Defining Cash Application Options

During this procedure, you will learn how to set up defaults that will be used to apply receivables.

To define cash application options

  1. Access Company (AR01.1), Apply tab.
  2. Define how you want cash applications to be applied. Use the following guidelines to enter field values:
    Open Item Display Sequence

    Select the order in which open items will display during cash application in Cash Entry and Application (AR30). If left blank, due date defaults.

    Application Review Required

    The Application Review Required field indicates whether the Application Audit Report (AR132) is required before applications can be posted by Application Closing (AR190).

    Discount Grace Days

    The number of grace days to be added to the discount date to allow automatic discount during cash application. If left blank, no grace days are used.

    Past Due Discount Display

    Select Yes to display past-due discount amounts during cash application. The default is No.

    Automatic Credit Apply

    Select whether automatic application can occur when you cross reference an invoice or debit memo to a credit memo.

    Over Application of Payment

    Select Yes if you are using memo chargebacks.

    Application Post Date

    Allows you to default the application posting date to either:

    • "P"ayment/credit post date

    • "S"ystem date.

      Caution: 
      If you select "P", you might have an application date before the current GL period. It can also affect your aging reports.
    Third Party Payment

    Select Yes to allow third party payments. This means that you can apply a payment to open items regardless of the open item customer involved.

    Interface to AP

    Controls whether the interface between AR and AP is allowed, as well as the automatic vendor creation aspect of this interface.

    Open Balance Include Drafts

    Select Yes to include bills of exchange in the open balance. Select No if you don't want to include bills of exchange in the open balance.

    Default Vendor Class

    If you selected Yes in the AP Interface field, you can enter a default vendor group or class.

    Tax Recovery on Discount

    If you are required to subtract the discount amount that is attributable to the sales or VAT tax from the amount of tax owed, set the Tax Recovery on Discount field to Yes. The system will do the necessary processing when you run Journal Posting (GL190).

    This discount is used in some European countries. A discount is given to a customer in AR, if a portion of the original amount of the invoice was for VAT. The amount of the discount that is attributable to VAT must be subtracted from the amount of VAT that is due to the government.

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