AutoCash
The Post QuickCash program uses AutoCash rules to determine how to automatically apply your receipts. Receivables uses your customer's open balance along with the AutoCash rules to determine how to apply receipts and whether you allow partial payments to be applied to your customer's items. If Receivables is not able to apply or fully apply a receipt, you can specify whether the remaining amount is left as Unapplied or On-Account.
Receivables provides five AutoCash rules you can use to create your AutoCash rule sets. See: AutoCash Rules. When you define your AutoCash rule sets, you specify which rules to use and the sequence of these rules. For each AutoCash rule set, you can determine how Receivables calculates your customer's open balance.
Calculating Your Customer's Open Balance
Receivables uses the values for each customer's profile class and the Open Balance Calculation region of the AutoCash Rule Sets window when calculating your customer's open balance. If the Discount parameter for this AutoCash Rules Set option is set to a value other than 'None', the Payment Terms and number of Discount Grace Days specified in this customer's profile class determine the discount amount for each transaction. The system option Allow Unearned Discounts determines whether you can include earned and unearned discounts for this AutoCash Rule Set. Additionally, the Items in Dispute option for this AutoCash rule set determines whether items that are in dispute will be included when calculating your customer's open balance.
Automatic Matching Rules
Apply Partial Receipts
A partial receipt is a receipt that is less than the amount required to close the debit item to which it is applied. If you are using the Apply to the Oldest Invoice First rule, Receivables lets you determine if you want to be able to apply a partial payment to your customer's debit items. The Apply Partial Receipts option in the AutoCash Rule Sets window determines whether Receivables can apply a partial payment to an open debit item.
The options that Receivables uses to calculate your customer's open balance affect the meaning of partial payments. For example, you have the following situation:
Discounts = No
Apply Partial Receipts = No
Finance Charges = Yes
Items in Dispute = No
Receipt = $100
Invoice #25 = $100
Finance Charge for Invoice #25 = $10
In this example, Receivables will not be able to apply the $100 receipt to Invoice #25 because the total remaining amount on the invoice is $110 and Apply Partial Receipts is set to No. The status of the receipt amount will depend on the value you enter for the Remaining Remittance Amount.
Remaining Remittance Amount
If you are using the Apply to the Oldest Invoice First rule, Receivables lets you determine the status of any remaining remittance amounts. If Receivables cannot fully or partially apply a receipt using any of the AutoCash rules in your AutoCash Rule set, it will either mark the remaining amount 'Unapplied' or place it 'On Account.' You choose one of these options in the Remaining Remittance Amount field in the AutoCash Rule Sets window.
Matching Using Bank Charges and Tolerance Limit
If you have set up your system to use bank charges and a tolerance limit, Receivables will also consider these amounts if the current AutoCash rule does not find a match. If Receivables cannot find a match using bank charges or tolerance limit, it looks at the next rule in the sequence.
For Receivables to consider bank charges and tolerance limits, the following must be true:
- The profile option AR: Create Bank Charges is set to Yes
- The Receipt Class has a receipt creation status of 'Cleared' (this is necessary as Receivables assumes you know the bank charge only after the receipt has been cleared by the bank)
- You have defined a General Ledger account for Bank Charges for each Remittance bank account
- The AutoCash rule did not find an exact match
Example:
This example uses the AutoCash rule 'Match Payment with Invoice' to explain matching using bank charges and tolerance limit.
If it cannot match the receipt amount with an invoice, Receivables will attempt to match the sum of the receipt amount plus the bank charges to the invoices. If these amounts match, Receivables applies the receipt; otherwise, it will attempt to apply the sum of the receipt amount plus the tolerance limit to the invoice with the lowest value. If there are two or more invoices with equal amounts, Receivables will apply the receipt to the invoice with the oldest due date.
Consider the following example:
Receipt = $980
Bank Charge = $3
Tolerance Limit = $20
| Invoice #
| Amount
|
| 701
| $985
|
| 702
| $990
|
| 703
| $995
|
Receivables will attempt to exactly match the receipt amount with an invoice. After failing to do so, Receivables attempts to match the sum of the receipt plus the Bank Charge ($983) to the invoices. When this also fails, Receivables attempts to apply the sum of the receipt plus the Tolerance Limit ($1,000) to the invoice with the lowest amount (to minimize the bank charges incurred). In this example, Receivables will apply $985 to invoice #701, thereby incurring a $5 bank charge.
