Payment Process Request Selects No Invoices
A payment process request is scheduled for 15 May in a US business unit. Supplier Northwind Traders has two sites. The HQ site uses payment method Check and a USD bank account. The EU site uses payment method Electronic and a EUR bank account. Invoice A is $12,000, invoice date 5 May, terms 2/10 Net 30, due 4 June, and is approved. Invoice B is EUR 8,000, due 20 May, is approved, and has no discount. The clerk creates a PPR with pay-through date 15 May, payment method Electronic, and the US operating bank account, which is set up for USD payments only. The PPR preview shows zero invoices selected. The clerk expected both invoices to be paid and also wants to capture the 2 percent discount on invoice A. The supplier has threatened to place the account on credit hold.
1. Why does the PPR select zero invoices? Consider pay-through date, payment method, currency, and disbursement bank account.
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Several selection criteria interact, and each invoice fails at least one test.
- Invoice A: due 4 June, which is after the 15 May pay-through date. It is normally excluded unless the clerk manually adds it to the PPR or changes the selection criteria. In addition, the HQ supplier site is set to Check while the PPR specifies Electronic, so the payment method does not match. The USD bank account is compatible with the invoice currency, but that does not overcome the due-date and payment-method failures.
- Invoice B: due 20 May, also after the 15 May pay-through date, so it is excluded on timing. The EU site uses Electronic, which matches the PPR, but the EUR currency does not match the USD-only disbursement bank account. The invoice also needs a EUR-capable bank account or a payment method that supports the currency.
A zero selection is therefore expected. The clerk should not assume the PPR is broken. The next step is to decide which invoices are actually intended for this run, then align the pay-through date, payment method, supplier site, currency, and disbursement bank account.
2. How should the clerk capture the 2/10 discount on invoice A, and should the company take it?
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Invoice A is due 4 June, so a PPR with pay-through date 15 May will not select it automatically. The clerk can manually add invoice A to the PPR, set the payment date to 15 May or earlier, and confirm that the discount is taken. The supplier site also needs a payment method that is valid for the chosen disbursement bank account, for example Electronic with an EFT-capable USD bank account, or Check if the company still issues checks.
Discount arithmetic: 2 percent of $12,000 = $240. Paying $11,760 on 15 May instead of $12,000 on 4 June means paying 20 days early to save $240. Annualized, that is roughly ($240 / $11,760) x (365 / 20) = about 37 percent. That is an attractive return if the company has the cash and the invoice is valid. If cash is tight, the treasury decision may differ, but the discount should not be lost because of a PPR setup mistake.
The clerk must verify that the payment date is on or before the discount date. If the payment is dated after 15 May, the discount is lost. The discount should be taken on a valid invoice, not as an offset against a disputed amount.
3. What supplier-site and payment-setup changes are needed so future PPRs select the right invoices?
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Align master data and PPR criteria before the next run.
- Supplier site payment method: set the HQ site to the method actually used for payment, such as Electronic for EFT, rather than Check if checks are no longer issued. Set the EU site to Electronic and confirm that its EUR bank account is active and valid for the payment method.
- Disbursement bank account: use a bank account that supports the currency being paid. A USD-only account cannot pay a EUR invoice through the normal flow.
- PPR criteria: choose the correct pay-through date for the invoices intended. Use manual addition for invoices that are being paid early to capture a discount.
- Payment terms: verify that discount dates and due dates are calculated correctly from the invoice date.
- Validation: run a PPR preview before the scheduled date and investigate excluded invoices rather than assuming they will be picked up later.
These changes prevent the same zero-selection outcome and reduce the risk of a supplier credit hold caused by a configuration mismatch rather than a cash decision.