Chapter 73: Applying a Credit Balance

Purpose: Use the Apply Credit Balance Pop-Up Window to indicate how to apply a credit on an order due to a return, exchange, overpayment or cancellation. This window displays only when you use automatic A/R refund processing (the Process A/R Credits Immediately (E80) system control value is set to Y), and only in certain situations, described in the Overview.

In this chapter:

• Overview

• Apply Credit Balance Pop-Up Window

• Selecting Credit Dispositions

• Select Order for Credit Pop-Up Window

• Completing this Window

Overview

In standard refund processing, you use the Work with Refunds menu option (see Chapter 101: Working with Refunds, Writeoffs and Balances Due (WREF)) to review or work with all refund records and the Processing Refunds (MREF) menu option to process them. In the case of accounts receivable refunds, the system creates an A/R credit open item once this process is complete.

In automatic A/R refund processing, however, you do not need to use these two menu options for accounts receivable refunds. Instead, the system creates the A/R credit open item for a refund automatically; the refund record for this credit appears at the Work with Refunds Screen in a processed (P) status. (All other refund types continue to use the standard process.)

The Apply Credit Balance Pop-Up Window displays in situations where you are producing an A/R credit open item due to a refund, but you have the option of determining how to apply the credit. For example, you can choose to apply the credit to the current order or another existing order, or flag the credit to produce a refund check or credit card credit. In other situations, you will not have the option to determine how to apply the credit; the system creates an A/R credit open item in an open status automatically.

How to display this screen: You advance to this pop-up window automatically in order maintenance when you press F9 if all of the following are true:

• the Process A/R Credits Immediately (E80) system control value is set to Y

• the pay type on the order is either:

• an accounts receivable pay type, or

• a prepaid or credit card pay type whose alternative refund type is an accounts receivable pay type

• there are currently no A/R invoice open items in an open status for the order (for example, if A/R invoice open items for the order were previously paid or in dispute, or if the customer used a credit card pay type whose alternative refund type is an accounts receivable pay type)

• you enter a return or exchange by entering 17 next to an item, or return the entire order by pressing F17

When does the credit process automatically? The system processes the credit and applies it against the open A/R invoices for the order (if any) when you press F9 in order entry or order maintenance if:

• the Process A/R Credits Immediately (E80) system control value is set to Y, regardless of the amount you specify in the Refund check maximum field at the Create Pay Type Screen

• the pay type on the order is either:

• an accounts receivable pay type, or

• a prepaid or credit card pay type whose alternative refund type is an accounts receivable pay type

• one of the following scenarios is true:

• you enter a return or exchange by entering 17 next to an item, or return the entire order by pressing F17, and there is currently at least one A/R invoice open item in an open status for the order

• you enter a return by adding a line with a negative quantity

• you enter a prepaid order with an accounts receivable alternate refund type and there is an overpayment

• you cancel a prepaid order with an accounts receivable alternative refund type

If the pay type on the order is not accounts receivable, but has an accounts receivable alternate refund type, the system may need to create and assign a bill-to customer to the order.

Once you have created the A/R open item in order entry or maintenance, you can use another menu option, such as Work with A/R Open Items (WARI) or Using A/R Inquiry (DARI), to work with their type, status, or how they are applied.

A/R credits summary: The table summarizes the possible situations where you could produce A/R credit open items and how the system handles each scenario

Scenario	Window Displays?	Disposition of Credit	Example
You enter a return or exchange by entering 17 next to an item, or return the entire order by pressing F17, and there is currently at least one A/R invoice open item in an open status for the order	No	Allocated and applied automatically against the open A/R invoices for the order	An accounts receivable pay type was used on the order, and at least some of the items have been picked and billed; the invoice open item is in dispute (status of D)
You enter a return or exchange by entering 17 next to an item, or return the entire order by pressing F17, and there are currently no A/R invoice open items in an open status for the order	Yes	You select disposition	An accounts receivable pay type was used on the order and A/R invoice open items for the order were previously paid; or, The customer used a credit card pay type whose alternative refund type is an accounts receivable pay type
You enter a return by adding a line with a negative quantity	No	Automatically created in an open status	Any pay type creating an accounts receivable refund is used on the order
Overpayment	No	Automatically created in an open status (however, if the Method for Processing Overpayments in Order Entry (D70) system control value is set to AUTO/CONTR, or if it is set to OE PROMPT and you select to create a contribution at the prompt, a contribution will be created instead)	A prepaid pay type with an accounts receivable alternate refund type is used on the order
Cancel a prepaid order	No	Automatically created in an open status	A prepaid pay type with an accounts receivable alternate refund type was used on the order

The system creates a bill-to account as part of this process if it does not already exist.

