Standard Order Payment Processing

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.

  1. The order is entered and the payment is recorded in the Counter Sale component.

  2. The Order Management Billing process (OM_BILL) sends an invoice to Billing.

  3. Billing creates a pending item in Accounts Receivable.

  4. 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.

  5. 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.

  6. The Accounts Receivable Payment Interface process creates a payment for 100 USD referencing the same sales order.

  7. 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.

  8. 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.

  1. The order is entered and the payment is recorded in the Counter Sale component.

  2. 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.

  3. The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 100 USD referencing this sales order.

  4. 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.

  5. The Accounts Receivable Update process creates an on-account open item for -100 USD and updates the customer balance by -100 USD.

  6. OM_BILL sends an invoice to Billing.

  7. Billing creates a pending item in Accounts Receivable.

  8. 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.

  9. 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.

  10. 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.

  1. The order is entered and the payment is recorded in the Counter Sale component.

  2. 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.

  3. The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 100 USD which also references the sales order.

  4. 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.

  5. The customer balance does not change as a result of this payment.

  6. OM_BILL sends an invoice to Billing.

  7. Billing creates a pending item in Accounts Receivable.

  8. 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.

  9. You must now manually apply the customer's payment to the invoice open item using the Payment Worksheet.

  10. 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.

  1. The order is entered and the corporate voucher payment is recorded in the Counter Sale component.

  2. The Order Management Billing process (OM_BILL) sends an invoice to Billing for 100 USD.

  3. This same process also sends an invoice line to Billing for -10 USD for the voucher. The invoice total is 90 USD.

  4. Billing creates a pending item in Accounts Receivable.

  5. 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.

  6. 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.

  7. The Accounts Receivable Payment Interface (AR_PAYLOAD) process creates a payment for 90 USD, which references the sales order.

  8. The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment invoice reference to the open item invoice reference.

  9. 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.

  1. The order is entered and the partial payment or 25 USD is recorded in the Counter Sale component.

  2. The Order Management Billing process, (OM_BILL) sends an invoice to Billing for 100 USD.

  3. Billing creates a pending item in Accounts Receivable.

  4. 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.

  5. 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.

  6. The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 25 USD which references the sales order.

  7. The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment invoice reference to the open item invoice reference.

  8. 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