How does the system determine a payment medium format?

[petermeid]

Dear all,

a colleague and me, we are trying to analyze how the system determines the payment medium format for a supplier payment. But unfortunately we don’t reach. Here what we configured:

In the fine-tuning-activity Global Settings for Payment we prioritized the payment methods as in appendix in file_1.png. Highest priority is determined to the payment method 23 - SEPA Credit Transfer.

We didn’t touch the fine-tuning-activity Outgoing Bank Transfers.

For our bank we added – among others - the payment formats SEPA Credit Transfer, DE DTAUS0 Domestic Payment (see details in appendix in file_2.png).

The payment methods assigned to our bank account are: Domestic bank transfer, Check printing, SEPA Credit Transfer, International bank transfer, SEPA Direct Debit.

When paying a domestic supplier by outgoing bank transfer the system creates a payment file with the payment medium format SEPA Credit Transfer. That’s exactly what I expected due to the priorization of payment method 23 - SEPA Credit Transfer and the payment format SEPA Credit Transfer in my bank.

Then I added the payment format ISO20022 Payment Format at the lowermost position of the payment formats of my bank. No more changes to any settings. From this moment on the system creates a payment file with the payment medium format ISO20022 Payment Format when doing a supplier payment in the same way to the same supplier as before.

How does the system determine the payment medium format? Why does it prioritize the ISO20022 Payment Format over the SEPA Credit Transfer as soon as it is listed in the payment formats of my bank?

Additionally it would be great if someone would describe the interaction between the settings in the fine-tuning-activity Outgoing Bank Transfers (there: configuration of payment correspondence profile, payment medium format and the dependent assignments), those of the fine-tuning-activity Global Settings for Payment (there: Prioritize payment methods), the payment formats of the bank’s master data and the assigned payment method of my bank account? Unfortunately the documentation doesn't.

And perhaps a last question: Is there a difference between a payment format (see bank master data) and a payment medium format (see fine-tuning-activity)? Or is this just an unclean usage of terms?

Thanks a lot for your support.

Best Regards

Peter Meid

All for One Steeb AG

[Andie]

Hi Peter,

I'm facing an issue similar to yours. My customer needs to use 2 different formats, SEPA for payments across Europe and ISO20022 for International Payment.

At the moment, in order to generate these formats, we change the format in the master data of the bank with the payment format we need to use. Meaning that when we need to a SEPA file, we go on the Bank MD and add SEPA file, when we need to issue a ISO20022 we go on the bank MD and change SEPA for ISO20022 and so on...  It is a workaround, but, yeah, it is absolutely not convienient .

I am wondering if you have found any other workarounds ?

Thank you for attention,

Andréanne

[petermeid]

Hi Andreanne,

unfortunately not, we didn't investigate on different work arounds.

BR

Peter

[Andie]

Hi Peter,

Thank you for your prompt answer, I guess I will have to be creative on this one

Cheers,

Andréanne

[frank_jahnigen]

Hi Andreanne,

We have reproduced the described scenario. (DE-Company, DE-Supplier, US-Supplier).

Prerequisites are a concise Payment Method definition in the Bank Account MD (no redundant payment methods), definition of pertinent SEPA format and ISO20022 under Payment Formats in the house bank's MD, definition of suitable payment method (e.g. Bank Transfer) in the supplier's MD.

In the Business Partner MD sufficient definitions have been made identifying a supplier as Foreign, third party; country etc.. Depending on applied business processes other configurations as 'Prioritize Bank Accounts and Payment Methods' might have to be considered as well. We create a Payment Run for a sufficient selection of payables and don't Execute Payments Automatically. In the Payment Proposal List / multi-select /  Actions: Edit Proposal, we can modify house-bank data if necessary.  We've executed Payment Media Runs and defined specific formats / e.g.: ISO20022 Payment Format. Payment Method Details: e.g.: International Bank Transfer. The same for SEPA. Following the the Payment Method/Format Country Mapping - e.g. 'SEPA Credit Transfer' would be grouped to European countries according to the SEPA area. ISO20022 does not exhibit such a grouping and is therefore a candidate for international bank transfers. After execution, separate files in format ISO20022 and SEPA will be created for the same house bank account and suppliers in the US and the EU(DE) respectively. Also without execution of the payment media run - files should be created in the desired format when their creation is triggered manually.

