Normal Payment

Overview

The System will identify and present Payments already made and future Payments to be honored by the government to a Vendor or Service Provider on a government sanctioned Contract based on the contractual requirements. For example, if the Project life cycle runs for a period of 18 months and the related Contract calls for Payments to be made on three installments. The application captures this information displaying the Payment sums and related dates along with all pertinent Project information and details.

Payments can be planned and scheduled according to Contract details. Payment authorization can be done after receiving the invoice from the Vendor, having the Good/Service/Work received and accepted; Inspection (or assessment report when applicable) and the Payment is according to the Payment schedule.

The System controls Payment Advances and Payment Retentions with maximum limits according to different items or activities within the Contract.

Payment Tracking of Contracts are available based on Planned Payments and Payments already made.

This screen contains the collection of Contract Payments. It includes Planned Payments, Payment Advances, and Completed Payments.

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Contract Management►Normal Payment

Normal Payment screen fields

Field	Description
Id	Unique identifier for the Payment
Workflow Status	Payment Status possible values are: Planned, Completed, Approval Requested, Approved, Cancelled. Default value is Planned.
Payment Type	Payment Type may be: Normal Payment or Payment Advance.
Planned Date	Planned date for Payment.
Document Date	Date of the Vendor document/invoice or reference date of the approval document.
Managed Contract	Contains contract and information such as: Payment Amount, Line Item, Payment Details, etc.
Offset Code	Used to associate all the costs related a particular Contract Payment. This attribute is mandatory for any Payment when it is completed.
Treasury Bank Account	Bank account used for the Payment.
Amount	Payment Amount of the Contract. Amount is in the same currency as the Contract.
Deductions Amount by Payment Advance	Amount corresponding to deductions because of Payment Advances made previously. This amount is System auto-generated.
Deductions Amount by Payment Retention	Amount corresponding to Deductions because of active Payment Retentions. This amount is System auto-generated.
Payment Retention	The value in this attribute is to be selected at the time of creating Normal payment against the Payment Retention.
Document Number	Number of the Vendor document/invoice or reference number of the approval document.
Payment Responsible	Employee who is responsible for a Payment.
Payment Method	Payment Method such as: Cash, Check, Transfer, etc.
Funding Source	Funding Source for Payment. For example; Donations, Government, etc.
Final Amount	Final Payment Amount = Original Payment Amount - Deductions + Exchange Rate Conversion. Final amount is a monetary value in the domestic currency of the client.
Language	Language used.
Comments	Any comment from the user about the Payment.

Payment Detail

Overview

Each payment can be detailed into a collection of sub-payments each one associated with a Drop.

Also each Payment Detail has a paid amount. This is necessary because a same Drop can be paid in different Payments according to its current Physical Progress in the Payment moment. The sum of amounts of all Payment Details will be the same to the Payment Amount to which they belong.

Payment Detail screen fields

Field	Description
Amount	Amount corresponding to the Payment Detail.
Line Item	Line Item to which the Payment is corresponding.
Drop	Drop associated to the specific Line Item.
Deduction Amount by Advance	Specific deduction from Payment Amount relating to Advance Payment.
Deduction Amount by Retention	Specific deduction from Payment Amount relating to Payment Retentions.
Language	Language Used.
Comments	Brief Description of Payment detail.

Drops and Payments Association

During the registration of Planned Payments and/or Payment Advances one or more Drops can be associated with a Payment through the Payment Detail screen (refer to Payment Detail for more information).

The association between Drops and Payments is established in the Payment Detail screen. When a Payment Detail is created, the Line Item and Drop information must be entered (refer to Create a Payment Detail for more information).

When Associating Drops and Payments:

One or more Drops may be associated with a single Payment.
A Drop may be included in several Payments, in order to pay different Drop progresses or cover different Drops in a single Payment.
A Payment can include Drops of different Line Items (or Activities) of a Contract.

The Association between Payments and Drops is illustrated below:

Validation and Business Rules for Drops and Payment Association

The Validation of Valid Drops Status for Association with Payments is executed by the System through the Validate Payments Against Drops parameter (refer to Contract Management System Parameters for more information).

