Canceling or Refunding Payments for Service Purchase Items

You can use any of the transactions available in the Maintenance Worksheet for service purchase (SP) items, but keep in mind the following information:

• New credits and debits created as a result of MT-04 (Create New Debit) and MT-05 (Create New Credit) will not have an SP_ID value and will not be part of the Service Purchase transaction. Therefore, subsequent activities for these new credits and debits will not generate Integration Broker (IB) messages to send to Pension Administration.

• Write-off actions for SP Items will not be communicated to Pension Administration, even though write-offs are allowed for SP Items. The Receivables user thus takes the responsibility for possible out-of-synch scenarios as a result of write-offs. However, used with discretion, write-offs can potentially be a good tool to solve out-of-synch scenarios in which HCM makes manual adjustments on the Pension side.

• Partial payments are allowed. When an item is partially paid, the action creates a new line with the same Item ID in the worksheet. Because the new line has the same Item ID, it is automatically populated with the same Tax Type and SP_ID as shown in the original line. The PAY message will always communicate the amount that has been paid.

• Matches done in the maintenance worksheet for SP Items against On-Accounts, Prepayment, or any other credit (which has not been created by a CNL message) also produces PAY messages since it affects the balance of the SP Items. It will only produce CNL messages if a credit for cancellation is selected in the worksheet.

To cancel a service purchase item, you must select and use a Maintenance Worksheet to match credits with their appropriate debit items. Even if the payment method for the credit to be canceled is direct debit (DD), you must use the Maintenance Worksheet.

1. Select a Maintenance Worksheet for payment cancellation.

   Access the Worksheet Selection page (Accounts Receivable > Receivables Maintenance > Maintenance Worksheet > Create Maintenance Worksheet > Worksheet Selection).

   See Maintaining Customer Accounts Using Worksheets.

2. Match credits for payment cancellation.

   The credits sent from Pension Administration through a message with Request Code = RFD should never be matched against any debit item. The only transaction type valid for them is Refund. Also, the credits sent through a CNL message should never be refunded.

   Service purchase debit items should be canceled on a separate Maintenance Worksheet from other debit items.

   Once the items are canceled on the first Maintenance Worksheet and Receivables Update is run, a message is sent to Pension Administration using the Request Code = CNL, which indicates that the debit items were successfully canceled.

   Note: If a user selects all of the debit items in a Maintenance Worksheet in which a credit for cancellation has been selected, the system will display this warning: “A credit for cancellation has been selected for this worksheet, which means that every debit item that you selected on this worksheet will be canceled. If there are debit items that you do not want to cancel, deselect these debit items before continuing with the cancellation process.”

   After debit items are matched on the second Maintenance Worksheet with On-Accounts, Prepayments, or any other kind of credits, and Receivables Update processing is done, a message is sent to Pension Administration using the Request Code = PAY, which indicates that these items were successfully paid.

Cancellation of the service purchase invoice can be accompanied by a request for a refund (RFD) of the paid amount. When a refund is requested, Pension sends Receivables another IB message to create another credit memo. This credit for a refund should not be matched with a debit on the Maintenance Worksheet; it should only be refunded.

The following diagrams illustrate

Standard Service Purchase Invoice Creation Request (Step A)

Maintenance Worksheet cancellation of a Service Purchase transaction without refund of paid amount (Step B)

Maintenance Worksheet cancellation of a Service Purchase transaction with request for refund of invoice amount (Step C)

If an item is created in Receivables with a tax type (Pre-Tax or Post-Tax) that has changed, Pension Administration will send a credit memo with the same tax type to cancel the item and then it will send a new item with updated tax type. The credit will be sent to Receivables using the request code CNL. It will have the same installment number of the debit item that requires canceling. The new debit with the updated tax type will be sent to Receivables using the request code CRT, which the system uses to create new debit items.

When Receivables Update posts the match of the CNL credit and the item with original tax type, a message will be sent to Pension Administration that both activities were successful using the request code CNL.