AR Payments and Adjustments

This message is displayed in the AR Payments and Adjustments program when you select the Post function and you selected to allocate a Trade Promotion Deduction amount to a mixture of positive and negative document amounts in the Documents to Pay listview.

You cannot allocate a TPM deduction amount to a mixture of positive and negative document amounts in the Documents to Pay listview.

This message is displayed when duplicate invoice, debit and/or credit note numbers exist.

The Allow overwrite branch option is only enabled when the Allow branch override setup option is enabled (Setup Options > Preferences > Financials > Accounts Receivable).

Overwrite branch in Payments

• By default, the Account Receivable branch for a payment defaults to the branch defined against the invoice when it was processed.

• Overriding the AR branch at the time of payment results in the payment amount being allocated to a different branch from the branch against the invoice.

  This affects the AR payment interface in that the full payment is posted to the GL account linked to the branch entered.

  If the invoices being paid were captured for different branches and they all have different GL codes in their Payment Interface, then this option bypasses them and posts all the payments to the single GL account associated with the entered branch.

  If these branches have different Accounts Receivable GL control account codes, then an imbalance between the AR balance on the Ledger control account for the branch and the AR balance against the AR branch itself is created.

  A manual General Ledger journal is required to correct this imbalance.

• When you overwrite the branch, both the Re-establish and Unapplied branches are disabled.

  They will inherit the transaction branch.

• When re-establishing an invoice, the Original branch entered is set to the transaction branch and cannot be changed when you select the Allow overwrite branch option in the Payment Details pane.

• The Overwrite branch is validated according to the integration rules defined in the AR Payments Ledger Interface program.

  If the geographic area is included in AR payment interface entries, then the customer's geographic area is also validated.

• The branch to which Payments are allocated, are as follows:

  • If the Allow branch override setup option was enabled and the branch was overwritten at the time of posting the payment then, in the ArCshJnlDet table, the full payment amount is allocated to the overwritten (entered) branch.

    This is irrespective of the branch against the customer, or the branch against the invoices paid with the payment.

  • If the Allow branch override setup option was enabled, but the branch was not overwritten at the time of posting the payment then, in the ArCshJnlDet table, the full payment amount is allocated to the customer's branch.
  • If the Allow branch override setup option was not enabled then, in the ArCshJnlDet table, the full payment amount is allocated to the customer's branch.

Overwrite branch in Adjustments

• By default, the Account Receivable branch for an adjustment defaults to the branch defined against the invoice when it was processed.

• Overriding the AR branch at the time of adjustment results in the adjustment amount being allocated to a different branch from the branch against the invoice.

  If these branches have different Accounts Receivable GL control account codes, then an imbalance between the AR balance on the Ledger control account for the branch and the AR balance against the AR branch itself is created.

  A manual General Ledger journal must be created to correct this imbalance.

Payment amount

The payment amount is the amount received from the customer and is allocated as follows:

• For non-TPM Customers:

  If the Payment amount entered is less than the outstanding Invoice balance, then the program assigns the entire Payment amount against the Gross amount field for the invoice when you select an invoice to pay.

  If the Payment amount entered is greater than the outstanding invoice balance then the program assigns the outstanding invoice balance to the Gross amount for the invoice when you select an invoice to pay.

• For TPM Customers:

  If the Payment amount entered against the invoice, the Gross amount against the invoice always displays the full outstanding invoice balance.

  The assumption is that you could have received a lesser amount from the customer and written off the balance of the invoice against TPM deductions.

Gross amount

• The Gross amount entered must include settlement discount, trade promotions and withholding tax.

• When you change the Gross amount, then the Discount amount and the Tax amount (if applicable) are automatically recalculated.

• When processing a payment for a TPM customer, you can distribute the difference between the Gross amount and the actual check amount you received to trade promotions which will result in TPM adjustments (see the Trade promotions deductions under the User Interface section).

• If you are using Withholding tax, then the payment amount must be equal to the Current balance when the customer pays the invoice in full, otherwise it must be equal to the payment made against the invoice plus the withholding tax portion on that amount.

  For example:

  If the customer remittance advice shows that they are only paying 100.00 on the invoice and the withholding tax portion is 100.00, then the Gross amount must be 1100 and you enter 100.00 in Withholding tax field.

Discount amount

The discount amount is the settlement discount amount applicable to the invoice.

• This is calculated automatically when paying the full invoice amount and the payment falls within the terms discount.

• No discount is calculated if the payment amount falls outside of the terms discount.

  In this case, the discount must be manually entered if required.

