When a payment event occurs, the system stores a tender for each form of remittance (e.g., cash, check, charge). It then allocates the sum of the tenders to one or more accounts.
Typically the amount represented by the sum of the tenders are distributed to the account that remits the tenders. You may override this default and specify any number of accounts and their respective payment allocation amount. This is useful, for example, when a social service agency pays for many accounts. If applicable, you may also configure the system to use your own payment event distribution rule(s).
The system distributes a payment amongst an account's obligations based on the age of each obligation's debt AND distribution priority. The system creates a payment segment for each obligation that receives part of the payment.
You may manually redistribute the payment amount amongst the account's obligations before you commit the distribution. When the distribution is acceptable, you freeze the payment. Freezing a payment causes the system to create a financial transaction for each related payment segment. It is the financial transaction(s) that causes the obligations' payoff and current balances to be reduced. The financial transaction also contains the journal details that debit "cash" and credit some other GL account.
And that's it. The remaining topics in this section provide more information about the creation and allocation of payment events.
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