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. This process is also referred to as Flooring in StreamV.
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.
1. Confirm that the Daily Startup procedure has been performed.
2. Select the Cash Application program from the Menu and verify or change the default information displayed in the program as required.
3. Use the prompt button located next to the Account Window to select the Finance Company that the check was received from. When the prompt button is pressed, the system activates the Customer Lookup, which allows you to find a customer record using any of several supported display and search sequences. You may also load the customer by using the Find Invoice Button to select one of the invoices being paid. The invoice company (which should be the Finance Company), should be loaded into the Cash Application program along with the selected open invoice.
4. Enter the Check Number, Amount, and the Currency to be used for the payment.
5. Load the invoices being paid into the lower section of the Cash Application program. When a Finance Company payment is being processed, the customer name in the check record is the same as the customer name in the invoices being paid (the invoices are assigned to the finance company as they are created), so all of the options for loading an invoice can be used in the program. You may select an invoice by:
• Using the Load All Invoices for Customer, or Find Invoice For Customer Buttons to select the invoices to be paid.
• Using the Find an Invoice Button to activate the Invoices Lookup program, which allows you to display and search for open invoices using several different search and display sequences. In this case, you would be selecting one of the open invoices for the Finance Company.
• Use the Insert key to activate the Invoices Selection list, which allows you to display and search for open invoices using several different search and display sequences. In this case, you would be selecting one of the open invoices for the Finance Company.
As each invoice number is selected, the system will verify that the invoice is for the company selected in the top section of the program (the check and invoice company should both be the Finance Company in this case) or that the company in the top section of the program is identified as a Factor or a Parent of the company whose invoice is selected. The invoice will then be loaded into the program or an error message will be displayed.
6. Specify the payment amounts and any adjustment amounts for the invoices. The Apply Line Button and the Zoom and Doublclick options can be used to specify the amount to be paid for each invoice, and any other adjustments that should be made to the invoice.
7. Verify the payment has been completely applied (The To Apply Amount in the program is 0), and Save the transaction. If there are any unapplied or overapplied payment amounts, a new document can be created to track the amounts prior to Save. The documents will be created with the name of the Factor Company being processed.