Using the Cash Drawer
This topic provides an overview of the process flow for payments and deposits and how they are handled by PeopleSoft Order Management, Accounts Receivable, Billing, and Accounts Payable.
The section describes:
Standard order payment processing.
Processing orders with deposits.
Processing refunds for cancelled orders.
The following diagram shows a high level view of the cash receipts payment flow. As cash drawer payments are processed the receipts follow a standard flow.
Note: It is highly recommended that PeopleSoft Billing to Receivables processes be run prior to Cash Receipt Payments to Receivables processes. This is to help ensure that an open item is created for the invoice prior to the payment matching process. Also, it is recommended that the Receivables Payment Predictor process is run with the #REFS algorithm group.
These sections provide several examples of order payment processing.
Order Is Paid in Full – Open Item for the Invoice Is Created Before the Payment Is Created in Receivables
Suppose you have a counter sale order for 100 USD and the customer pays the order in full at the time of purchase and immediately takes the goods. In this example, the invoice is sent to Accounts Receivable prior to the payment being created in Receivables.
The order is entered and the payment is recorded in the Counter Sale component.
The Order Management Billing process (OM_BILL) sends an invoice to Billing.
Billing creates a pending item in Accounts Receivable.
The Accounts Receivable Update process creates an open item for the invoice.
The customer balance is updated by 100 USD. The open item has both an invoice and a sales order reference.
The cash drawer is reconciled and the Cash Drawer Receipts process (CDR_LOADPMT) sends a payment of 100 USD to Accounts Receivables referencing the sales order.
The Accounts Receivable Payment Interface process creates a payment for 100 USD referencing the same sales order.
The Accounts Receivable Payment Predictor process applies the payment to the open item by matching a payment sales order reference to an open item sales order reference.
This assumes that the Payment Predictor method uses #REFS algorithm group.
The Accounts Receivable Update process updates open item activity and reduces the customer balance by 100 USD.
The table illustrates the accounting events that take place in this example:
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
100 USD
100 USD
DR to Accounts Receivable for 100 USD
CR Revenue 100 USD
Cash Payment (AR_Payload)
100 USD
DR Cash 100 USD
Cash Payment applied to Invoice WS-01
Closed
Applied
0 USD
CR to Accounts Receivable for 100 USD
Order Is Paid in Full — The Payment Is Created Before the Open Item for the Invoice Is Created in Receivables
Suppose you have a sales order for 100 USD and the customer pays the order in full at the time of purchase and immediately takes the goods. This example is the same as the above example, except the payment is sent to Accounts Receivable before the invoice is sent. Also in this example, the Accounts Receivable Payment Predictor is configured to create on-account open items for payments not applied.
The order is entered and the payment is recorded in the Counter Sale component.
The cash drawer is reconciled and the Cash Drawer Receipts process (CDR_LOADPMT) sends a payment of 100 USD to Accounts Receivable referencing the sales order.
The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 100 USD referencing this sales order.
Depending on your system configuration there are different ways the Accounts Receivable Payment Predictor might proceed.
If the Accounts Receivable Payment Predictor process uses the #REFS algorithm group and if the Payment Predictor is configured to create an on-account open item for unapplied payments, then this will occur:
The Payment Predictor process will not find an open item to which it should apply the payment because an open item with an invoice has not been created yet.
The Payment Predictor process will create an on-account pending item for the unapplied payment.
The Accounts Receivable Update process creates an on-account open item for -100 USD and updates the customer balance by -100 USD.
OM_BILL sends an invoice to Billing.
Billing creates a pending item in Accounts Receivable.
The Accounts Receivable Update process creates an open item from invoice and updates the customer balance by 100 USD. Open item references both the invoice and the sales order.
The Accounts Receivable Auto Maintenance process attempts to match the invoice open item and the on-account item.
This assumes the auto maintenance method is set to match by sales order number. The process finds a match because the on-account open item has the sales order number associated with the payment.
The Accounts Receivable Update closes all open items.
The table illustrates the accounting events that take place in this example:
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Cash Payment (AR_Payload)
100 USD
Dr Cash 100 USD
Payment converted to On-Account WS-05
-100 USD (on-account)
Applied
-100 USD
Cr Accounts Receivable 100 USD
Invoice creates Open Item IT-01
100 USD (invoice)
0 USD
Dr Accounts Receivable 100 USD
Cr Revenue 100 USD
Invoice Matched with On-Account MT-01
On-Account – closed
Invoice – closed
0 USD
Order Is Paid in Full — The Payment Is Created Before Open Item for the Invoice in Receivables — No Action for Unapplied Items
Suppose you have a sales order for 100 USD. This sales order is paid in full at the time of purchase and the goods are taken immediately. The payment is sent to Accounts Receivable in advance of the invoice. This example is the same as the above example, except that the Accounts Receivable Payment Predictor is configured not to do anything for payments not applied.