Receipt = $980
Inv. #701 = <$985>
Bank Charge: <$5>
AutoCash Rules
Receivables provides five AutoCash rules that you can use to create your AutoCash rule sets. When you run Post QuickCash to apply your customer's receipts, Receivables tries to use each AutoCash rule within an AutoCash rule set. If the first rule in the set does not find a match, Receivables uses the next rule in the sequence, and so on until it can apply the receipt.
Following are the AutoCash rules you can use:
- Match Payment with Invoice
- Clear Past Due Invoices Grouped by Payment Term
- Apply to the Oldest Invoice First
If you have set up Receivables to use Bank Charges, each AutoCash rule (except Apply to the Oldest Invoice First) can also consider bank charges and tolerance limits when attempting to match payments with invoices.
See: Matching Using Bank Charges and Tolerance Limit.
Match Payment with Invoice
When using this rule, Receivables can only apply the receipt to a single invoice, debit memo, or chargeback if the receipt amount matches the amount of the debit item. If more than one debit item has an open amount that matches the receipt amount, Receivables applies the receipt to the item with the earliest due date. If more than one debit item exists with the same amount and due date, Receivables applies to the item with the lowest payment schedule id number (this is an internal, system-generated number).
Receivables uses the values you entered for the open balance calculation and the number of discount grace days you specified in this customer's profile class to determine the remaining amount due of the debit item. For example, you have the following situation:
Discounts = Earned Only
Finance Charges = No
Receipt = $1800
Receipt Date = 14-JAN-93
Discount Grace Days = 5
Inv.
No.
| Inv.
Amt
| Fin Chrgs.
| Payment
Terms
| Inv.
Date
| Due
Date
|
| 600
| $2000
| $20
| 10% 10/Net 30
| 01-JAN-93
| 30-JAN-93
|
Since Finance Charges is set to No, Receivables subtracts the $20 finance charges from the amount of the invoice, reducing the amount to $2000. The payment terms assigned to this invoice include a 10% discount if the invoice is paid within 10 days and our open balance calculation allows us to take earned discounts. Even though the invoice is paid after the 10 day period, Receivables adds the 5 discount grace days, making this invoice eligible for a 10% discount. The remaining amount due of this invoice on January 14 is $1800. Since the remaining amount due of the invoice matches the receipt amount, the receipt is applied. If no discount grace days were offered, Receivables would not be able to apply the receipt because the remaining amount of the invoice would be $2000.
Note: If this AutoCash rule fails and you have set up your system to use bank charges and a tolerance limit, Receivables will compare the receipt amount plus bank charges to the invoice. If this fails, Receivables will compare the receipt amount plus tolerance limit to the invoice. If it finds a match, Receivables applies the receipt; otherwise, it looks at the next AutoCash rule in the sequence. For more information, see: Matching Using Bank Charges and Tolerance Limit.
Clear the Account
When using this rule, Receivables can only apply the receipt if the receipt amount matches your customer's open balance. Receivables includes all open debit and credit items when calculating your customer's open balance. Open credit items include credit memos, on account credits, and on account and unapplied cash.
Receivables uses the options you specified for the open balance calculation and the number of discount grace days that you defined for this customer's profile class to determine your customer's open balance. For example, you have the following situation:
Finance Charges = Yes
Items in Dispute = Yes
Receipt = $590
| Past Due Debits/Credits
| Invoice
Amount
| Finance
Charges
| In Dispute
|
| Invoice #45
| $500
| $40
| Yes
|
| Invoice #46
| $300
| $0
|
|
| Credit Memo #100
| $50
|
|
|
| Unapplied Cash
| $200
|
|
|
Since Finance Charges and Items in Dispute are set to Yes, the open balance for this customer is $590. Because the receipt amount matches your customer's open balance, the receipt can be applied.
Note: If this AutoCash rule fails and you have set up your system to use bank charges and a tolerance limit, Receivables will compare the receipt amount plus bank charges to your customer's open balance. If this fails, Receivables will compare the receipt amount plus tolerance limit to the your customer's open balance. If it finds a match, Receivables applies the receipt; otherwise, it looks at the next AutoCash rule in the sequence. For more information, see: Matching Using Bank Charges and Tolerance Limit.
