Applying credit memos to open invoices in the Payment Entry program without applying a payment

This section outlines the procedure to be used in order to apply a credit memo amount to an open invoice amount without applying a payment to the customer account at the same time.  This procedure is very similar to applying a credit memo while processing a customer payment, except that the payment amount will be zero and a special pay code must be used.

1.  Ensure that the Daily Startup Procedures have been successfully completed.

2.  Identify which customers have open invoice balances which need to be applied against each other and which invoices and amounts should be offset.  This information will normally be determined by reviewing an Accounts Receivable Aging report or through communications with the customer.

3.  Select the Cash Application program from the Accounts Receivable Menu and verify or change the information displayed by the program as required.

4.  Find the appropriate customer record using any of the several different methods which are available in the Cash Application program. 

5.  Enter the appropriate currency for the transaction (this will be the same as the currency of the invoices being offset), and enter CMAPPLY or a similar note in the check number field.  When a credit memo is applied in the Payment Entry program and a payment is not applied at the same time, the system will not create an AR check record but the information you enter into the Check Number field will be displayed in the invoice payment history programs.

6.  Verify or change the Pay Code to be used for the transaction.  The Pay Code field is used to indicate the type of payment being applied to the customer invoices and it must be set to the appropriate value based on the payment being made.  If you are applying credit memos against open invoices and are not applying a payment at the same time then you must select a pay code such as ADJ (adjustment) or ACM (apply credit memo) for the transaction.  These pay codes are set up with a type of ADJUST in the Transaction Code table.  The system will not allow you to process a transaction with a zero check or payment amount unless one of these special pay codes is selected.

7.  Load the invoices and credits to be processed into the program using any of the several different methods that are supported by the  Cash Application Program (Find Invoice, Insert, Find Invoice for Customer, Load all Invoices for Customer).

8.  Select the credit memo amounts which you would like to apply to the open invoices by highlighting the appropriate invoices and using the Zoom option to activate the Paytemp Detail Panel.  When the Paytemp Detail panel is activated the cursor will be positioned in the Amount to Apply window.  Once the Paytemp Detail panel is displayed, you may manually specify the amount of the credit to be applied (and any portions that should be written off).  The amount to apply should be preceded by a negative sign in this case. The  Cash Application program will update (increase) the amount displayed in the To Apply field by the amount of the credit that you have selected.

9.  Once the credit memo amounts from the remittance advice or Aging have been selected, you should apply the total amount shown in the To Apply field of the Payment Entry program to the appropriate open invoices and SAVE the transaction.


Processing Parent Company Payments