IF Validate Payments Against Drops is true:
- The System will validate each Payment (amounts and status) against associated Drops. The System will validate the association between Drops and Payments.
IF Validate Payments Against Drops is false:
- The System will not validate any association between Payments and Drops.

When a Payment is planned (see Create a Normal Payment for more information. Please note that Create an Advance Payment is identical to Create a Normal Payment) the user can associate one or more Drops with the Payment through the Payment Detail screen (refer to Payment Detail for more information). The associated Drops can have any status EXCEPT Cancelled (refer to Contract Line Item Drops for more information).

When a Payment is Completed (refer to Complete/Make a Normal Payment for more information. Please note that Complete/Make an Advance Payment is identical to Complete/Make a Normal Payment):

IF Payment Type is Normal Payment:
- All associated Drops must have at least the status In Execution (or Received, Approval Requested or Accepted). At any of the stages mentioned the Drop Amount and other Drop attributes cannot be changed anymore (refer to Workflow Transition for Contract Line Item Drops for more information).
IF Payment Type is Payment Advance:
- The associated Drops can have any status EXCEPT Cancelled (refer to Workflow Transition for Contract Line Item Drops for more information.

Payment Amounts against Drops Amounts

The validation of Payments against Drops is executed by the System. This validation only applies if the Validate Payments Against Drops Parameter is true and if the Payment Type is a Normal Payment (refer to Contract Management System Parameters for more information).

The Payment Amount is validated when the Payment is detailed, this occurs when the Payment is associated with one or more Drops (refer to Payment Detail for more information).

Once a Normal Payment is Detailed the System will perform the following three validations:

Note: All three validations below must occur in order to for the System to Register the Payment.

The System will validate the Current Physical Progress:

The Payment Detail Amount cannot be greater than Drop Amount multiplied by the Current Physical Drop Progress, the Formula used is: Payment Detail Amount <= (Drop Amount * Drop Physical Current Progress). Refer to Payment Detail and Contract Line Item Drops for more information.

Note: The Physical Drop Progress depends of Goods/Services Receive Notes (GSRN) or Inspections if GSRN are not utilized. (Refer Updating Drop Progress through GSRN (Goods/Services Receive Notes) or Register a Complete Inspection for more information).

Note: The System will do this validation when Payment is COMPLETED (refer to Complete/Make a Normal Payment or Complete/Make an Advance Payment for more information).

The System will validate the Maximum Tolerance: Maximum Tolerance for Payment Amounts is a System Parameter (refer to Contract Management System Parameters for more information).

The Payment Detail Amount (refer to Payment Detail) cannot be greater than Drop Amount (refer to Contract Line Item Drops) according to the Current Physical Progress/Delivery plus Maximum Tolerance.

Note: This validation only applies for partial Payment and is performed twice, when a Payment is Planned and Completed (see Workflow Transitions for Normal Payments).

The System will validate the Amount Currently Paid: This validation includes Payments that are already made to a Drop. The System Sums: the amounts (refer to Payment Detail) of all the Payments already made (Payment status equal to Approved). This Sum plus amount of the present Payment cannot be greater than Drop Amount (refer to Contract Line Item Drops for more information).

Workflow Transitions for Payments

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Overview

The Payment screen contains the collection of Contract Payments. It includes Planned Payments, Payment Advances, and Payments already completed. Payments have a specific workflow that enables a Drop to move from the Planned to the Approved stage. Illustrated below is the Payments Workflow:

The following workflow transitions are manual transitions. Below is a table with the Manual Workflow Transitions illustrated above. This table indicates the transition name, transition type, previous status required, and the next status of a Payment:

Transition Name	Transition Type	Previous Status	Next Status
Prepare Payment (enter information)	Manual	None	Planned
Complete or Make Payment	Manual	Planned	Completed
Request for Approval	Manual	Completed	Approval Requested
Approve	Manual	Approval Requested	Approved
Reject	Manual	Approval Requested	Completed
Cancel	Manual	Planned, Completed, or Approval Requested	Cancelled

Complete/Make a Payment

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Overview

Completing a Payment to a Vendor involves changing the status of a Payment from Planned to Completed. This process can be done by a user with the appropriate authority.

