The Invoice Assignment or Finance Company Payment Processing option allows you to handle situations where you ship items to one customer but receive payment for the shipment from another company. The Finance Company option is typically used when a finance company will be purchasing the receivable for the shipment from you at the time the invoice for the shipment is generated. The Finance company is then responsible for collecting payment for the invoice and remitting payment to you.
The Invoice Assignment option is different from the “Parent Company” and “Factor” processing options that are available during Customer payment entry. When invoice assignment is used, the company information fields in the invoice are actually modified to reflect the fact that a different company will be responsible for paying the invoice. The Parent Company and Factor processing options are used only during accounts receivable payment processing to allow a check from one company to be applied to an invoice for a different company. When the Finance and Factor options are used, the original sales order company information is not changed as the invoice is created.
To implement the AR invoice assignment option, special Payment Terms records are created in the Payment Terms Table. These Terms records are set up with the account number of the company to which the invoice is to be assigned at creation time loaded into the “Flooring Account” field of the terms record. When one of the assignment terms is used on a sales order or invoice, the system uses the terms record to locate the company the invoice is to be assigned to. The system then moves the original BillTo Company from the sales order into the SoldTo field of the invoice and the Finance company (the company with the account matching the Flooring account field) is loaded into the Bill To field of the invoice. Once this step is completed, the accounts receivable aging shows the receivable as due from the finance company. When payment is received from the finance company, the finance company check is simply applied to the invoice in the payment entry program and the transaction is completed.
Since Invoice Assignment is based on the terms used on the order, the Assignment terms record can be used as the default for a specific customer (meaning their invoices are all assigned to a finance company for collection and payment when the company terms are used), or a different terms record can be used as the customer default and the assignment terms can be used only as required for a specific order.
When Invoice assignment is used, it is important to note that sales reporting should be done using the Sold to field of the invoice instead of the Bill to field. This ensures that the company receiving the merchandise is shown on sales reports instead of the finance company (who is only responsible for paying the invoice).
The current system supports Invoice assignment only when the invoice is created. Invoice assignment is supported by the standard Invoicing/Order completion program for both order completion and direct invoicing, and by the Vendor Ship Invoicing program accessed from the PO Management program.
Company Update Logic
During the Invoicing Process, the system updates the High Balance, the High Balance Date, the First Sale and the Last Sale date fields for the company being processed.
When an invoice being processed is assigned to a finance company, the system updates the High Balance, the High Balance Date and the other date fields in the record for the finance company, since the finance company is being billed for the shipment.
If the invoice being processed is not assigned to a finance company, the invoice billto and sale company are the same – and the system updates the date and statistics fields for company.
StreamV allows you to handle both Parent and Finance company payment processing situations in a controlled and efficient manner. As parent or finance company situations are identified, the user can create or modify customer records as required to streamline payment processing.