The order is entered and the payment is recorded in the Counter Sale component.
The cash drawer is reconciled and the Cash Drawer Receipt (CDR_LOADPMT) process sends a payment of 100 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 100 USD which also references the sales order.
The Accounts Receivable Payment Predictor does nothing for payments not applied, and thus releases the payment for manual matching at a later time.
Note: You must update the payment online in order for it to be picked up by payment predictor again.
The customer balance does not change as a result of this payment.
OM_BILL sends an invoice to Billing.
Billing creates a pending item in Accounts Receivable.
The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 100 USD. The open item references both the invoice and the sales order.
You must now manually apply the customer's payment to the invoice open item using the Payment Worksheet.
The Accounts Receivable Update process closes the open items, and updates the customer balance by –100 USD.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Cash Payment
100 USD
Dr Cash 100 USD
Invoice creates Open Item IT-01
100 USD
100 USD
Dr Accounts Receivable 100 USD
Cr Revenue 100 USD
Cash Payment Applied to Invoice WS-01
Closed
Applied
0 USD
Cr Accounts Receivable 100 USD
Order Is Paid in Full — Partial Payment Made with a Corporate Voucher Scenario
A sales order is created for 100 USD and paid in full at the time the order is placed. The sales order is partially paid with a 10 USD corporate voucher. The balance of 90 USD is paid with another payment method. In this example, the invoice is sent to Accounts Receivable first. Also in this example, assume the Accounts Receivable Payment Predictor matches payments using the #REFS algorithm group.
The order is entered and the corporate voucher payment is recorded in the Counter Sale component.
The Order Management Billing process (OM_BILL) sends an invoice to Billing for 100 USD.
This same process also sends an invoice line to Billing for -10 USD for the voucher. The invoice total is 90 USD.
Billing creates a pending item in Accounts Receivable.
The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 90 USD. The open item references both the invoice and the sales order.
The Cash Drawer is reconciled and the Cash Drawer Receipt (CDR_LOADPMT) process sends a payment of 90 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface (AR_PAYLOAD) process creates a payment for 90 USD, which references the sales order.
The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment invoice reference to the open item invoice reference.
The Accounts Receivable Update process closes the open item.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
90 USD
90 USD
Dr Accounts Receivable 90 USD
Cr Revenue 100 USD
Cr Voucher Discount -10 USD
Cash Payment (AR_PAYLOAD)
90 USD
Dr Cash 90 USD
Cash Payment applied to Invoice WS-01
Closed
Applied
0 USD
Cr Accounts Receivable 90 USD
Sales Order Partial Immediate Pay Remainder on Account Scenario
A sales order is created for 100 USD. The sales order is partially paid, 25 USD, at the time the order is placed, and the balance is to be paid on account. For this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.
The order is entered and the partial payment or 25 USD is recorded in the Counter Sale component.
The Order Management Billing process, (OM_BILL) sends an invoice to Billing for 100 USD.
Billing creates a pending item in Accounts Receivable.
The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 100 USD. The open item references both the invoice and the sales order.
The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 25 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 25 USD which references the sales order.
The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment invoice reference to the open item invoice reference.
The Accounts Receivable Update process updates the customer balance to 75 USD.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
100 USD
100 USD
Dr Accounts Receivable 100 USD
Cr Revenue 100 USD
Cash Payment (AR_Payload)
25 USD
Dr Cash 25 USD
Cash Payment applied to Invoice
Applied
25 USD
Cr Accounts Receivable 25 USD
These sections provide some examples of how sales orders that contain deposits are processed.
Deposit Payment Scenario
Suppose you have a sales order for 125 USD. The customer is unable to take the goods with them at the time of the order. Perhaps the goods are on backorder or special order. The customer is required to pay a 50 USD deposit for the order. In this example the invoice is sent to Accounts Receivable first.
The order is entered and a deposit payment of 50 USD is recorded in the Counter Sale component.
Note: A deposit can also be recorded in the regular sales order entry component.
OM_BILL sends an invoice for the 50 USD deposit to Billing.
Billing creates a pending item in Accounts Receivable.
An open item is created for 50 USD for the invoice that contains the deposit.
The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 50 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 50 USD which references the sales order.
The Accounts Receivable Payment Predictor finds an open item to which it should apply the payment.
The payment is applied to the open item and the item is closed.
A balance of 50 USD, the deposit, is shown under Deposits on the Customer Account Overview in Accounts Receivable.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
50 USD
50 USD
Dr AR 50 USD
Cr Customer Deposits 50 USD
Cash Payment (AR_PAYLOAD)
50 USD
Dr Cash 50 USD
Cash Payment applied to Invoice WS-01
Closed
Applied
0 USD
Cr Accounts Receivable 50 USD
Sales Order Is Fulfilled, Deposit Was Taken When Order Placed- Balance To Be Billed
Continuing with the previous example, where you had a sales order for 125 USD and the customer paid with a deposit of 50 USD, suppose the sales order is shipped and customer is billed for the balance on the sales order.