When an authorized user completes a Payment, the System will show a screen in which the following information is required: Document Number, Payment Method, Comments, and Comments (in Payment Details). Within the same screen, the System will calculate and show the Final Payment Amount.

The System will show the following Contract attributes: Payment Amount, Deduction Amount by Payment Advances, Deduction Amount by Payment Retention(s), Payment Detail Amount and Final Payment Amount.

The System will execute the following Validations:

Valid Drops Status for Association with Payments
Payment Amounts against Contract Amount
Payment Detail Amounts against its Payment Amount
Payment Amounts against Drops Amounts

To COMPLETE/MAKE a Payment, follow the steps below:

1. OPEN the Payment you wish to set as Completed.

Note: By default, users defined to oversee setting Payment to Completed will receive an Internal Message:

Open the message by selecting it; this will open a new window:

Select the Lookup icon on the new window to locate the Payment you wish to set to Completed.

Or, you can navigate to the module and search for the Payment you wish to set to Completed. To do this, go to Step 3 below.

Find the Payment which you would like to change status to Completed (see details in Searching for Records or Elements in the APPENDIX).

Note: In order to set a Payment as Completed, the previous Payment status must be set to Planned.

Note: Once the Payment is set to Completed, the next status for the Payment may be Approval Requested or Canceled (refer to Workflow Transitions for Payments for more information).

Select Completed from the drop down list in the Transition field:

A Transition window will be displayed confirming the Transition. Add a description in the Step Note in the Transition window:

Click on the Finish icon to complete the Transition transaction, or click the Discard icon to abort the Transition.
Upon clicking the Finish icon a window will be displayed confirming the Payment Workflow Transition was executed:

Click Ok on the Workflow Transition Executed window. The Payment status is now set to Completed:

Request Approval for a Payment

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Overview

To REQUEST APPROVAL for a Payment, follow the steps below:

Find the Payment which you would like to change the status to Approval Requested (see details in Searching for Records or Elements in the APPENDIX).

Note: In order to Request Approval for a Payment, the previous Payment status must be set to Completed.

Note: Once Approval is Requested, changes to Payments are no longer permitted.

Note: After Approval is Requested, the next status for the Payment maybe set to Approved or Cancelled (refer to Workflow Transitions for Payments for more information).

Select the Payment you would like to Request for Approval.
Select Request Approval from the drop down list in the Transition field:

A Transition window will be displayed confirming the Transition. If necessary, add a description in the Step Note in the Transition window:

Click on the Finish icon to complete the Transition transaction, or click the Discard icon to abort the Transition.
Upon clicking the Finish icon a window will be displayed confirming the Payment Workflow Transition was executed:

Click Ok on the Workflow Transition Executed window. The Payment status is now set to Approval Requested:

Approve a Payment

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Overview

Approving a Payment involves changing the Payment status from Completed to Approved. Once the Payment status change to Approved is completed, the System will update Payment Progress for all the Drops involved in the Payment (refer to Update of Payment Progress process for more information).

If the Financial Accounting System Installed parameter is set to true, the System will associate a financial transaction (expense voucher) to the FreeBalance Financial Accounting System (refer to Contract Management System Parameters for more information).

To APPROVE an Approval Request for a Payment, follow the steps below:

Note: By default, users defined to oversee setting Payment to Approve will receive an Internal Message:

Open the message by selecting it; this will open a new window:

Select the Lookup icon on the new window to locate the Payment you wish to set to Completed.

Or, you can navigate to the module and search for the Payment you wish to set to Completed. To do this, go to Step 3 below.

Find the Payment which you would like to change the status to Approved (see details in Searching for Records or Elements in the APPENDIX).

Note: In order to Approve a Payment, the previous Payment status must be set to Approval Requested.

