Reconciling Customer Payments through Direct Debiting and Factoring

This document explains the workflow used to reconcile customer payments executed through direct debiting and factoring.

If you and your bank use EDI to remit and report invoices and payments, you manage the reported payments as described in Recording Customer Payments via Electronically Transferred Receipt Orders instead.

Outcome

Payments are reconciled against the remitted invoices. Any bank fees are recorded. Invoices reported as unpaid by the factoring company are open again. A standard letter is created and sent as a notification to the payer.

An accounting journal is printed.

Use the supporting functions provided in the debt management routine to collect any remaining debts.

Accounts receivable and the general ledger are updated.

For invoices reported as paid, the following account entries are created:

Accounting Rules Account Debit Credit

AR75–193 or

AR75–194

Direct debiting remitted or

Factoring remitted

  x
  Bank* x  

* Account retrieved from the bank account ID selected when creating the remittance.

Reconciled factoring invoices are assigned status 30 (Reconciled).

Unpaid Invoices

For invoices reported as not paid, the following basic account entries are created:

Accounting Rules Account Debit Credit

AR75–193 or

AR75–194

Direct debiting remitted or

Factoring remitted

  x
  Customer x  

Before you start

Follow These Steps

Outline
  1. Reconcile Payments against Closed Invoices

    If all payments in the remittance are executed, reconcile them by confirming the remittance in 'Bank Remittance. Reconcile Payment' (ARS350). You can also report any bank fees added in this program.

  2. Report Unpaid Invoices

    If some invoices were not paid, remove them individually from the remittance in the subprogram 'Bank Remittance. Update Payment' (ARS351) before the confirmation. For direct debit invoices, you can also select to remove all invoices for the current payer in the remittance instead of removing single invoices.

    The invoices are reopened and a letter with payment instructions for the payer is created automatically. For factoring, this letter could be an instruction to pay directly to the company instead of to the factoring company.

  3. Notify Customer

    Send the letter to the payer. If the invoice now is past due, it is included in the debt management routine as well.

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