Automatic application using the remit and transaction match method

Use this method to apply a payment to an open item using a remittance advice record. The payments and their remittance advices must be loaded into the solution using one of these processes:

  • Interface Lockboxes
  • Interface Payments
  • Interface Payment 2, the company payment interface
  • Cash Remittance during cash entry.

When you run Automatic Cash Application Audit, the invoice remittance record is used to match the referenced invoices, credit memos, or debit memos. Regardless of whether the referenced item is found or has been applied, the cash remains unapplied on the customer's account. The cash can be applied using one of the other automatic application options or using online cash application.

After creating remit records, the only valid transaction types are credit memos and invoices. Remit records that point to debit memos are treated differently after the Automatic Cash Application Audit is run. After the remit records are applied, and if the remit transaction type is Invoice, the payment is applied to the invoice. If the invoice is not located, then a search continues for a debit memo with a transaction number.

There are specific rules for the automatic application of credits and payments for a national account relationship. The matching process first attempts to select the national account's open items and the invoiced customer's open items. If companies are crossed during the matching process, the base currencies for the companies that are involved must be the same.

Discount conditions

Invoices are discounted during application if these conditions exist:

  • The payment deposit date is on or before the discount date plus the number of payment grace days are defined in Customer.
  • A discount reason code has been assigned in Customer.
  • The invoice has not been partially applied.

An adjustment record is created to reflect the discount.

Processing conditions

Credit remittance records are processed, which increases the applicable value of the payment. Then, the invoice or debit remittance records are processed. The credit remittance record cannot be processed if the credit memo is not found or does not have an open amount. If the credit memo is located and it is open, then the amount on the credit remittance record is applied to the remaining open items. This process continues until all credit remittance records have been processed or the open items are fully applied.

If the last open item is not fully applied after remittance records are processed, then the tolerance logic applies. If the open item amount is less than or equal to the maximum amount or percent in Customer, the open item is fully applied. An adjustment record is created with the associated tolerance reason code.

Processing results

An applied record is created for each remittance record that is applied to the open item. An adjustment record is created for each discount and tolerance that is processed. The status of all remittance records are updated after processing is complete.