Bill Back - Accounts Receivable

This document describes the bill back function, which is used to create a customer invoice for one or several unauthorized payment deductions or other not-accepted payment differences.

Description

The bill back function has two purposes:

  • To facilitate the handling of payment differences such as unauthorized cash discounts, partial payments, not-accepted debit notes and other types of open records in Accounts Receivable. Instead of creating one invoice for each small payment difference, many outstanding amounts can be handled with one bill back invoice.
  • To make it easier for the customer to accept the claim and to pay the differences. Because the customer probably has already closed the invoices in Accounts Payable, no outstanding invoices can be used to pay the not-accepted differences when payment reminders are received. This can affect the customer’s willingness to accept the claims, especially if they consist of many reminders for small amounts. In contrast, a bill back invoice can be managed as an ordinary invoice.

The procedure for creating a bill back invoice consists of two main steps:

  • Select records with outstanding amounts due to not-accepted differences. All amounts are written off.
  • Create a bill back invoice, using a pre-defined accounting option. The amounts that were written off in step one are automatically included as separate lines.

These outstanding invoices are registered for a customer in Accounts Receivable:

  • Invoice Amount Paid Open Amount

    INV-1 1 000 990 10

    INV-2 2 000 1 950 50

By using the bill back function, the invoices are written off and the payment differences are included in the bill back invoice. When this is done, the customer records in accounts receivable will look like this:

  • Invoice Amount Paid Open Amount

    INV-1 1 000 1 000 0

    INV-2 2 000 2 000 0

    Bill Back 1 60 0 60

A new invoice, the bill back, has been created with three lines, one for each invoice that has been written off. The total of the bill back is recorded as a new transaction in the receivable account.

Follow these steps

  1. Launch ’Bill Back Type. Open’ (ARS052) to define specific parameters for each created bill back type.

  2. Launch ’Bill Back. Open Text per Type’ (ARS053) to enter comments for the desired bill back type.

  3. Generate bill back invoices in ’Payment Received. Record’ (ARS110/F) using accounting option 15.

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