OM_BILL sends an invoice for 125 USD to Billing.
OM_BILL also sends an invoice line for the deposit applied of -50 USD. The total due on the invoice is 75 USD.
Billing creates pending item in Accounts Receivable for 75 USD.
The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 75 USD.
The open item references both the invoice and the sales order.
The customer balance will have 75 USD open as a result of this transaction.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
75 USD (invoice)
75 USD
Dr Accounts Receivable 75 USD
Cr Revenue 125 USD
Cr Customer Deposits -50 USD
Sales Order Is Fulfilled, Deposit Was Taken When Order Placed - Balance Paid When Goods Are Picked Up
Suppose you have a sales order for 125 USD where the customer paid with a deposit of 50 USD, however in this example the sales order is picked up and paid for by the customer at time of pick up. In this example the invoice is sent to Accounts Receivable first. Also in this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.
The customer returns to pick up the goods.
The 50 USD deposit is applied to the order and the balance of 75 USD is paid for and recorded in the counter sale component.
OM_BILL sends an invoice for 125 USD to Billing.
OM_BILL also sends an invoice line for the deposit applied of -50 USD. The total due on the invoice is 75 USD.
Billing creates a pending item in Accounts Receivable for 75 USD.
The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 75 USD. The open item references both the invoice and the sales order.
The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 75 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 75 USD which references the sales order.
The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment sales order reference to the open item invoice reference.
The Accounts Receivable Update process updates open item activity and updates the customer balance by -75 USD.
The Accounts Receivable Update process closes open items.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
75 USD
75 USD
Dr AR 75 USD
Cr Revenue 125 USD
Cr Customer Deposits –50 USD
Cash Payment (AR_PAYLOAD)
75 USD
Dr Cash 75 USD
Cash Payment applied to Invoice WS-01
Closed
Applied
0 USD
Cr Accounts Receivable 75 USD
Payment Plus Deposit Scenario
A sales order is created for 200 USD. This sales order is partially fulfilled. The customer paid for 100 USD worth of goods taken and left a 50 USD deposit for backordered goods. In this case the invoice was sent to Accounts Receivable first. Also in this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.
The order is entered and the payment of 150 USD is recorded in the Counter Sale component.
The Order Management Billing process (OM_BILL) sends an invoice to Billing for 100 USD for the goods taken.
This same process creates a separate invoice for the deposit taken for 50 USD.
Billing creates two pending items in Accounts Receivable: one for the 100 USD goods invoice and one for 50 USD deposit invoice.
The Accounts Receivable Update process creates open items from invoices, and updates the customer balance by 150 USD. The open items reference both the invoice and the sales order.
The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends payment of 150 USD to Accounts Receivable and references the sales order.
The Accounts Receivable Payment Interface process creates a payment for 150 USD which references the sales order.
The Accounts Receivable Payment Predictor applies the payment to one of the open items by matching the payment sales order reference to the open item sales order reference.
The Accounts Receivable Update process closes one of the open items.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
100 USD
100 USD
Dr AR 100 USD
Cr Revenue 100 USD
Invoice creates Open Item IT-01
50 USD
150 USD
Dr AR 50 USD
Cr Customer Deposit 50 USD
Cash Payment
150 USD
Dr Cash 150 USD
Cash Payment applied to Invoice WS-01
Closed (one of the items gets closed, for example, the 50 USD)
Applied
100 USD
Cr Accounts Receivable 50 USD
Cash Payment applied to Invoice WS-01
Closed (the other item)
Applied
0
Cr Accounts Receivable 100
Partial Payment Plus Deposit Scenario
Similar to the previous scenario, suppose the customer orders 200 USD worth of goods. A portion of the goods can be taken immediately and a portion is backordered. The customer pays a partial payment of 25 USD for 100 USD worth of goods taken. The customer also pays a 50 USD deposit for backordered goods. In this example the invoice is sent to Accounts Receivable first. For this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.
The order is entered and the payment of 75 USD is recorded in the Counter Sale component.
The Order Management Billing process (OM_BILL) sends an invoice to Billing for 100 USD.
This same process also creates a separate invoice for the deposit taken for 50 USD.
Billing creates pending items in Accounts Receivable: for the 100 USD goods invoice and one for 50 USD deposit invoice.
The Accounts Receivable Update process creates open items from the invoices and updates the customer balance by 150 USD.
The open items reference both the invoice and the sales order.
The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 75 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface process creates a payment for 75 USD which references the sales order.
The Accounts Receivable Payment Predictor applies the payment to one of the open items by matching the payment sales order reference to the open item sales order reference.