Note: In each scenario, the Process A/R Credits Immediately (E80) system control value must be set to Y, and the pay type on the order must be either an accounts receivable pay type or have an accounts receivable pay type as the alternate refund type.

Apply Credit Balance Pop-Up Window

How to display this window: See the Overview.

Apply Credit Balance Mail Order Company Total Credit Amount : 11.00 Open A/R Balance : 90.67- Opt S P/T Description Amount Order # CR Applied Type Type options, press Enter. 4=Deselect 6=Select Invoice to Apply CR 8=Apply CR to Current Order 9=Apply CR to Current Order/Bal Chk 10=Flag as Check 11=Flag as CC 3 PREPAID W/ A/R REFUND 11.00 CM F9=Accept

Field	Description
Total credit amount	The total amount of the credit you are currently processing for the order. Numeric, 9 positions with a 2-place decimal; display-only.
Open A/R balance	The total amount of accounts receivable due or owed to the bill-to customer associated with the customer, calculated by adding all unpaid invoice open items and subtracting all credits. This total will be negative if the customer's credits are greater than open invoices. When calculating this figure, the system includes all open, allocated, or disputed open items. The A/R balance for the bill-to account is not restricted to this particular sold-to customer. Numeric, 9 positions with a 2-place decimal; display-only.
S (Selected)	This field indicates whether you have selected a disposition for the credit on the payment method. Valid values are: * = You have selected a disposition. blank = You have not selected a disposition. Alphanumeric, 1 position; display-only.
P/T (Pay type)	The payment method on the order for which you can select a credit disposition. When you select an item for return or exchange, the system checks the Invoice Payment Method file to determine which payment method on the order was applied toward this item; only payment methods applied toward returned or exchanged items will display in the window. See the Overview for more information on which pay types may appear in the window and under which circumstances. Pay types are defined in and validated against the Pay Type file. See Accounts Payable Chapter 5: Working with Pay Types (WPAY). Numeric, 2 positions; display-only.
Description	The description associated with the pay type. Alphanumeric, 30 positions; display-only.
Amount	The total amount of the credit on the payment method. Numeric, 9 positions with a 2-place decimal; display-only.
Order # applied	The order number against which you are applying the credit. This can be the current order or a different order. You select a different order by entering 6 next to the payment method and advancing to the Select Order for Credit Pop-Up Window. You can select only one order for a payment method. If you select the current order by entering 8 next to or 9 next to the payment method, this order number displays here. Numeric, 8 positions; display-only.
CR type (Credit open item type)	The type of credit open item you will create by pressing F9 at this window. For example, if you entered 10 next to the payment method to create a refund check open item, the open item type specified in the Default Check Credit Open Item Type (E82) system control value appears here. Alphanumeric, 2 positions; display-only.

Screen Option	Procedure
Deselect a payment method that you have already selected for credit disposition	Enter 4 next to the payment method. See Selecting Credit Dispositions.
Select an invoice and order to apply the credit against	Enter 6 next to the payment method to advance to the Select Order for Credit Pop-Up Window.
Apply the credit to an unpaid invoice open item on the current order; retain any unused balance as a credit open item	Enter 8 next to the payment method. See Selecting Credit Dispositions.
Apply the credit to an unpaid invoice open item on the current order; produce a refund check for any unused balance	Enter 9 next to the payment method. See Selecting Credit Dispositions.
Produce a refund check for the credit amount	Enter 10 next to the payment method. See Selecting Credit Dispositions.
Produce a credit card credit for the credit amount	Enter 11 next to the payment method. See Selecting Credit Dispositions.
Accept the information and process the credit(s)	Press F9. See Selecting Credit Dispositions.

Selecting Credit Dispositions

Purpose: Each of the options at the Apply Credit Balance Pop-Up Window are:

Deselect: Enter 4 next to a selected payment method. The asterisk (*) next to the payment method will disappear. When you press F9 to accept your selections and process credits, this payment method will create an A/R credit open item in an open (O) status for the bill-to account.

Note: It is not necessary to deselect a payment method before changing it from one disposition to another.

Select invoice: Enter 6 next to a payment method to advance to the Select Order for Credit Pop-Up Window. At this window, you can select an invoice and order associated with the bill-to account against which to apply the credit.