• The Discount amount is calculated according to the AR Invoice Terms code defined against the transaction and the options selected against the Calculation for terms discount option

  For example:

  If the Calculation for terms discount option is set to Include tax, then the Original discount amount saved for the invoice is calculated on Invoice amount + Tax amount.

  If this option is not enabled, then the Original discount amount is calculated on the Invoice amount only. The Original discount amount is only calculated at point of invoice entry.

• The discount is based on the Gross payment amount, providing this is not greater than the Current balance (i.e. the customer is not overpaying the invoice).

  If the Gross payment is greater than the Current balance, then the discount is based on the Current balance amount.

• For non-TPM customers, the discount is only calculated if the total Payment amount / undistributed amount is greater than the Outstanding balance of the invoice.

• When processing a partial payment, you must enter the discount amount manually and use the Calculate button at the Discount amount field to recalculate the Tax amount.

• When you change the Discount amount, the Tax amount is automatically recalculated if tax is applicable.

• The discount amount is posted to the Discounts ledger account.

Tax amount

The tax amount refers to the tax portion of the settlement discount or to the withholding tax amount.

• Tax portion of settlement discount

  • This only applies if the Request tax portion for invoice setup option is enabled (Setup Options > Tax > Accounts Receivable) and there is a value in the Discount amount field.
  • Tax on settlement discount can only apportioned when the Request tax portion for invoice setup option is enabled.

  • The tax portion of the discount is calculated from the Default tax code if this is not set to {none}.

    • When processing a full payment, the Tax amount is automatically recalculated when you change the Gross amount or the Discount amount.

    • No other fields are recalculated when you change the Tax amount.

    • Withholding tax is not recalculated automatically.

  • If you set the Default tax code to {none} then you need to manually enter the tax on settlement discount if required.
  • The Tax amount cannot be greater than the Discount amount.

  • The tax on discounts is calculated as follows:

    Tax on Discount =Discount x (DefaultTaxRate ÷ (DefaultTaxRate +100))

• When the Determine tax based on invoice paid setup option is enabled, credit notes and debit notes against an invoice are taken into consideration when the discount and the tax on the discount are calculated (Setup Options > Preferences > Financials > Accounts Receivable).

  • The discount is calculated as follows:

    Discount= InvoiceBal(1) ÷ (CurrencyValue + DrCrInvoiceValue) x (OrigDiscValue+DrCrDiscValue)

  • The tax on this discount is calculated as follows:

    Tax on Discount=Discount/OrigDiscValue x OrigTaxOnDisc

• Withholding tax amount

  • If you are using Withholding tax, you can enter the amount of withholding tax deducted by the customer.
  • If there is settlement discount on the invoice, then the program automatically calculates the discount amount for you.
  • However, the system assumes that you will enter the withholding tax amount from the customer's remittance advice, so if you want to check the tax withheld by your customer, you need to calculate it manually.
  • The payment amount that you enter against the invoice must be equal to the invoice balance if the customer pays the invoice in full, otherwise it must be equal to the payment made against the invoice plus the withholding tax portion on that amount.

Creating discount notes

You use the Create discount notes option to create a discount credit or debit note for the settlement discount processed as part of the payment transaction.

• The Create discount notes option applies when the Print credit or debit notes setup option is defined as As required (Setup Options > Configuration > Financial > Accounts Receivable)

Generation of discount notes

The generation of settlement discount notes is dependent on the selection at the Allow multiple invoices setup option (Setup Options > Preferences > Financials > Accounts Receivable):

• When the Allow multiple invoices setup option is enabled, then the note type is determined by the check amount.

  • If the check amount is positive, then a Credit note type is generated.

  • If the check amount is negative, then a Debit note type is generated.

  • A single discount note document is created per payment processed.

• When the Allow multiple invoices setup option is not enabled, then the note type is determined by the invoice amount.

  • If the invoice value is positive, then a Credit note type is generated.

  • If the invoice value is negative, then a Debit note type is generated.

  • A discount note document is generated for each invoice paid.

Numbering of discount notes

• Settlement discount note numbers are generated according to the Next discount credit note and Next discount debit note setup options (Setup Options > Keys > Financials).

The Invoice Filter pane was specifically designed for use when you store a large number of invoices in your database.

Due to the delay that loading large numbers of invoices causes, you can choose to load only the invoices that meet the criterion specified in the Invoice Filter pane.

• By default, all invoices excepting zero balance retained invoices are displayed in the Documents to Pay grid.

  You can use the Filter Rows (CTRL+F) listview functionality to reduce the number of invoices displayed in the Documents to Pay grid.

