Example 2: Balance Forward Customer (Customers 1 and 2 are part of a National Account and AR130 National Accounts Credits set to Y)

The following example shows how Automatic Cash Application Audit (AR130) processes open records for a balance forward customer, when customers 1 and 2 are part of a National Account relationship and on AR130, the National Accounts Credits field is set to Yes.

Note: In this example, the AR130 Payment Batch Number field is not entered.
Customer Transaction number Deposit/due date Open amount
1 Payment 101 10/17 200.00
1 Payment 105 10/21 250.00
2 Payment 102 10/30 100.00
2 Credit memo 201 10/27 70.00
1 Credit memo 202 11/05 140.00
2 Invoice 301 10/10 150.00
1 Invoice 302 10/14 90.00
1 Debit memo 401 10/22 40.00
2 Invoice 303 10/29 100.00
2 Debit memo 402 11/03 100.00
1 Invoice 304 11/07 200.00

The application order and application amounts are as follows.

  1. Payment 101 (200.00) is applied to credit memo 201 (70.00). An applied record (70.00) is created for the fully applied credit memo 201. Payment 101 open amount is 270.00.
  2. Payment 101 open amount (now 270.00) is applied to credit memo 202 (140.00). An applied record (140.00) is created for the fully applied credit memo 202. Payment 101 open amount is now 410.00.
  3. Payment 101 is applied to invoice 301 (150.00). An applied record (150.00) is created for the fully applied invoice 301.
  4. The remaining 260.00 from payment 101 is then applied to the next oldest invoice or debit memo; invoice 302 (90.00). An applied record (90.00) is created for the fully applied invoice 302.
  5. The remaining 170.00 from payment 101 is then applied to the next oldest invoice or debit memo; debit memo 401 (40.00). An applied record (40.00) is created for the fully applied debit memo 401.
  6. The remaining 130.00 from payment 101 is then applied to the next oldest invoice or debit memo, invoice 303 (100.00). An applied record (100.00) is created for the fully applied invoice 303.
  7. The remaining 30.00 from payment 101 is then applied to the next oldest invoice or debit memo, debit memo 402 (100.00). An applied record (30.00) is created for the partially applied debit memo 402.
  8. The next oldest open payment, payment 105 (250.00), is used to continue the application process. An applied record (70.00) is created for the fully applied debit memo 402.
  9. The remaining 180.00 from payment 105 is then applied to the next oldest invoice or debit memo, invoice 304 (200.00). This creates an applied record (180.00) for the partially applied invoice 304.
  10. The next oldest payment 102 (100.00) is used to continue the application process. An applied record (20.00) is created for the fully applied invoice 304. This leaves payment 102 partially applied with a (80.00) balance.