Apply to current order: Enter 8 next to a payment method to apply the credit to the current order. The system will pay off the invoice open item created for the order when you ship and bill additional items. This option is available only if there are open, unshipped items on the order (for example, through an exchange, a backorder, or a held item) and if the payment type on the order is accounts receivable.

When you select this option:

• an asterisk (*) displays next to the payment method

• the current order number displays in the Order # applied field

• the credit open item type specified in the Default Credit Open Item Type (C12) system control value displays in the CR type field

When you press F9 to accept your selection(s), the system creates the credit open item, and includes the current order number in the Allocated order number field. The status of the open item is allocated (A). When you ship the open item(s) on the order, the system applies the credit to the invoice open item created at that time; the invoice open item will have a status of processed (P).

Any portion of the credit unused on the current order once it is closed (shipped or canceled) will remain on the system as an open credit open item; if the entire credit is used, its status will be processed (P).

Apply to current order/check for balance: Enter 9 next to a payment method to apply the credit to the current order and create a refund check for any unused credit balance. The system will pay off the invoice open item created for the order when you ship and bill additional items. This option is available only if there are open, unshipped items on the order (for example, through an exchange, a backordered item, or a held item) and the payment type on the order is accounts receivable.

When you select this option:

• an asterisk (*) displays next to the payment method

• the current order number displays in the Order # applied field

• the credit open item type specified in the Default Check Credit Open Item Type (E82) system control value displays in the CR type field

When you press F9 to accept your selection(s), the system creates the credit open item, and includes the current order number in the Allocated order number field. The status of the open item is allocated (A). When the you ship the open item(s) on the order, the system applies the credit to the invoice open item created at that time; the invoice open item will have a status of processed (P).

Any portion of the credit unused on the current order once it is closed (shipped or canceled) will remain on the system as an open check credit open item; if the entire credit is used, its status will be processed (P). You can use the Processing A/R Refunds (MARC) menu option to produce refund checks for check credit open items.

Flag as check: Enter 10 next to a payment method to produce a refund check for the credit.

When you select this option:

• an asterisk (*) displays next to the payment method

• the credit open item type specified in the Default Check Credit Open Item Type (E82) system control value displays in the CR type field

When you press F9 to accept your selection(s), the system creates the check credit open item. The status of the open item is open (O).

You can use the Processing A/R Refunds (MARC) menu option to produce refund checks for these open items.

Flag as credit card credit: Enter 11 next to a payment method to produce a credit card credit. This option is available only for credit card payment methods.

When you select this option:

• an asterisk (*) displays next to the payment method

• the credit open item type specified in the Default Check Credit Open Item Type (E82) system control value displays in the CR type field

When you press F9 to accept your selection(s), the system creates the credit card credit open item. The status of the open item is open (O).

You can use the Processing A/R Refunds (MARC) menu option to produce credit card credits for these open items.

Accepting your selection(s): Press F9 to accept your selections and process the credits. You must press F9 to exit the screen and the order.

Default credit processing: If you have not selected a credit disposition for any payment method when you press F9, the system creates an A/R credit open item using the Default Credit Open Item Type (C12) system control value in an open (O) status.

Select Order for Credit Pop-Up Window

Purpose: Use this window to select an order and invoice to apply a credit against.

How to display this screen: Enter 6 next to a payment method at the Apply Credit Balance Pop-Up Window.

Select Order for Credit Mail Order Company Bill to . : 168 ACME INDUSTRIES GEORGE DODGESON CR Amount : 110.00 Order Invoice Invoice Due Opt Number Number Date Date Balance Type options, press Enter. 6=Apply CR to open inv for order # 7=Apply CR to open inv for order #/Bal Chk 701 55 8/28/97 8/28/97 11.00 702 56 8/28/97 8/28/97 11.00 703 58 8/28/97 8/28/97 47.28 700 60 8/28/97 8/28/97 12.00 F3=Exit F7=Apply CR by date F8=Apply Cr by date/Bal Chk F12=Cancel

Field	Description
Bill to	The number to identify the bill-to customer associated with the sold-to customer, and the bill-to customer's name or company name and name. Bill-to number: numeric, 7 positions; display-only. Company name: alphanumeric, 30 positions; display-only. Name: alphanumeric, 30 positions; display-only.
CR amount (Credit amount)	The total credit amount for the payment method that is available to be applied. Numeric, 9 positions with a 2-place decimal; display-only.
Order number	The number of the order with an A/R invoice open item in an open (unpaid) status. Numeric, 8 positions; display-only.
Invoice number	The number of the invoice associated with the invoice open item. Numeric, 7 positions; display-only.
Invoice date	The date the invoice was created on the system. Numeric, 6 positions (MMDDYY format); display-only.
Due date	The date payment on the invoice is due. Numeric, 6 positions (MMDDYY format); display-only.
Balance	The unpaid balance remaining on the invoice. Numeric, 9 positions with a 2-place decimal; display-only.