• You cannot apply the filter again once you have selected an invoice, but you can use the CTRL+F function to locate items once the invoices are loaded.

  Alternatively, the Age bracket column can be added to the listview to assist with filtering invoices.

• Note that once invoices have been selected for payment and you filter the rows, only invoices that meet the criteria are loaded in the grid.

  The invoices already selected for payment may now be hidden from the screen, but they are still part of the transaction calculation.

  If at any point you want to see all the processed transactions, you simply clear the filter.

  This filter is therefore more flexible than the Invoice Filter as it can use any value in any column to limit the loaded data.

• Invoice filters on transaction type cannot be used in conjunction with finance charge invoices.

Foreign currency payments

• If you enter a Payment amount in a foreign currency and Accounts Receivable is integrated to the General Ledger, then you cannot process the payment until you define a control account at the Exchange rate variance setup option (Setup Options > General Ledger Integration > Receivables Ledger Codes).

Foreign currency miscellaneous receipts

• Foreign currency miscellaneous receipt transactions can be processed if the Foreign currency sales requiredsetup option is enabled (Setup Options > Preferences > Financials > Accounts Receivable).

Currency exchange variance calculation

• The exchange rate variance is calculated as:

  Exchange variance = [Round to 2 decimals(payment rate * payment amt )] - [Round to 2 decimals (original invoice rate * payment amount )].

  The payment rate is either the rate defined on the Payment Details pane or the rate defined against the individual invoice selected for payment in the Documents to Paylistview.

  The Original invoice rate is the rate used when the invoice was originally raised and is displayed in the Invoice Details pane.

Posting currency exchange variances

• Exchange rate variances arising from payments processed in this program are posted to the Realized variance account defined in the AR Currency Variance GL Interface program.

  If the Realized variance account is not defined, then the variances are posted to the account specified at the Exchange rate variance setup option (Setup Options > General Ledger Integration > Receivables Ledger Codes).

  If the invoice being paid was revalued using the AR Exchange Rate Revaluation program, then a reversing entry to remove the unrealized loss/gain amount is also created, and the entry for the new unrealized loss/gain is also recorded.

• The exchange rate from the ArInvoice is populated with the original exchange rate when the invoice balance becomes zero.

  Therefore, when processing an adjustment against a zero balance invoice, the invoice is treated as a 'new' invoice (i.e. one against which no revaluations have occurred).

• To ensure that the unrealized variance can be reversed, the program checks the ArInvoice table for zero entries in the OrigInvRate column.

  If any revaluations were performed against the invoice, then the Exchange Rate from the BefPostConvRate column is used to populate the OrigInvRate column in the ArInvoice table.

  If no revaluations were performed on the invoice, then the ConvRate column from the ArInvoice table is used to populate the OrigInvRate column.

  The following message is displayed when duplicate invoice, debit and/or credit note numbers exist:

  The original invoice rate cannot be determined. Please contact your SYSPRO support consultant.

  In addition, a warning message is displayed when the Unrealized variance account is not defined in the AR Currency Variance GL Interface program. The AR Currency Variance GL Interface program can be accessed by selecting the Maintain hyperlink at the Variance interfaces setup option Setup Options > General Ledger Integration > Receivables Ledger Codes). The journal will be created with the missing ledger codes and placed on hold.

The following apply when selecting the Automatic function for a payment:

• Credit balance invoices are ignored.

• The Automatic option is not available when processing payments for a Trade Promotions customer.

  When applying a payment for a Trade Promotions customer, the total value of invoices selected for payment will generally exceed the total payment amount received.

  The difference must be applied to the trade promotion and to do this, the invoices must be selected manually.

  Applying the payment automatically would cause too few invoices to be paid.

• When the Request tax portion for invoice setup option is enabled (Setup Options > Tax > Accounts Receivable) and settlement discount applies to a taxable invoice, then the tax portion of the discount is calculated according to the default tax code.
• If the Request tax portion for invoice setup option is enabled and the Sales tax integration to general ledger setup option is defined as Branch level (Setup Options > Tax > Company Tax Options), then the tax portion of the discount is posted to the ledger account defined Adjustment value (tax) setup option (Setup Options > General Ledger Integration > Receivables Ledger Codes).
• If the Request tax portion for invoice option is enabled and Sales tax integration to general ledger is set to Tax code level:

  • If the Sales tax ledger code against the tax code is not defined, then the tax portion of the discount is posted to the ledger account defined Adjustment value (tax) setup option.

