• Review payment and bank details.

• Review draft payment exceptions.

• Review draft payment totals.

• Prepare bank answer files.

• Delete imported bank data.

Pages Used to Reconcile and Approve Drafts

Reconciling Drafts

Access the Draft Reconciliation page.

Creation Date	Displays the draft payment creation date.
Bank File Total	Displays the total amount of all payments listed in the transmitted bank file.
Reconcile	Click to match the bank file by selecting each draft payment and updating the status for all accepted drafts. The system displays the Draft Reconciliation and Approval - Draft Approval page, where you can review the matched draft payments.
Drawee Acct Num (drawee account number)	Displays the vendor’s bank account number.
Total Amount	Displays the total amount of the payment for the row.

Approving Drafts During Bank Reconciliation

Access the Draft Approval page.

Creation Date	Displays the draft payment creation date from the bank file.
Drawee Account Number	Displays the bank account number.
Pay Total	Displays the matched payment total amount.
Approve All	Click to approve all of the draft payments you select.
Unapprove All	Click to reverse the approval of selected payments that you previously approved.
Display Detail	Click to view the Payment/Bank Details page. This button is available only if you select the Detail check box.

Note. Multiple views of this page are available by clicking the tabs in the scroll area.

Main Information

Select the Main Information tab in the Draft Payment scroll area.

Additional Info

Select the Additional Info tab in the Draft Payment scroll area.

The scroll area displays payment method and cancellation information.

Reviewing Payment and Bank Details

Access the Payment/Bank Details page.

Source = AP

Source = Bank

Reviewing Draft Payment Exceptions

Access the Draft Exceptions page.

Note. Multiple views of this page are available by clicking the tabs in the scroll area.

Main Information

Select the Main Information tab in the Draft Exceptions scroll area.

Additional Info

Select the Additional Info tab in the Draft Exceptions scroll area.

The scroll area displays the reject code, a description, and comments.

Reviewing Draft Payment Totals

Access the Reconciliation Summary page.

Pay Total	Displays the matched payment total.
Partial Pay Total	Displays the partial payment total.
Reject Total	Displays the rejected payment total.
Total Amount	Displays the total payment amount.

Preparing Bank Answer Files

Access the Prepare Bank Answer File page.

Note. Multiple views of this page are available by clicking the tabs in the scroll area.

Main Information

Select the Main Information tab in the Bank Account scroll area.

Additional Info

Select the Additional Info tab in the Bank Account scroll area.

Deleting Imported Bank Data

Access the Delete Imported Bank Data page.

Reviewing Drafts

Payables includes several inquiry pages and reports that enable you to view and manage draft payments. You can define draft payment selection criteria that enable you to run inquiries on draft payments at various stages of the draft life cycle. By specifying a payment date range, you can also view draft payments details (by vendor or bank account) over a period of time.

The Draft Payment Inquiry component (PYMNT_DFT_INQ) shows the aggregate amount listed by sibling system draft identification number. This inquiry also shows a draft’s voucher payment schedule. You can view details by vendor, draft maturity date, payment amount, bank, draft master identification number, and subtotal by date.

This section lists common elements and discusses how to:

• Search for draft payments.

• View detail information for draft payments.

• View details for canceled or deleted draft payments.

• View a summary of the draft payments.

Note. Draft payments must have been created or have a status of approved, due, or reconciled before you can use the pages in the Draft Payment Inquiry component.

Common Elements Used in This Section

Pages Used to Review Draft Payment Information

Searching for Draft Payments

Access the Drafts - Selection Criteria page.

Vendor ID	Specify the from and to vendor IDs if an inquiry covers a range of vendors.
Bank SetID	Specify the bank setID.
Reference	Specify the from and to payment reference numbers if an inquiry covers a range of payment reference numbers.
Payment Date	Specify the from and to payments dates if an inquiry covers a range of dates.
Draft Status	Specify the draft payment statuses to include in the inquiry. Options are: ALL: Includes all draft payments, regardless of their status, as long as they meet the selection criteria. Approved: Includes only those draft payments with a status of Approved that meet the selection criteria. Created: Includes only those draft payments with a status of Created that meet the selection criteria. Due: Includes only those draft payments with a status of Due that meet the selection criteria. Reconciled: Includes only those draft payments with a status of Reconciled that meet the selection criteria.
Amount Rule	Specify the amount rule and enter an amount for the draft payments included in the inquiry. Options are: Any: Includes draft payments that meet the selection criteria in any amount. Equal to: Includes draft payments equal to the specified amount that meets the selection criteria. Greater than: Includes draft payments greater than the specified amount that meet the selection criteria. Greater than or equal to: Includes draft payments greater than or equal to the specified amount that meet the selection criteria. Less than: Includes draft payments less than the specified amount that meet the selection criteria. Less than or equal to: Includes draft payments less than or equal to the specified amount that meet the selection criteria.

Summary Options

Totals

Viewing Detail Information for Draft Payments

Access the Drafts - Draft Detail page.

Main Information

Select the Main Information tab.

Additional Info

Select the Additional Info tab.

See Also

Setting Up Draft Processing

Viewing Details for Canceled or Deleted Drafts Payments

Access the Drafts - Cancel/Delete Payment page.

Main Information

Select the Main Information tab.

Additional Info

Select the Additional Info tab.

Viewing a Summary of Draft Payments

Access the Drafts - Draft Summary page.