Screen Option	Procedure
Apply the credit to an invoice; retain any unused balance as a credit open item	Enter 6 next to an invoice. See Completing this Window.
Apply the credit to an invoice; produce a refund check for any unused balance	Enter 7 next to an invoice. See Completing this Window.
Apply the credit automatically to the oldest invoice; retain any unused balance as a credit open item	Press F7. See Completing this Window.
Apply the credit automatically to the oldest invoice; produce a refund check for any unused balance	Press F8. See Completing this Window.

Completing this Window

The options available at the Select Order for Credit Pop-Up Window are.

Apply credit to order: Enter 6 next to an order and associated invoice to apply the credit toward the A/R open item and retain any unused balance on the credit as a credit open item. You return to the Apply Credit Balance Pop-Up Window, where an asterisk (*) will display in the Selected field and the selected order number will display in the Order # applied field for the payment method.

When you press F9 at the Apply Credit Balance Pop-Up Window to accept your selection(s), the system creates the credit open item, and includes the selected order number in the Allocated order number field. The status of the open item is allocated (A). When the credit is processed by billing asynch, the invoice open item associated with the selected order will have a status of processed (P).

Any portion of the credit that is not used against the selected order and invoice will remain on the system as an open credit open item; if the entire credit is used, its status will be processed (P).

Apply credit to order/refund check: Enter 7 next to an order and associated invoice to apply the credit toward the A/R open item and create a refund check for any unused balance. You return to the Apply Credit Balance Pop-Up Window, where an asterisk (*) will display in the Selected field and the selected order number will display in the Order # applied field for the payment method. Also, the credit open item type specified in the Default Check Credit Open Item Type (E82) system control value displays in the CR type field.

When you press F9 at the Apply Credit Balance Pop-Up Window to accept your selection(s), the system creates the credit open item, and includes the selected order number in the Allocated order number field. The status of the open item is allocated (A). When the credit is processed by billing asynch, the invoice open item associated with the selected order will have a status of processed (P).

Any portion of the credit that is not used against the selected order and invoice will remain on the system as an open refund check credit open item; you can use the Processing A/R Refunds (MARC) menu option to produce refund checks for these open items. If the entire balance of the credit open item is exhausted by payment of the invoice open item, the credit will have a status of processed (P); however, the open item type will remain the default refund check type.

Apply credit to order by date: Press F7 to apply the credit as payment against the oldest open invoice open item. The system selects the oldest A/R invoice open item with an unpaid balance automatically.

You return to the Apply Credit Balance Pop-Up Window, where an asterisk (*) will display in the Selected field and the selected order number will display in the Order # applied field for the payment method.

When you press F9 at the Apply Credit Balance Pop-Up Window to accept your selection(s), the system creates the credit open item, and includes the selected order number in the Allocated order number field. The status of the open item is allocated (A). When the credit is processed by billing asynch, the invoice open item associated with the selected order will have a status of processed (P).

Any portion of the credit that is not used against the selected order and invoice will remain on the system as an open credit open item; if the entire credit is used, its status will be processed (P).

Apply credit to order by date/refund check: Press F8 to apply the credit as payment against the oldest open invoice open item and create a refund check for any unused balance. The system selects the oldest A/R invoice open item with an unpaid balance automatically. You return to the Apply Credit Balance Pop-Up Window, where an asterisk (*) will display in the Selected field and the selected order number will display in the Order # applied field for the payment method. Also, the credit open item type specified in the Default Check Credit Open Item Type (E82) system control value displays in the CR type field.

When you press F9 at the Apply Credit Balance Pop-Up Window to accept your selection(s), the system creates the credit open item, and includes the selected order number in the Allocated order number field. The status of the open item is allocated (A). When the credit is processed by billing asynch, the invoice open item associated with the selected order will have a status of processed (P).

Any portion of the credit that is not used against the selected order and invoice will remain on the system as an open refund check credit open item; you can use the Processing A/R Refunds (MARC) menu option to produce refund checks for these open items. If the entire balance of the credit open item is exhausted by payment of the invoice open item, the credit will have a status of processed (P); however, the open item type will remain the default refund check type.