Allocating Customer Payments to Invoice

Outcome

Customer payments are allocated, completely or partially, and – if necessary – adjusted. See the respective process/instruction for information on lists printed.

Invoices allocated to checks or drafts are recorded as paid and separate draft and check records are created with remittance status 10 in the accounts receivable file. They are also displayed in 'Customer Draft. Display' (ARS280) and 'Customer Check. Display' (ARS430), respectively.

If you selected reconciliation numbers when allocating payments manually or if the invoices were connected to a reconciliation number, the total outstanding amount for the respective number is updated directly in 'AR Reconciliation Number. Open' (ARS245).

Analyze the customer debt and credit situation based on the allocated payments.

If payments were allocated to invoices with a reconciliation number, follow up the payment status for each number on a regular basis. You do this online in (ARS245) or in 'Accounts Receivable. Display Additional Information' (ARS250). You can also print lists in 'AR Reconciliation Number. Print' (ARS545) for this purpose.

The general ledger and accounts receivable are updated. These account entries are created:

Accounting Rule	Account	Debit	Credit
*	Customer		x
	Bank	x

*Account entry based on the original customer invoice.

For information about transactions created for adjusting payments during allocation, see Adjusting Customer Payments.

For information about payment receipts, see Manage customer payment receipts.

Payments by Draft and Definite Postdated Check

When draft payments or payments by postdated checks of type 2 are allocated to invoice, they are automatically recorded under these information category numbers and displayed in 'Accounts Receivable. Display Additional Information' (ARS250):

• 211: Internal draft number (see Before you start)
• 211: Drawee reference number, that is the customer's draft number – manually entered, depending on the payment method used for recording the received draft.

After allocation, value type 40 = 'Payment document received not remitted' in 'Accounts Receivable. Display Balances' (ARS225) is also updated.

Before you start

• The starting conditions listed in Processing Customer Payments must be met.
• Customer payments must be recorded in 'Payment Received. Record' (ARS110).
• For draft payments, number series type 85, series 1, must be defined in 'Number Series. Open' (CRS165). The numbers assigned to the draft records created at the allocation are retrieved from this series.
• If you wish to use a reconciliation number to group outstanding invoice records and monitor their payment status, such a number must be created in 'AR Reconciliation Number. Open' (ARS245).

Follow these steps

1. Allocate Recorded Customer Payments to Invoice

   You can allocate customer payments to invoice records in one of the following ways:

   • Manually when recording payments in 'Payment Received. Record' (ARS110)
   • Automatically when allocating a batch file with verified receipt orders from 'Batch Payment. Update' (ARS040).

2. If the customer also is a supplier and is identified as such on 'Supplier. Define Purchase & Financial' (CRS624/E), past due invoice records in accounts receivable are included when creating a payment proposal for the supplier in 'Supplier Payment Proposal. Open' (APS130).

   Such invoice records are listed in (ARS110) but blocked from further processing until the payment proposal is confirmed.

3. Adjust for Customer Payment Differences

   Make any adjustments necessary for managing and writing off any type of payment differences during the allocation in (ARS110).