Clear Past Due Invoices
When using this rule, Receivables can only apply a receipt if the receipt amount matches your customer's past due account balance. Receivables includes all open past due debit and credit items when calculating your customer's past due account balance.
A debit item is considered past due if the invoice due date is earlier than or equal to the receipt date of the receipt being applied to this invoice. For unapplied and on account cash, Receivables uses the receipt date, and for credit memos and on account credits Receivables uses the credit memo date to determine whether to include these amounts in the customer's account balance. For example, if you are trying to apply a receipt with a receipt date of 10-JAN-93, all unapplied and on account cash as well as credit memos and on-account credits that have a transaction date (receipt date or credit memo date) on or earlier than 10-JAN-93 will be included when calculating this customer's account balance.
Receivables uses the options that you entered for the open balance calculation and the number of discount grace days that you specified for this customer's profile class to determine your customer's past due account balance. The values you choose for the Finance Charges and Items in Dispute options may prevent a past due debit item from being closed, even if the receipt amount matches your customer's past due account balance. For example, you have the following situation:
Finance Charges = No
Items in Dispute = No
Receipt = $420
| Past Due Debits/Credits
| Invoice
Amount
| Finance
Charges
| In Dispute
|
| Invoice #209
| $300
| $0
|
|
| Invoice #89
| $250
| $0
| Yes
|
| Invoice #7
| $120
| $30
|
|
Since Finance Charges and Items in Dispute are set to No, Receivables does not include Invoice #89 ($250) or finance charges for Invoice #7 ($30) when calculating this customer's past due account balance. Therefore, the past due account balance for this customer is $420. Because the receipt amount matches your customer's past due account balance, the receipt can be applied; however, Invoice #7 and #89 are still open, past due debit items.
Note: If this AutoCash rule fails and you have set up your system to use bank charges and a tolerance limit, Receivables will compare the receipt amount plus bank charges to your customer's past due account balance. If this fails, Receivables will compare the receipt amount plus tolerance limit to the past due account balance. If it finds a match, Receivables applies the receipt; otherwise, it looks at the next AutoCash rule in the sequence. For more information, see: Matching Using Bank Charges and Tolerance Limit.
Clear Past Due Invoices Grouped by Payment Term
When using this rule, Receivables can only apply a receipt if the receipt amount matches the sum of your customer's credit memos and past due invoices. This rule is similar to the Clear Past Due Invoices rule, but it first groups past due invoices by their payment term, and then uses the oldest transaction due date within the group as the group due date.
A debit item is considered past due if the invoice due date is earlier than the deposit date of the receipt being applied to this invoice. For credit memos, Receivables uses the credit memo date to determine whether to include these amounts in the customer's account balance. For example, if you are trying to apply a receipt with a receipt date of 10-JAN-93, credit memos that have a transaction date (credit memo date) on or earlier than 10-JAN-93 will be included. Credit memos do not have payment terms, so they are included in each group.
Receivables uses the options that you entered for the open balance calculation and the number of discount grace days that you specified for this customer's profile class to determine the sum of your customer's credit memos and past due invoices. The values you specify for the Finance Charges and Items in Dispute options may prevent a past due debit item from being closed, even if the receipt amount matches the sum of your customer's credit memos and past due invoices. Consider the following situation:
Receipt = $900 on 25-JUN
| Trx. Number
| Payment Term
| Due
| Invoice
Amount
|
| 1
| A
| 25-MAY
| $500
|
| 2
| A
| 25-JUN
| $200
|
| 3
| A
| 25-JUN
| $200
|
| 4
| B
| 20-JUN
| $900
|
| 5
| C
| 25-MAY
| $905
|
Receivables will group these transactions as follows:
Group 1: Trx 1,2,3
Amount: $900
Group Due Date: 25-MAY
Group 2: Trx 4
Amount: $900
Group Due Date: 20-JUN
Group 3: Trx 5
Amount: $905
Group Due Date: 25-MAY
Since Groups 1 and 2 match the receipt amount, Receivables will select the group with the oldest due date (Group 1) and apply the receipt to those transactions.