In case you continue experiencing this situation we would ask to create an incident referencing this SCN-thread.

Thanks,

Frank

[frank_jahnigen]

Hi Peter,

Can you illustrate why there's a requirement to maintain 2 'competing' XMl formats for a house-bank account for domestic or EU-transfers. Both payment medium formats differer in their respective XML versions.

ISO20022 Payment Format:           iso:20022:tech:xsd:pain.001.001.03

SEPA Credit Transfer:                    iso:20022:tech:xsd:pain.001.002.03

Which format is expected also depends on localization-specific requirements. According to our information for Germany for example, the standard is "iso:20022:tech:xsd:pain.001.002.03".

Would it be an option to opt for a single SEPA format here - which would facilitate an unambiguous payment-format selection?

Best regards,

Frank

[lokesh2]

Hi Peter,

Things to check

1. Check in which Priority you have assigned the Payment Media Format in the House Bank

2. For the same series what is the payment methods assigned in the House Bank > Payment methods

If the payment media format SEPA then if the supporting payment method is not in the same sequence then system will try to find the next payment method and finally system will also check the payment method and now the payment format, if the format supports the payment method which system choosen then it will be picked & if not system will choose that sequence which supports both payment media format & payment method.

Thanks

Lokesh Sharma

[petermeid]

Hi Lokesh,

I think it is not possible to prioritize the payment media Format in the House Bank. That was the thing I was looking for, but which I did not find.

The tab Payment Formats in the house bank's master data is just a list - without priorization. (see Appendix file_2.png)

Regards

Peter

[lokesh2]

Hi Peter,

Kindly refer to this use case and check if have similar scenario

Find this case document < 1855481 - System Proposes Unexpected Payment Medium Format When Doing Outgoing Bank Transfer >

Let me know if this works or not.

Thanks

Lokesh Sharma

[petermeid]

Hi Lokesh,

I know about that issue, but unfortunately this is not my use case. I need to know the logical steps, the system does when determining a payment medium format for a payment.

In my case: SEPA Bank Transfer has 1st priority in the fine-tuning-activity Global settings for Payments. To my mind that means: Each time, I pay from an SEPA-participating county to another SEPA-participating county the system checks if a SEPA Bank Transfer file can be created.

In the bank's master data the payment format SEPA Credit Transfer is set. As long as I do not add ISO20022 al valid payment format in the bank's master data, the system in fact creates a SEPA Bank Transfer file.

But once I add ISO20022 as payment format in the bank's master data it creates a ISO20022 file for the same payment, allthough I did not change anything more.

My issue is:

• The payment method SEPA Credit Transfer is valid for both payment formats
• Both paymant formats are valid for the bank

Why does it create the ISO20022? What are the logical steps for determining the payment file format?

Thanks!

Best Regards

Peter

[lokesh2]

Hi Peter,

Did you assign these payments formats to same My Bank/Bank accounts ?

Which bank account system picked and what is the sequence for it in the payment media format & payment methods in the Liquidity Management ?

We feel this is purely system determined during the payment proposal. If the liquidity of the bank account in question is lesser than this would check for other bank account and also determines the payment media format from the switchover bank account.

If system is picking diff bank account for testing can you block the remaining and try to execute the payment to check the result ?

If these things doesnt work, can you please report an incident so that we have check in the system and the payment you are referring to.

Thanks

Lokesh Sharma

[petermeid]

Hi Lokesh,

Thank you! I add my remarks after each quote below:

Lokesh: Which bank account system picked and what is the sequence for it in the payment media format & payment methods in the Liquidity Management ?’

Peter: The system always picked the same bank account. And, yes, as I describe before I assigned:

• 1^st scenario: payment format SEPA Credit Transfer assigned (and some more which are not relevant for the issue - see below) to the same house bank  => resultt: SEPA-file
• 2^nd scenario: payment formats SEPA Credit Transfer AND ISO20022 (and some more which are not relevant for the issue - see below) assigned to the same house bank  => result: ISO20022-file
• For both scenarios: Payment method SEPA Credit Transfer assigned to the same bank account

Lokesh: ‘Which bank account system picked …?’

Peter: The same account in both scenarios!

