Automated customer payment reversal

Workflow

To begin the reversal process, access Customer Payment Reversal Entry to conduct a filtered search. Narrow the search to find specific payments, or find payments that were applied to many invoices or customers. From the search results, next drill down into the payment transaction. Select a reversal reason, complete the related fields, submit the reversal, and open a journal.

The reversal function does not apply to payments that were tendered in Sales Order Entry. The reversal function can only reverse payments that were applied to the customer account from Customer Cash Receipt Entry. For these payments applied in Customer Cash Receipt Entry, the transaction Type must be set to Payment, Split Check, or COD. The reverse payment feature creates a record for each payment created in Customer Cash Receipt Entry. Be aware that no payments that were entered before the activation can be reversed with this automated reversal. Be aware that these payment transactions, even though entered in Customer Cash Receipt Entry, cannot be reversed:

if taxes on any invoice were overridden
if debit memos were added
if Unapplied Cash was partially applied

In Customer Cash Receipt Entry-Transaction, the posting types available are: Payment, Split Check, Apply Credits, Cash on Delivery (COD), and Miscellaneous Cash. If you set the posting type to Apply Credits or Miscellaneous Cash, these payments cannot be reversed automatically.

A Payment Reversal button is available in Customer Cash Receipt Entry-Transaction. The button is only available to an operator who has 5-Full Security in SA Operator Setup for the Customer Payment Reversal Entry function. This button directly opens Customer Payment Reversal Entry.

In Customer Payment Reversal Entry, from the search results, when you drill down into a payment transaction, the Payment Reversal detail page is displayed. In the Payment Reversal detail page, before submitting the reversal by clicking Submit, you must complete the related fields. This table shows the validation errors that are displayed to help with completion:


Action	Error
Reversal Reason not specified before clicking Submit.	This is a Required Field (2100) - Reversal Reason
Division not specified before clicking Submit.	Division # - Required
Reversal Reason=NSF Check. NSF is not zero. Invoice number not specified before clicking Submit.	Invoice # - Required
Reversal Reason=NSF Check. NSF is not zero. Terms not specified before clicking Submit.	Terms - Required
Reversal Reason=NSF Check. NSF is not zero. Transaction is a split check or group payment. Split Check or Group Payment not specified before clicking Submit.	Split Check or Group Customer - Required
Reversal Reason=Applied to Wrong Customer(s). Correct Customer not selected before clicking Submit.	Correct Customer – Required
Reversal Reason=Applied to Wrong Customer(s). Correct Customer value matches original customer before clicking Submit	Correct Customer must be Different from Original Customer (7098)

When all fields are completed, click Submit. As required when entering a payment in Customer Cash Receipt Entry-Transaction, you must open a journal to perform a reversal. If you stop a journal from being opened, you receive a message that a journal must be opened. If no journal is open, the Open Journal popup is displayed when you click Submit. A journal must be opened before you can continue.

When submitted, the reversal for the transaction is processed automatically; as one payment transaction. If the reversal was not for an NSF check, an unapplied cash transaction is posted for the offsetting amount.

Split check and group payments

One record is created with each reversal. Even thought a split check or group payment affects more than one customer, only one record is created for the reversal. When a reversal is performed, a customer must be specified in the Split Check or Group Customer field. The customer specified incurs any associated NSF fee.

Split Check payments must have a Transaction Type set to Split Check. Postings are made as Split Check transactions. Each split is posted to a separate set within the journal.

Group payments must have a Transaction Type set to Payment, Apply Credits, COD, and Miscellaneous Cash. The Apply To type must be set to Group. Postings are made as Payment, Apply Credits, COD, and Miscellaneous Cash transactions. All postings are done within the same journal and set.

Automated updates

When you reverse the payment, the payment record is reversed, but related records are also automatically reversed and updated. The payment is marked as reversed, with a reversal reason and description. Reversal data is maintained in a database table. Automated updates track whether this payment has previously been reversed. Payments that have previously been reversed cannot be reversed again. This list summarizes the additional updates to related records made by the system, further automating the process:

Accounts receivable transactions:
- Paid scheduled payments are marked as reversed.
- New scheduled payments are created from paid scheduled payments.
- Any related Invoice, Service Charge, or COD paid with the original payment is reactivated and payment information is backed out.
- If new Miscellaneous Credits (MC) and Unapplied Cash (UC) were applied during the payment, those are reactivated.
- If a new Unapplied Cash was created during the payment, and has since been used, it is not automatically reversed, but is inactivated.
- For payment incorrectly applied to a customer or invoice, an Unapplied Cash is created to offset the reversal.
- For an NSF with a specified fee, an invoice or a scheduled payment for the NSF fee is created.
To update transactions for check reconciliation, for NSF checks, the original deposit transaction is reversed by creating a negative adjustment transaction.
To update Customer records for an NSF check, the last payment date and amount is reversed. The reversal is also tracked in the database field and increments the field, # of NSFs, in Customer Payment Reversal Entry.
Customer and ShipTo period and other balances are reversed as appropriate, particularly if based on ShipTo credit limits.
General Ledger transactions from the original payment are reversed. The cash posting is reversed for NSF Check. If an NSF Fee is charged, it posts to the NSF GL Account or according to General Ledger integration hierarchy. In the hierarchy, specifically, that is the Income General Ledger Account field value in Customer Setup-General Ledger or the Sales field value in SA Operator Setup-Other Options-General Ledger-Accounts Receivable. Reversals for Applied to Wrong Customer(s) and Applied to Wrong Invoice(s) update the AR control for the appropriate customer or NSF account.
Orders and order lines at Stage 5 (Paid) are reversed to Stage 4 (Invoiced). The paid date is cleared. For the order header and lines, the reverse date value is updated in database table.

Exceptions

After you conduct a filtered search in Customer Payment Reversal Entry, you should review the Exception column. If an exception reason is displayed in this column, the payment transaction cannot be reversed automatically. These are the exception reasons:

Already Reversed
Tax Override
Debit Transaction
Unapplied Cash Partially Used
Division # Not Allowed For Operator

Inquiry

The Customer number in the Customer Payment Reversal Entry grid is a hyperlink to that record in Customer Inquiry. The records shown in the inquiry grid consist of transactions that are related to the subject payment. Use standard grid actions to filter for group, specific customers, or transaction type.

Limitations

Be aware that the monthly financial statements may be affected if a payment is made in one month and then reversed in another. Reversing and reapplying a payment may also affect the Customer Setup average days to pay value.
Due to government restriction, the Customer Payment Reversal Entry function is not supported for a Mexico company.
To make non-payment corrections to an invoice or service change, you should use Customer Transaction Entry to enter a reversal.

Copy function

When the customer payment reversal feature is activated, the Sales Order Entry order Copy functionality clears the database table date-time stamps on the new order. The Customer Setup customer Copy functionality sets the field value, # of NSFs, on the new customer to zero.

Commission reversal

Sales commissions that are associated with a payment are not automatically reversed. It is not necessary to reverse the commissions to avoid a double payment.