Advantages of creating payment order during payment run

[former_member316563]

Hi Experts,

I want to know if there is any advantage of creating payment orders during payment run rather than clearing the open items?

Or

In which scenario business prefer to create payment orders during payment run ?

Thanks & Regards

Satyajeet

[AmlanBanerjee · Accepted solution]

Hi Satyajeet,

During the execution of payment run, whether to go for payment order or for payment documents by clearing the open items, depends on the fact that how business wants to perform the bank reconciliation.

If buisness is willing to reconcile only after the payments have been realised physically, then you should go for payment orders.

Payment order is a three step process-starting with the creation of payment order through FPY1, creation of payment order lot through FP45 and creation of payment dishonors through FP09 (if any)

If you have payments from foreign currency, then Payment orders offer the following:

• When making payments in a foreign currency, the bank exchange rate can be posted.In contrast, if foreign currency payments are posted using the payment program, only those exchange rates defined in Customizing can be used. This usually necessitates additional exchange rate difference postings when the account statement is later posted and the cash receipt/cash disbursement accounts are cleared.
• Where a payment order is to be carried out at some time in the future, the line items are not cleared very much earlier than the date on which the payment is made.

Hope it helps..

Thanks,

Amlan