This procedure should be used when you wish to write off or adjust open AR invoice amounts during Cash Application.
Note: This procedure should only be used when you wish to charge off an invoice balance at the same time that you are applying a payment to the account being processed. If you wish to adjust an invoice without applying a check at the same time, please see the section on Processing Invoice Adjustments later in this document.
The Cash Application program allows you to charge off invoice balances to the general ledger at the same time that you are applying payments. The balance of a single invoice can be charged to one or more accounts during payment entry. Note: The general ledger accounts that you may charge invoice amounts to from within Payment Entry are limited to the accounts which have been set up or enabled by your system administrator.
1. Ensure that the Daily Startup Procedures have been successfully completed.
2. Select the Cash Application program from the Accounts Receivable Operations Menu and verify or change the default information displayed by the program as required.
3. Find the appropriate customer record using any of the several different methods which are available in the Cash Applcation program.
4. Enter the currency, check or other document number and the amount of the payment being made by the customer.
5. 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 should be set to the appropriate value (i.e. CSH, CHK,AX,MC, WT, etc) based on the payment being made. The pay code that you select in this step will be written to all of the payment lines of the journal entry which is created for the transaction. The pay code of the adjustment lines created by the program will be set to ADJ.
6. 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 (please see the section on Processing Cash and Credit Card receipts for more information about this procedure).
7. Specify the payment amounts to be applied to each invoice. You may specify the amount of the payment to be applied to each invoice using the following different methods.
• If you highlight an invoice in the lower section of the program and Double Click the left mouse button, the system will default the lower of the open invoice balance or the remaining check To Apply amount into the Payment field of the invoice. If the invoice terms and the posting date indicate that the customer is entitled to a prompt payment discount on the invoice, the system will automatically calculate the amount of the discount and default the discount amount into the Disc 1 column of the Payment Entry screen. It will also adjust the payment amount as required due to the discount.
• If you highlight an invoice in the lower section of the program and press the Apply Line Button, the system will default the lower of the open invoice balance or the remaining check To Apply amount into the Payment field of the invoice. If the invoice terms and the posting date indicate that the customer is entitled to a prompt payment discount on the invoice, the system will automatically calculate the amount of the discount and default the discount amount into the Disc 1 column of the Payment Entry screen. It will also adjust the payment amount as required due to the discount. The payment amount and the discount may also be manually entered if necessary.
• The Apply to All Button can be used to automatically apply the payment amount to all of the open invoices shown in the program. When the Apply to All Button is selected, the system applies the payment being processed to all of the open invoices showing in the program, using the same logic used by the Apply Line and the Double Click options. The system will
• To apply an amount different than the open invoice balance or the remaining balance of the check being applied, or to manually edit the prompt payment discount for each invoice, you may highlight the desired invoice and use the Zoom option to display the Paytemp Detail Panel. The Paytemp Detail Panel allows you specify the amount of the payment to be applied to the invoice and it also allows you to specify the other adjustments to be made to the invoice balance, including the amount of the prompt payment discount being taken for each invoice. The payment amount and the discount may also be manually entered if necessary. Multiple adjustment accounts and adjustment amounts can be specified for each invoice, but the total of the payment and adjustment amounts for each invoice cannot exceed the invoice total.
8. Use the Zoom option to activate the Paytemp Detail Panel to specify the discount to be applied to the invoice (if any). The Disc 1 field in the Payment Item panel is used by the system when automatically processing prompt payment discounts. The account number that defaults for this adjustment field is normally the default account used for AR discounts taken.
9. Use the Zoom option to specify the amount of any other adjustments in the Disc 2 thru Disc 4 fields of the Payment Item panel. You may specify up to three invoice amounts as well as the general ledger account to be used for each adjustment. Note: The accounts which may be selected in the Payment Item panel are limited to those which have auto post numbers in the range 570-599. You may display or select these accounts by positioning the cursor in any one of the four Acct fields and by pressing the EXPAND key. The total amount of the payments and adjustment amounts for each invoice may not exceed the invoice balance.
10. Verify that the correct amounts and auto post numbers are displayed in the Payment Item Panel and press the SAVE key to return to the Payment Entry program.
11. Finish processing any other invoices for the selected customer as required and SAVE the transaction.