Automatic Cash Application - ACA Programs

This procedure is used when you receive information about customer payments in electronic form and wish to use this information to apply the customer payments to the specified accounts receivable invoices automatically.  Note:  This procedure uses both standard programs and custom (customer or bank specific) programs during processing.  You should not attempt to automatically apply cash until the appropriate programs have been installed and configured by Cove Systems personnel.

1.   Copy the file received from the bank to the user directory of the operator who will be running the automated cash application programs.   It is suggested that you copy the file once using the original name (in case the file is needed for research at a later time), and once as  ACA.NEW is the default input file name that is used by the automated cash application programs.  The file will be overwritten each time you copy the current file from the bank into your local directory.  The original bank files can be retained until you have verified that the bank deposits have been correctly posted to the system and that you no longer need the files for research purposes.

2.   Select the automated cash application program from the menu.  You will be prompted with the following information – which you can accept or change as required.

Bank Account Autopost:  The autopost number of the cash account into which the cash was received).  This information defaults based on the setting of F248: ACA-BANK

Default AR Account Autopost: The autopost number of the accounts receivable control account This information defaults based on the setting of F248: ACA-AR and it is used to determine which AR account should be adjusted when the AR account is not specified in the invoice being processed, or in the customer record for the customer that an invoice is being created for (if the invoice or the customer are assigned to a specific autopost – that autopost number is used as appropriate).

Post Date:  The date that should be used as the Post Date in the Accounts Receivable check records and journal entries that are created by the program.  This date is normally set to the date on which the bank processed the deposit.

New Data Input File Name:  The name of the input file to be processed.  The file name defaults to but may be changed if necessary.

3.   Process the input file.  When you edit or confirm the information displayed by the automated cash application program and press the OK button, the program prompts you with a list of the valid mapping or file conversion routines that have been set up on your system.  You should select the appropriate mapping routine and press the enter key to continue.  At this point, the mapping conversion program is executed.  The mapping program performs the following tasks.

•      The program converts the input file from the format used by the bank into the standard format that is used by the automated cash application processing program.

•      The program creates payment detail lines for each invoice to be paid.  As the payment detail lines are being created, the system uses the following logic.

•      If a check is included in the bank file and it points to at least one valid invoice (meaning we can identify the customer that the payment should be applied to), the check is processed. 

•      If the entire check amount is not pointed to specific invoices (i.e. a check for 100.00 with 75.00 in invoices to be paid specified in the file), the program will create a new overpayment or prepayment document for the unapplied portion of the payment.  This allows the system to completely post the check. 

•      If a document must be created in order to completely post a payment transaction, the amount of the document that needs to be created and the related payment transaction information is inserted into the input file produced by the mapping routine.   This information (the amount of the new document to be created and the information about the associated payment) is also written to an error file.  At a later time, the new document for the unapplied payment can be manually applied to the appropriate invoices. 

•      If a negative payment amount is specified (customer is taking a credit memo and sending a payment), the system includes the credit memo invoice in the input file so that the appropriate amount of the credit can be taken during processing. 

•      The program identifies payments from the bank supplied file that do not point to at least one specific invoice.  If a payment in the bank input file cannot be pointed at least one specific invoice, the system will skip automatic processing of that payment.  The information for the skipped payments is written to the mapping error file, so that the payments that need to be manually processed are identified.

•      The program outputs the total amount of payments that were included in the bank file being processed.  This amount is based on the file supplied by the bank and it includes all payments (whether they will be automatically processed or not).  This bank total is used later in the process to verify that the amount processed on the system matches the amount provided by the bank.

4.   Print and retain the log file that is produced by the mapping program.  The mapping program produces a log file and it displays this file after the bank input file is processed so that the file can be viewed or printed.  The error file lists detailed information about each payment transaction which does not include complete invoice detail and it notifies you how each of the incomplete transactions in the bank input file were or will be handled by the program.  The error file also lists the total amount of payments included in the bank file.  There are generally two different error conditions that are reported in the error file.

•      At least one valid invoice was specified for the payment being processed, but the entire payment amount does not point to valid invoices (either the whole check amount is not pointed at specific invoices to be paid, or one of the invoices specified cannot be processed).  In this situation, the system will create a new prepayment or overpayment document for the amount of the payment that cannot be applied to valid invoices.  The amount of the new document and the payment information associated with the document is detailed in the error file.  No action is normally required in this situation as the system will post the check and create the document automatically.  At some later time, the customer invoice history can be researched to determine which other invoices the new document should be applied to.

•      No valid invoices are specified or found for the payment.  In this case, the system will not process the payment as it cannot be reliably identified with at least one valid specific invoice.  When this situation occurs, the error file will list the information for the payment that was provided in the bank file.  The program will also print a message notifying the operator that the payment will not be imported and that it must be applied manually. 

5.   Allow the automated cash application program to complete processing.

6.   Check the error file produced by the cash application program.  The program that actually applies payments to invoices also produces an error file called fvaca.err.  This error file should be checked for messages after processing has completed.  If an error message is listed in this file, the error should be forwarded to Cove Systems for research.

7.   Run a cash receipts journal report for the items posted automatically by the system.  This can be accomplished by selecting the cash account that the deposits were made to and journal entry source “AD” (this is the journal entry source that is produced by automated cash application programs). 

8.   Compare the bank deposit total that is was printed in the mapping error file to the amount of the payments that were automatically posted by the system (the cash receipts report total).  The difference between the two amounts should be equal to the total amount of the payments which are listed as errors in the mapping log file.  These payments were not imported and need to be manually posted.

9.   Manually apply the payments that were not imported (are listed as errors) in the mapping log file.  Use a unique batch number (like ACAMAN) so that these payments can be identified easily when reconciling the total bank deposit amount.

10.  Verify that the total of the cash receipts journal plus the total of the manually applied payments for the day (from the mapping log file) match the bank control total that is output in the mapping log file.  If the amounts do not match, verify that all manual payment applications have been performed and that the cash receipts total matches the control total from the mapping program.  If you are still unable to find the cause of the variance, contact Cove systems to research and correct the problem.