Because both open items reference the same sales order it is difficult to predict which of the two invoices will be credited.
For this example, the 75 payment was applied to the deposit invoice to close the item
The Accounts Receivable Update process closes one of the open items, in this case the Deposit invoice.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
100 USD
100 USD
Dr Accounts Receivable 100 USD
Cr Revenue 100 USD
Invoice creates Open Item IT-01
50
150 USD
Dr Accounts Receivable 50 USD
Cr Customer Deposit 50 USD
Cash Payment (AR_PAYLOAD)
75 USD
--
Dr Cash 75 USD
Cash Payment applied to Invoice WS-01
Closed the 50 USD payment
Applied
75 USD
Cr Accounts Receivable 75 USD
These sections provide some examples of how refunds are processed when an order is cancelled.
Cancellation of a Sales Order with a Deposit, Full Refund with Company Check Scenario
Suppose you have a sales order for 125 USD where the customer paid with a deposit of 50 USD. The sales order is then cancelled. You allow refunds of deposits and as such a full refund will be given using company check.
Note: The Accounts Receivable business unit must have an associated Accounts Payable business unit and Accounts Payable origin ID. The customer must have a related supplier ID.
The order is cancelled and a refund is recorded in the Customer Deposit component.
The Order Management Billing component (OM_BILL) sends a negative invoice line to Billing for the deposit refund.
Billing creates a pending item for the credit in Accounts Receivable.
An open item is created in Accounts Receivable for -50 USD.
You then manually send a request to an Accounts Receivable clerk to create a refund for the sales order.
Note: There is no automated method for notifying the Accounts Receivable clerk of the check refund.
The Accounts Receivable clerk then manually creates a refund using the Accounts Receivable Maintenance Worksheet.
The on-account item, referencing the sales order, is selected from the worksheet.
The Accounts Receivable Update process updates open item activity and the customer balance by 50 USD.
The Accounts Receivable Refunds Process loads the refunds into the Payables voucher tables.
The Accounts Payable Voucher Posting process builds the voucher payable to the customer.
The Accounts Payable Pay Cycle process creates the payment for 50 USD to customer.
Note: Alternatively, instead of refunding the credit using a company check, the credit can remain on the customer's account and then be applied to a subsequent open item.
Event
Accounts Receivable Open Item
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
-50 USD
-50 USD
Dr AR -50 USD
Cr Customer Deposit -50 USD
Refund on-account MT-09
Closed
0 USD
Dr AR 50 USD
Cr Refund Control 50 USD
AR Refunds Process
NA
NA
Dr Refund Control 50 USD
AP Voucher Posting
NA
NA
Cr AP 50 USD
AP Pay Cycle
NA
NA
Dr AP 50 USD
Cr Cash 50 USD
Cancellation of a Sales Order with Deposit, Full Cash Refund Scenario
Suppose you have a sales order for 125 USD where the customer paid with a deposit of 50 USD. The sales order is then cancelled and a full cash refund given.
The order is cancelled and a refund is recorded in the Customer Deposit component.
The 50 USD payment is handed back to the customer at order cancellation time.
The Order Management Billing process (OM_BILL) creates a negative invoice line in Billing for the deposit refund.
Billing creates a pending item for the credit in Accounts Receivable.
An open item is created in Accounts Receivable for -50 USD.
The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of -50 USD to Accounts Receivable which references the sales order.
The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for -50 USD which references the sales order.
The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment sales order reference to the open item sales order reference.
The Accounts Receivable Update process closes the items and updates the customer balance.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
-50 USD
NA
-50 USD
Dr AR -50 USD
Cr Customer Deposit -50 USD
Cash Refund payment processed by AR_PAYLOAD
NA
-50 USD
NA
Dr Cash –50 USD
Cash Payment applied to Invoice WS-01
Closed
Applied
0 USD
Cr AR –50 USD
Cancellation of Sales Order with Deposit, No Refund Scenario
Suppose you have a sales order for 125 USD where the customer paid with a deposit of 50 USD. The sales order is then cancelled however, in this example you do not allow a refund of the deposit.
The order is cancelled and the nonrefundable deposit is processed in the Customer Deposit component (Zero Refund button).
The Order Management Billing process (OM_BILL) sends a negative invoice line for -50 USD to Billing.
The same process also sends an invoice line for a refund fee of 50 USD to Billing.
Billing creates a pending item in Accounts Receivable for 0 USD.
The Accounts Receivable Update process creates an open item from the invoice which references both the invoice and the sales order.
The Accounts Receivable Update process closes the open item.
Event
Accounts Receivable Open Item
Accounts Receivable Payment
Customer Balance
Accounting Entries
Invoice creates Open Item IT-01
0 USD
0 USD
Dr AR 0 USD
Cr Customer Deposits -50 USD
Cr Deposit Refund Fee 50 USD