Processing Customer Payments

This document explains how to process customer payments, from recording a payment to managing a rejected payment document.


Customer payments are recorded, allocated, and, if necessary, adjusted. Checks and drafts are cashed. Rejected payment documents are managed. For information on lists printed, see the respective process/instruction.

The payments processed affect your customer credit and risk management as well as your cash flow management.

The general ledger, accounts receivable, and accounts payable are updated after using this process – see the respective process/instruction for details.

Before you start

Follow these steps



Steps 1 and 2 – recording and allocating payments – are in several cases combined into one step. Due to the flexibility of the financial system, they are explained separately in this principal process for the sake of clarity.

Note that direct debiting management is described separately in Managing Direct Debiting in Accounts Receivable.

  1. Recording Customer Payments

    Record customer payments in the following programs:

    PmtClass Customer payment Record in ...



    'Payment Received. Record' (ARS110)


    Check with later allocation to customer invoice

    'Payment Document. Enter' (ARS105)


    Check with direct allocation to customer invoice

    'Payment Document. Enter' (ARS105), 'Payment Received. Record' (ARS110)


    Bank transfer, manual entry

    'Payment Received. Record' (ARS110)


    Bank transfer, entry of electronically transferred receipt orders

    'Batch Payment. Update' (ARS040)


    Draft/Bill of exchange

    'Payment Document. Enter' (ARS105), 'Payment Received. Record' (ARS110)


    Direct debiting payment, entry based on printed bank statement

    'Bank Remittance. Reconcile Payment' (ARS350)


    Direct debiting payment, entry based on electronically transferred bank statement

    'Bank Statement. Open' (ABS100)

  2. Allocating Customer Payments to Invoice

    Allocate recorded payments to one or several customer invoices or credit invoice records, manually or automatically, in (ARS110).

    When allocating, you can also make any adjustments of payments like write-offs, managing payment differences, and netting against supplier invoices.

  3. Remitting Customer Checks/Drafts to Bank for Collection

    Select the checks or drafts you wish to send to your bank for collection and create a bank remittance statement in 'Bank Remittance. Open' (ARS300). Send the statements to the respective banks together with the payment documents.

    This process also includes reconciling collected drafts and definite postdated checks (type 1) in 'Bank Remittance. Reconcile Payment' (ARS350).

  4. Managing Customer Checks/Drafts Rejected by Bank

    Report any checks or drafts that have been rejected by the bank and returned due to insufficient funds as unpaid:

    Payment document Report in ...

    Check; preliminary postdated check.

    'Draft/Check. Record Unpaid' (ARS340)

    Draft: Collected on the due date, alternatively discounted (before the due date), and reconciled but afterwards rejected.

    'Draft/Check. Record Unpaid' (ARS340)

    Draft/Definite postdated check: Rejected by the bank before collection but before having been reconciled.

    'Bank Remittance. Update Payment' (ARS351), called from (ARS350).

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