Customer lockbox
Lockboxes are used by banks or other check processing institutions to process large numbers of payments, or payments for large invoice amounts, and post directly to commercial bank accounts. The bank maintains a post office box where customers are instructed to send their payments. The postal service accepts those payments and delivers them numerous times throughout the day to the bank. The bank submits an electronic transmission of all checks posted in a day.
General Ledger updates
If these conditions are met, the Customer Entry Lockbox Update Report automatically runs to update the AR accounts:
- Yes is selected for the Post/Update Imported Transactions? option on the Customer Entry Lockbox Import Report.
- The EDI 820 document is received without error.
The AR accounts are updated with these types of transactions:
- Check records for the selected bank number
- Payment records applied to the correct invoice
- Invoices and credits that are updated to paid status
- NSF invoices that are created for negative check amounts
- Unapplied cash transactions that are created when no matching invoice
General Ledger transactions are created and applied to the account numbers from these records:
- CR Bank Setup
- Customer Setup
- SA Operator Setup
- SA Operator Setup - R&D Operator record
If you run the import without updating AR and GL, batch records are created but not updated. You must then update the transactions manually. We recommend that you update the imported transactions to fully utilize inbound EDI 820 functionality.
Whether you run Customer Entry Lockbox Import Report in update mode or not, detail for each transaction is available in ETCC.
Split payments
When a payment transaction is received, checks are matched to customer records. If the invoice number for a check transaction does not match the customer number from the BOD, other customer records are checked for a match. Sometimes, multiple invoices for different customers are paid with a single check.
If a check from one customer applies to other customers’ scheduled payments, the payment is processed based on the Split Transactions (C)lear or (S)uspend option on the Customer Entry Lockbox Update Report. If C is selected, the match is based on invoice number, instead of the customer number. If S is selected, the transaction is suspended. You must unsuspend the transaction in Customer Lock Box Entry.
No matching records found
Any payment transactions that cannot be matched to a valid customer account during the import process are posted as unapplied cash against a dummy, or fictitious, customer account number. The fictitious number is specified in the Dummy Customer for Unmatched Checks field on the Customer Entry Lockbox Import Report. The fictitious customer record is updated when these conditions are met:
- A Customer Lockbox Setup record cannot be matched to the invoice or customer.
- Invoice transaction data is not contained in the BOD.
- One of these conditions are met:
- The Lockbox Post Type field in Customer Setup-Credit is blank.
- Invoice transactions in the import cannot be matched to a valid customer.
- The same invoice number can be matched to multiple customers.
If you receive lockbox transactions that do not contain invoice transactions and Lockbox Post Type in Customer Setup is not blank, or you expect to receive NSF checks, then you must set up a Customer Lockbox Setup record for each customer.
If No is selected for the Post/Update Imported Transactions field, the check payment is suspended. You can change the customer number in ETCC and then update the transaction to reprocess it.