Use payment fees to do the following tasks:
- Specify if any additional charges are added to the vendor invoice. For example, a vendor might add a fee for issuing a promissory note or a company might be charged a vendor bank remittance fee.
- Define fee identifications, specify bank relations, and identify how to generate fees.
To create a payment fee, go to Accounts payable > Payment setup > Payment fee, and create a new record. You need to select whether to charge the Vendor or Ledger to use a financial cost for the fee in the Charge field. If Ledger is selected, select an account in the Main account field for posting in the ledger. You also should select a value for the Journal type field for which the fee is valid in the Journal type field. This journal type is typically Vendor bank remittance.
You can define a payment fee to set up lines for each fee used for different banks, methods of payment, remittance types, payment specifications, currencies, time periods, and amount intervals.
If the company agrees with the bank to specify the payment, select the payment specifications in the Payment specification field and select the currency that enables the fee in the Fee currency field. Only transactions with this currency can enable the fee. If you leave this field blank, all currencies enable the fee. Select whether the specification is a percentage or an absolute amount in the Percentage/Amount field.
If sales tax is calculated, the net amount is posted on a ledger account, and the sales tax amount is posted on a sales tax account. You can also enter fees for the selected payment fee setup line that depend on the interval between the remittance and due dates.
Scenario
Adventure Works Cycles electronically transfers invoice amounts (that are due to the vendor) to its bank. The bank then transfers the money directly into a vendor's designated banking account.
After the invoice amount is transferred, a paper remittance invoice is sent automatically to each vendor explaining the specific account the payment is posted to and the amount of the payment issued. To manage the payment fees from the bank, Adventure Works Cycles decides to set up payment fees for vendor invoices.