Direct Collateral System (DCS) is a collection system that enables a company which sells or provides service to a great number of customers/dealers to collect money automatically through a data procession network.
According to the billing address of the Main company sent to the bank via electronic environment, payments of the buyers are automatically collected by the Bank on their due dates on behalf of the Main Company and transferred to the Main Company accounts. All collection transactions are performed in electronic environment in this system. Banks can open overdraft account for dealers who entered DCS system and when accounts are not available payments are made within the assigned limits of dealers.
Direct collection limit, risk control method, DCS information of bank accounts (whether it is a DCS) are specified in the Bank Accounts widow in AR/AP browser > Related Records menu.
DCS: Indicates whether the bank account belongs to Direct Collateral System.
DCS Limit: This field is used to enter direct collateral limit.
DCS Total: Specifies the direct collateral total. When a sales invoice is made out with DCS payment type, the AR/AP bank branch's DCS total is increased which is selected in invoice payment lines. The method of risk control (in case DCS total exceeds DCS limit) is specified in DCS Risk Control field.
DCS Limit Control Type: Risk control method for direct collateral transaction is determined in this field. The options are:
- Proceed
- Warn User
- Block
When "Proceed" is selected, the risk limit is not controlled.
When "Warn User" is selected, in the event of exceeding risk limit when recording the transaction user is warned but if he wants to continue, the transaction is saved.
When "Block" is selected, in the event of exceeding risk limit the slip which belongs to transaction is not saved.
When Direct Debiting System (DDS) is used, bank undertakes to pay invoice amount. Therefore unpaid is not considered as inclusive of charge account risk, it is considered inclusive of DCS risk.
Payment Transactions With Direct Collateral
Whether an invoice's payment type is direct collateral or not is determined according to the followings:
- The account's (receivable/payable) payment type which is selected in invoice,
- The payment type specified in invoice,
- If Direct Collateral is selected as payment type in the relevant payment plan line.
If AR/AP Payment Type or Invoice's Payment Type is Direct Collateral:
If it is determined to make payments with DCS at Payment Type field of AR/AP card Business Info tab, when sales, purchase and return invoices are recorded payment transaction is recorded as DCS. Bank account code and AR/AP bank info must be entered for limit control. In AR/AP Info field of the payment lines of DCS type, bank accounts (specified as inclusive of DCS) are listed, and the required accounts are selected. AR/AP Bank Info is mandatory to save the slip.
The code of the bank account (specified as inclusive of DCS) of the AR/AP which is selected in invoice must match with the bank code of the bank account specified in payment/collection transactions. Otherwise the slip cannot be saved. This caution is taken to specify the bank account via which the collection (specified as inclusive of DCS) will be made.
When a sales/purchase invoice of which payment type is specified as DCS is generated, DCS total of the selected AR/AP's bank branch increases. If DCS total exceeds DCS limit, then the relevant parameter option selected for risk limit control applies.
If the risk control method is selected as "Warn User" in AR/AP definition, the application warns user with a message. In this case, user can continue the transaction or arranges the totals. If "Block" is selected, it is not allowed to make out the invoice.
When invoice due date is expired, the money order/EFT slip received from bank is recorded as payment slip. DCS field is selected as "Yes" in payment slip lines. It affects the DCS total field negatively for the bank code specified in AR/AP Bank Info. It is not required to reflect on the DCS limit, DCS field must be selected as "No" in DCS line.