Alternate Pre-Payment / Deposit process
This topic describes how an ITAS Entity can operate the alternative Pre Payment processes. The procedure is that ITAS creates a Request to a 3rd Party System to execute the deposit handling i.e. receive the cash. The processes enable cash to be received in different currencies with agreed Exchange Rate to the Invoice Currency. 3rd Party Middleware uses ITAS x APIs to secure the cash transactions in the ITAS records. These processes enable SINVGL to apply the non-Invoice currency cash with subsequent Sales Invoices. Non-Invoice currency prepayments require FX journals to be created in ITAS. Company setting ctrl30_j03prepayment = ‘N’ (N fo No Accounting)
Processes in SINVGL/PINVGL
Create Prepayment Request
Add Currencies to Receive/Pay
Use Cash on Final Invoices
Reversal of the above steps
Create Prepayment Request
Contracts with Prepayment terms are presented at the selection screen and may be included in the Prepayment Request. Standard Invoicing steps are followed in the Working Page. DOCDES Templates may be used to create Forms/Docs. Apply ‘Proceed’ in the Working Page screen and can then enter the optional currencies (other than the contract currency) with their rates of exchange to the contract currency. The optional currencies represent the currencies in which the cash may be paid/received. Cash may be paid/received in contract currency at all times.
When saved an alert is transmitted containing the Request
Technical
The request generates a phys18 row for each contract selected with type ‘N’. The row contains the reference (SC reference) , value in contract currency, date of creation.
Alert Reference ID 2-230 is in the Trading Notifications Category.
Add Currencies to Receive/Pay
Cash may be paid/received in any currency in addition to the contract currency but the option currency must be included in the Request. The inclusion can be made at the time of Request creation or at a later stage. The currencies/rates can be amended after cash has been used (paid/received) for the Prepayment but a used currency may not be removed.
When the currency details are changed an Alert is generated
Technical
The request generates a phys18 row for each optional currency entered with type ‘N’. The row contains the reference (SC reference) , the optional currency, the rate of exchange and rate of exchange type to contract currency. No value is assigned as the amount of each currency to receive is not known.
Alert Reference ID 2-231 is in the Trading Notifications Category.
Use of Cash on Final Invoice
The cash document will be received into ITAS from 3rd Party Middleware via ITAS API. The Cash accounting document will be generated and a prepayment row will be generated which will be visible in TRADE. When the cash has been posted it will be available to be applied on the goods invoice. The cash can be picked/part picked as already seen in SINVGL and PINVGL. The amount picked will be expressed in contract currency and the optional currency equivalent will be calculated pro-rata (both the optional currency cash amount and the contract currency equivalent amount are stored on the prepayment record).
The invoice document can list the prepayments using DOCDES rule [ppdets] repeat group which allows for the optional currency, optional amount, contract currency equivalent, cash document date and rate of exchange details to be displayed.
The accounting invoice is created and will include a client leg for each prepayment currency and a balancing client leg for the value not covered by prepayments. The client postings are split by currency value equivalent to allow Cash Matching to take place subsequently for the optional currencies and immediately for any cash that has been paid/received in contract currency. The prepayment cash in contract currency is matched against the invoice. The selected prepayments in optional currencies are converted into contract currency using the FX gains./losses account on FX journals. The original cash in optional currency is split to accommodate the usage. The original cash in optional currency and FX journals are not matched against the invoice at this time as neither the invoice nor the fx journals are posted items. Cash Matching can take place in MAT once the documents have been posted.
Technical
The Cash phys18 rows are created with a type of ‘X’. The row references the original request (phys18_prepaydoc) and will contain the contract currency amount (phys18_invval, phys18_fullval) and the optional currency amounts (phys18_altccy, phys18_altamt). The phys18_posted flag needs to be set (this happens in the posting process). When used the phys18_ppaplied value is updated. This value is shown in the TRADE/Prepayments report.
Example
Purchase Invoice created for $10,000
Prepayments used are $5,000 and £2,000 out of £3,000 with an exchange rate of 1.26 ($2520)
USD Invoice PI1700001
Seller.p $ 2,480.00cr
Seller.p $ 5,000.00cr Match Code ‘ABC’ in PINVGL
Seller.p $ 2,520.00cr Match Code ‘ABD’ in MAT
P&L $ 10,000.00dr
USD Prepayment CP1700001
Seller.p $ 5,000.00dr Match Code ‘ABC’ in PINVGL
Bank $ 5,000.00cr
GBP Prepayment CP1700002
Seller.p £ 2,000.00dr Match Code ‘ABE’ in MAT
Seller.p £ 1,000.00dr
Bank £ 3,000.00cr
GBP Currency Journal FJ1700001
Seller.p £ 2,000.00cr Match Code ‘ABE’ in MAT
FX Gains/Losses £ 2,000.00dr
USD Currency Journal FJ1700002
Seller.p $ 2,520.00dr Match Code ‘ABD’ in MAT
FX Gains/Losses $ 2,520.00cr
Reversals
Final Invoice
Reversal of the final invoice is possible if the FJ matching has been removed
The Invoice matching to prepayments is removed during the reversal process.
The invoice and accompanying FJ documents will be reversed
Prepayment Request
The prepayment request may be reversed if no cash has been paid or received against it. Upon reversal the phys18 rows matching the reversal document reference will be deleted.
Alert 2-232 is generated for a reversal