Note: Once the Payment Request for Approval is Approved, no further modifications can be made to a Payment (refer to Workflow Transitions for Normal Payments for more information).

Select Approve from the drop down list in the Transition field:

A Transition window will be displayed confirming the Transition. Add a description in the Step Note in the Transition window:

Click on the Finish icon to complete the Transition transaction, or click the Discard icon to abort the Transition.
Upon clicking the Finish icon a window will be displayed confirming the Payment Workflow Transition was executed:

Click Ok on the Workflow Transition Executed window. The Payment status is now set to Approved:

Update of Payment Progress

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Overview

Upon approval of a Payment, the Drops involved in the Payment are updated according to their Payment Progress (refer to Approve a Normal Payment for more information). The Updated Payment Progress information will be used by the System to track Payments.

The following attributes, relating to the Contract Payment Progress, will be automatically Updated:

Drop Payment Current Progress: As a Drop may be paid through several Payments, the following formula is used: Drop Payment Current Progress = Sum of (Payment Detail Amount / Drop Amount).

Note: The Sum of Payment Detail Amount will include Approved Payments which include the Drop (refer to Contract Line Item Drops for more information).

Line Item Payment Current Progress: Is updated by the System with the following formula: Line Item Payment Current Progress = Drop Prorated Cost of Total * Drop Payment Current Progress.

Note: The Line Item Payment Current Progress includes Drops that belong to the Line Item (refer Line Item for more information).

Contract Payment Current Progress: Is updated by the System with the following formula: Contract Payment Current Progress = Sum of (Line Item Prorated Cost of Total * Line Item Payment Current Progress).

Note: The Contract Payment Current Progress formula uses all the Line Items belonging to a Contract (refer to Managed Contract for more information).

Reject a Payment

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Overview

To REJECT an Approval Request for a Payment, follow the steps below:

1. OPEN the Payment you wish to Reject.

Note: By default, users with authority to Reject a Payment will receive an Internal Message:

Open the message by selecting it; this will open a new window:

Select the Lookup icon on the new window to locate the Payment you wish to Reject.

Or, you can navigate to the module and search for the Payment you wish to Reject. To do this, go to Step 3 below.

Find the Payment which you would like to change the status to Rejected (see details in Searching for Records or Elements in the APPENDIX).

Note: In order to Reject a Payment, the previous Payment status must be set to Approval Requested.

Note: Once the Payment has been Rejected, the Payment status will change back to Completed (refer to Workflow Transitions for Normal Payments for more information).

Select Reject from the drop down list in the Transition field:

A Transition window will be displayed confirming the Transition. Add a description in the Step Note in the Transition window:

Click on the Finish icon to complete the Transition transaction, or click the Discard icon to abort the Transition.
Upon clicking the Finish icon a window will be displayed confirming the Payment Workflow Transition was executed:

Click Ok on the Workflow Transition Executed window. The Payment status is now changed back to Completed:

Cancel a Payment

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Overview

To CANCEL a Payment, follow the steps below:

1. OPEN the Payment you wish to Cancel.

Note: By default, users defined to close a Payment will receive an Internal Message:

Open the message by selecting it; this will open a new window:

Select the Lookup icon on the new window to locate the Payment you wish to Cancel.

Or, you can navigate to the module and search for the Payment you wish to Cancel. To do this, go to Step 3 below.

Find the Payment which you would like to change the status to Cancelled (see details in Searching for Records or Elements in the APPENDIX).

Note: In order to Cancel a Payment, the previous Payment status must be set to Planned, Completed, or Approval Requested (refer to Workflow Transitions for Payments for more information).

Select Cancel from the drop down list in the Transition field:

A Transition window will be displayed confirming the Transition. Add a description in the Step Note in the Transition window:

Click on the Finish icon to complete the Transition transaction, or click the Discard icon to abort the Transition.
Upon clicking the Finish icon a window will be displayed confirming the Payment Workflow Transition was executed:

Click Ok on the Workflow Transition Executed window. The Payment status is now set to Cancelled: