Processing Parent Company Payments

Parent Company payment processing handles situations in which you invoice one or more customers and then receive payments for those invoices from a different company that is related to the invoice company.  Parent company processing is used when there is a defined relationship between the company being invoiced and the company making the payment (an example would be a customer with branch locations which are invoiced separately and a headquarters company which pays for all of the invoices from all branches).  Finance Company payment processing

To process a Parent Company payment, the company that you are receiving the check from must be identified as the Parent of the companies whose invoices are being paid.  To set up a Parent company, you should first verify that a Customer Master record has been created for the Parent company.  If the Parent Company has not been set up in the Customer Master file then a customer record should be created for the company with the appropriate information.  Once the Parent Company has been created, you may assign the parent company to the child companies by loading each child company into the Customer Master program and entering the Parent company into the Parent field of the company record.  (Please see the Company Documentation for more information about setting up customer records).

Once the Parent Child relationship is defined, the system will allow you to apply checks from the Parent Company to any of the open invoices for any of the Child Invoices.  When Parent Company Payment processing is used, the parent company is recorded in the AR Check record created by the system and the journal entries used to record the transaction tie the check to the individual invoices (and child companies), paid with the check.

1.  Select the Cash Application program from the Menu and verify or change the default information displayed in the program as required.

2.  Use the prompt button located next to the Account Window to select the Parent 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.

3.  Enter the Check Number, Amount, and the Currency to be used for the payment.

4.  Load the invoices for the Child Companies into the lower section of the Cash Application program.  When a Parent Company payment is being processed, the customer name in the check record is not the same as the customer name in the invoices being paid, and only the following options may be used to select the Child Company invoices being paid.

      Use 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.

      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.

When each invoice number is selected, the system will verify that the invoice is for the company selected in the top section of the program 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.

5.  Specify the payment amounts and any adjustment amounts for the invoices for the Child Companies.   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.

6.  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 Parent Company being processed.


Processing Finance Company Payments