Note: If this AutoCash rule fails and you have set up your system to use bank charges and a tolerance limit, Receivables will compare the receipt amount plus bank charges to the sum of your customer's credit memos and past due invoices for that payment term. If this fails, Receivables will compare the receipt amount plus tolerance limit to the group with the smallest sum of credit memos and past due invoices (if there are two or more groups with the same combined amount Receivables will select the group with the oldest due date). If it finds a match, Receivables applies the receipt; otherwise, it looks at the next AutoCash rule in the sequence. For more information, see: Matching Using Bank Charges and Tolerance Limit.
Apply to the Oldest Invoice First
When using this rule, Receivables applies receipts to your customer's debit items starting with the item having the oldest due date. Receivables uses the values that you entered for the open balance calculation and your automatic matching rules to determine your customer's oldest outstanding debit item.
For example, you have the following situation:
Partial Payments = Yes
Finance Charges = No
Receipt = $200
| Invoice #
| Invoice
Amount
| Finance
Charges
| Due Date
|
| 801
| $0
| $35
| 01-DEC-92
|
|
|
|
|
| 707
| $450
| $0
| 01-JAN-93
|
If you compare only the due dates for the two invoices, invoice #801 is the oldest invoice, but Receivables also checks the options that you entered for both your open balance calculation and automatic matching rule. Since Finance Charges is set to No, Receivables ignores invoice #801 (since the remaining amount only consists of finance charges) and applies the $200 receipt to invoice #707.
If Apply Partial Receipts was set to No, Receivables would not be able to apply this receipt and would look at the next rule in the sequence.
Note: Matching using bank charges and a tolerance limit does not apply to this AutoCash rule.
Example
Assume that you have defined the following AutoCash rule set:
Open Balance Calculation
Automatic Matching Rules
- Apply Partial Receipts: Yes
- Remaining Remittance Amount: On-Account
Sequence of AutoCash Rules
- 1. Match Payment with Invoice
- 3. Apply To The Oldest Invoice First
* Assume that the customer, Global Freight Carriers, has no payment or discount grace days.
A payment was entered for Global Freight Carriers for $600 through the QuickCash window with a deposit date of 10-DEC-92.
Global Freight Carriers has the following outstanding invoices, none of which are in dispute:
| Number
| Amt Remaining
| Due Date
| Discount Date/Amt
|
| 123
| $200
| 11-DEC-92
| 01-DEC-92/$20
|
| 124
| $300
| 08-DEC-92
| 30-NOV-92/$30
|
| 125
| $150
| 13-DEC-92
| 28-NOV-92/$15
|
Results:
- AutoCash rule 1, Match Payment with Invoice, fails because none of the customer's open items have a remaining amount due that is equal to the amount of the receipt ($600). The Post QuickCash program now looks at AutoCash rule 2.
- AutoCash rule 2, Clear The Account, fails because this customer's calculated account balance ($650) is not the same as the amount of the receipt. The Post QuickCash program now looks at AutoCash rule 3.
- Using AutoCash rule 3, Receivables first applies the receipt to the oldest invoice. $300 of the receipt is applied to invoice #124. Since the discount date of 30-NOV-92 has passed and the Discount field for the Open Balance Calculation is set to Earned Only, the $30 discount is no longer available. The amount due remaining for this invoice is now equal to either $0 or the amount of any finance charges previously assessed for this item. Finance charges are not included in your customer's open balance calculation since this option is set to No. The remaining receipt amount is now $300.00.
Receivables now applies $200 to invoice #123, which is the next oldest invoice. Just like invoice #124, the discount date for invoice #123 has passed and the $20 discount is no longer available. The amount due remaining for this invoice is now equal to either $0 or the amount of any finance charges previously assessed for this item. Finance charges are not included in your customer's open balance calculation since this option is set to No. The remaining receipt amount is now $100.
Finally, Receivables applies the remaining $100 to invoice #125 ($150) as a partial receipt because the Apply Partial Receipts matching rule is set to Yes. (If this was set to No, the remaining amount could not be applied to invoice #125 and would be placed on account, since the Remaining Remittance Amount matching rule is set to On Account.) Just like the other invoices, the discount date for invoice #125 has passed and the $15 discount is no longer available. If there are no finance charges for this invoice, the amount due remaining for invoice #125 is reduced from $150 to $50, and remains open.
See Also
Receipts
AutoCash Rule Sets.
Post QuickCash
AutoCash Rules Report
Bank Charges
Discounts in Post QuickCash