  • If the Sales tax ledger code against the tax code is defined and the Disburse tax portion to GL code setup option is disabled (Setup Options > Tax > Accounts Receivable), then for adjustments, tax is posted to the ledger account defined Adjustment value (tax) setup option code and for discounts, tax is posted to the ledger account defined for sales tax against the tax code.

  • If the Sales tax ledger code against the tax code is defined and the Disburse tax portion to GL code setup option is enabled, then for both adjustments and discounts, tax is posted to the ledger account defined for sales tax against the tax code.

• If you are using Withholding tax, and you process payments involving Withholding tax, then you cannot enter the Withholding tax amount when you use the Automatic function.

  This means that there is an outstanding balance equal to the withholding tax amount on each invoice processed.

  To clear this you can post an Adjustment to the invoice.

You use the Re-establish function to re-enter details of an invoice that is no longer held on file (for example when you recover a debt previously written off).

• Re-establishing an invoice merely reinstates the number of an invoice which no longer appears on the customer's account and enables you to allocate a payment to it.
• Re-establishing an invoice does not debit the customer's account with the invoice amount entered (i.e. the customer's balance is not affected by re-instating an invoice).

• You should not use the Re-establish Invoice option for duplicate payments received from customers.

  If a customer again pays an invoice which was previously paid and the invoice is no longer on file, then you should process the second payment as an Unapplied payment.

  Once you have liaised with your customer, you can either process a refund or apply the payment to other outstanding invoices.

• Once you have processed a payment against a re-established invoice, you must process the appropriate adjustment to the customer's account to contra the credit to the customer's account balance created by the payment.

  For example, if the invoice was previously written off to bad debts, you would create an adjustment debiting the customer's account and crediting bad debts recovered.

• When re-establishing an invoice, the Original branch entered is set to the transaction branch and cannot be changed by selecting the Allow overwrite branch option in the Payment Details pane.

• The Post dated checks function only applies to a Payment transaction type.
• Only post dated checks in a status of Cleared can be selected when the PD check status required setup option is enabled (Setup Options > Preferences > Financials > Accounts Receivable).

Trade promotion deductions

If the customer is defined as a Trade Promotions customer, then the customer may have taken deductions off the payment in lieu of promotions accruals. In that case, the invoices you selected to pay will add up to more than the check (payment) amount.

The options in the Trade Promotion Deductions pane enable you to allocate the difference in value between the payment amount and the invoices selected for payment to trade promotions deduction codes.

Once allocated, you can use the Deduction Review program to evaluate and either resolve or refute these deductions.

Allocation of Deduction promotions

• The sequence in which the documents are displayed in the Documents to Pay listview is crucial when posting TPM deductions.

  TPM deductions are allocated starting with the last entry in the Documents to Pay listview and progressing upwards until the entire deduction amount is allocated.

  You therefore need to ensure that the documents to which you selected to allocate the TPM deduction amount are the last ones listed in the Documents to Pay listview.

  You can use the following columns to sort the documents: Invoice, Current balance, Outstanding, Customer PO, Invoice date and Type.

Positive and negative deduction amounts

• A positive Trade Promotion deduction amount can only be applied to lines with a positive amount in the Documents to Pay listview and, similarly, a negative Trade Promotion deduction amount can only be applied to lines with a negative amount in the Documents to Pay listview.

  You cannot allocate a TPM deduction amount to a mixture of positive and negative document amounts in the Documents to Pay listview.

  If you have done this, then a TPM Allocation error message is displayed when you attempt to post the payment.

Tax calculation on deduction amount

• The tax portion of the deduction is automatically calculated according to the tax code defined for this option when the Tax included in deductions and accruals setup option is enabled (Setup Options > Tax > Trade Promotion).
• When the Canadian GST required setup option is enabled (Setup Options > Tax > Company Tax Options) and the customer is taxable, then the GST tax is calculated, followed by the tax portion and the two tax amounts are added together to give the total tax on the deduction amount.

When you post a payment:

• The customer's account is updated with the payment details entered.

• If the payment processed results in the invoice balance being reduced to zero, then the difference in days between the payment date and the invoice date is calculated and added to the total age of all zero balance invoices for the customer.

  In addition, the total number of zero balance invoices against the customer is increased by 1. These totals are used to determine the average number of days that it takes for the customer to pay an invoice.

Adjustments

• The adjustment amount is posted to the adjustment Ledger code indicated in the Documents to Adjust grid.

  The contra entry is posted to the AR branch control account.

• The tax portion entered for an adjustment is posted to the ledger account defined at the Adjustment value (tax) setup option (Setup Options > General Ledger Integration > Receivables Ledger Codes).