Lokesh: ‘…what is the sequence for it in the payment media format & payment methods in the Liquidity Management  ’

Peter: See the setting al follows:

• Sequence of Payment formats assigned to house bank (once again: As far as I know there is no priorization in that sequence)
  • 1^st senario
    1. SEPA Credit Transfer
    2. DE DTAUS0 Domestic Payment
    3. Check Payment
    4. DE DTAZV Foreign Payment
    5. SEPA Direct Debit
  • 2^nd scenario
    1. SEPA Credit Transfer
    2. DE DTAUS0 Domestic Payment
    3. Check Payment
    4. DE DTAZV Foreign Payment
    5. SEPA Direct Debit
    6. ISO20022 Payment Format
• Payment methods for the bank account (once again: As far as I know there is no priorization in that sequence):
  • In both scenarios
    1. Domestic bank transfer
    2. Check printing
    3. SEPA Credit Transfer
    4. International bank transfer
    5. SEPA Direct Debit

Lokesh: ‘We feel this is purely system determined during the payment proposal. If the liquidity of the bank account in question is lesser than this would check for other bank account and also determines the payment media format from the switchover bank account.’

Peter: ‘There is no issue concerning low liquidity or anything else. I tried it several times and the difference of the system’s behavior only depends on adding the payment format ISO20022 to the house bank's master data. If added, the system creates an ISO20022 File, if not added, it creates a SEPA Credit Transfer File. Settings of the bank account are:

• Minimum account: -200.000
• Maximum account: 9.999.999
• Overdraft limit: -200.000
• Cash position of that account ID: Closing Cash Balance: 5.715.279’

At the moment I have no incident. But for a customer’s project we are just implementing I need to understand the interaction between the settings in the fine-tuning-activity Outgoing Bank Transfers (there: configuration of payment correspondence profile, payment medium format and the dependent assignments), those of the fine-tuning-activity Global Settings for Payment (there: Prioritize payment methods), the payment formats of the bank’s master data and the assigned payment methods of my bank account? Unfortunately the documentation doesn't.

Thanks a lot for your support, and best Regards

Peter

[HarshalVakil]

Hello Peter,

For the payment methods in bank account has no specific priority sequence. But system checks from the top and moves on further till the correct format is found.

As per your comment :

• Payment methods for the bank account (once again: As far as I know there is no prioritization in that sequence):
  • In both scenarios
    1. Domestic bank transfer
    2. Check printing
    3. SEPA Credit Transfer
    4. International bank transfer
    5. SEPA Direct Debit

Hence when ISO20022 Payment Format is not added (First scenario),

System checks Domestic bank transfer then check and then SEPA Credit transfer.

With SEPA Credit transfer system finds the correct payment medium format and creates the same.

When ISO20022 payment format added (Second Scenario)

System checks fro Domestic Bank transfer and find the correct medium here it self So the file would be created with ISO20022.

Can you try :

• Payment methods for the bank account
  1. SEPA Credit Transfer
  2. Domestic bank transfer
  3. International bank transfer
  4. SEPA Direct Debit
  5. Check printing

This should work.

Also

Please check help center :

1) Banks and Bank Accounts

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Payment Formats

You select the allowed payment formats used for payments made from bank accounts held at this bank. You can choose the payment format(s) used for payments made from this account. This is the allowed payment file format such as bank transfer or direct debit. The payment methods available for the bank account are derived from the payment formats you select for the bank. The available payment formats are displayed in a list. Only those formats delivered with the system can be used. For more information see Electronic Payment Formats.

2) Manual Payment Formats

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Payment Format Prioritization

The system prioritizes the payment formats delivered with and those defined in the system. It only uses the manual payment format when a particular payment format cannot be determined and the manual payment format is allowed for the bank. Manual payment format can also be required, for example, if the currency does not match the payment format otherwise used for the account.

Regards,

Harshal

[lokesh2]

Hi Peter,

As i told before to my understanding , as said before For the payment media format SEPA then will try to find the supporting payment method and if it is not in the same sequence then system will try to find the next payment method and finally system will also check the payment method and now the payment format, if the format supports the payment method which system choosen then it will be picked & if not system will choose that sequence which supports both payment media format & payment method.

Bring the payment method in the 1st sequence and then try.

Thanks

Lokesh Sharma

[petermeid]

Hi Harshal,

as per your advice I tested:

Can you try :

Payment methods for the bank account 

SEPA Credit Transfer
Domestic bank transfer
International bank transfer
SEPA Direct Debit
Check printing




This should work.

Unfortunately not, I still get an ISO20022 file.

Best Regards

Peter