Understanding Customer Account Maintenance

PeopleSoft Receivables provides two options to maintain customer account balances. Each option offsets debit items with credit items and writes off items that meet the write-off tolerances:

  • The Automatic Maintenance Application Engine process (AR_AUTOMNT) automatically matches debits and credits and writes off remaining balances that meet the write-off tolerances.

    The process places them in match groups based on the methods that you set up.

  • The maintenance worksheet provides a method that enables you to offset debit and credit items manually or to write off items and remaining balances.

    The maintenance worksheet enables you to offset all items in the worksheet or to enter match criteria that generates match groups.

This section discusses:

  • Write-off tolerances

  • Write-off approvals

  • Process flow

The system uses the write-off tolerances that you defined for the customer, business unit, and entry reason assigned to the write-off item to determine whether the item is eligible to be written off automatically or on the maintenance worksheet. The system also uses the write-off tolerances for the user using the worksheet to determine whether items on a worksheet can be written off. The system uses the most restrictive write-off tolerance values. For example, if the maximum write-off amount is 100.00 for a business unit, 20.00 for a customer, 50.00 for a deduction reason, and 30.00 for the user, the maintenance worksheet uses the 20.00 maximum write-off requirement for the customer because it is the most restrictive.

Note: If you enable a user to override write-off tolerances on the maintenance worksheet, the write-off must still meet the write-off tolerances for the user.

The tolerances determine the maximum amount that the system can write off and the minimum age of an item before the system can write it off. To determine whether to write off an item, the system checks:

  • Whether the write-off amount is less than or equal to the tolerance amount over the life of the item.

  • Whether the write-off amount of the item is less than or equal to the tolerance percentage of the open amount of the item on the maintenance worksheet over the life of the item.

    The Automatic Maintenance process compares the tolerance percentage to the percentage that the remaining balance for a match group is of the total amount of the debit or credits (whichever is higher).

    Note: If you select No Match Write-Off for a step in an automatic maintenance method, the Automatic Maintenance process does not check the percentage tolerance because the percentage will always be 100.

  • Whether the number of days that the item has been open exceeds the specified tolerance days until write-off.

    The system determines the number of days that the item has been open by subtracting the item's accounting date from the system date.

The write-off approval workflow is designed to require approval for write-off amounts entered on the maintenance worksheet that are below the write-off tolerances but above the approval-needed limit. This approval workflow is controlled by the Approval Framework feature in PeopleSoft Enterprise Components. You must set up the write-off approval workflow before using this feature.

Note: The write-off approval workflow is designed to require approval for write-off amounts entered on the payment worksheet, maintenance worksheet, or draft worksheet only. The workflow does not pick up write-off transactions from processes such as the Automatic Maintenance process.

To maintain customer account balances:

  1. (Optional) Run the Automatic Maintenance process.

  2. Enter item selection criteria and matching criteria, and build maintenance worksheets.

  3. Use the worksheet to match debits and credits and create write-off, refund, and adjustment items.

    Note: If you specify in the automatic maintenance method that you want to generate a worksheet for specific conditions, the Automatic Maintenance process automatically builds the worksheet. Use the worksheet to review the maintenance groups before posting.

  4. Set the maintenance worksheet to post.

    Each maintenance worksheet creates one maintenance group. The next time that the Receivables Update Application Engine process (ARUPDATE) runs, the system updates the customer balances and item activity for the selected items and generates the appropriate accounting entries.

    Note: The Automatic Maintenance process also creates maintenance groups and automatically sets them to post, unless the automatic maintenance method indicates that the process should generate a worksheet.