We are entering a program with our bank where we will generate a payment file which will then allow us to pre-fund debit/credit cards held by our vendors instead of a traditional physical check.

We were originally planning on setting up a separate Bank Relation and Payment Method and handling it the same as our regular check run with the exception of generating a file to send instead of physical paper checks. At the proper time we would clear that 'check' when the vendor took the money. While getting some setup in our development environment finished I noticed that there is an automatic payment toggle setting in the Maintain Payment Methods (tfcmg0140m000) session.

It sounds as this is an option we would take as we won't 'clear' the payment until initiated by the supplier when they 'charge' against the prefunded card.

Is anybody currently doing this or that understands what else needs set up for this type of payment method? I also need to talk debits and credits to understand the timing of when the payable and anticipated cash accounts are hit.

Thank you in advance for anybody that can provide any information. It will be greatly appreciated!

As per my understanding we can make use of Steps in Payment Method. You can make an anticipated payment and clear that using Reconciliation. In general if no step is selected, the payment will be done directly. If you select the last step, anticipated payment will be made which you can reconcile when actual clearing happens.

We are using the Anticipated payment step extensively. We are using it for all the payment methods, though we don't use it for Receipts.

It is defined like this.

Anticipated payment is the contra of the Supplier account and we have to define another Cash in transit account as the contra of the bank.

When we make the payments via the Compose payments, the posting generates a double entry that will Debit the anticipated account and credit the cash in transit.

Then when the Bank actually sends the bank statements, the user does a System Bank recon (in Baan it is Supplier reconciliation) and selects the original payment document and reconciles it. Here hs has an option of Rejecting or accepting the payment. Depending upon what the bank has done, he would do the same thing.

If he rejects the payment, then the oriiginal invoice is freed for payments again.
If he accepts the payments, then the original entry gets reversed and a new entry of debit supplier control a/c and credit bank account happens.

We can define the anticipated payments per Financial supplier group.
We can define the cash in transit per bank account transaction type.

This way we know the exact details while performing the monthly recon of AP to the GL.

Hope it helps. In case you need further info, pls let me know.

Regards