Examples of Using Each AutoCash Rule
You create an AutoCash rule set from a combination of the six AutoCash rules. You enter the rules in the order in which you want to use them to apply a receipt to an open debit item.
The AutoCash rules are:
-
Match Payment with Invoice
-
Clear the Account
-
Clear Past Due Invoices
-
Clear Past Due Invoices Grouped by Payment Terms
-
Apply to the Oldest Invoice First
-
Combo Rule
When you apply a receipt, Receivables uses the first rule in the AutoCash rule set. If the first rule in the set doesn't find a match, Receivables uses the next rule in the sequence, and so on until it can apply the receipt.
These examples illustrate how each rule applies receipts to transactions and updates customer balances.
Match Payment with Invoice
The Match Payment with Invoice rule applies a receipt to a single invoice, debit memo, or chargeback only if the receipt amount exactly matches the amount of the debit item. If more than one debit item has an open amount that matches the receipt amount, Receivables applies the receipt to the item with the earliest due date. If more than one debit item has the same amount and due date, Receivables applies the receipt to the item with the lowest payment schedule ID number (internal identifier).
Receivables uses the values specified for the AutoCash rule set open balance calculation and the number of discount grace days assigned to the customer profile to determine the remaining amount due on the debit item. The rule ignores the value of the Apply partial receipts option.
For example, consider the following scenario:
|
Item/Option |
Value |
|---|---|
|
Discounts |
Earned Only |
|
Late Charges |
No |
|
Receipt |
$1800 |
|
Receipt Date |
14-JAN-03 |
|
Discount Grace Days |
5 |
The invoice details are:
|
Invoice Number |
Invoice Amount |
Discount |
Payment Terms |
Invoice Date |
Due Date |
|---|---|---|---|---|---|
|
600 |
$2000 |
$20 |
10% 10/Net 30 |
01-JAN-03 |
30-JAN-03 |
The payment terms assigned to this invoice include a 10% discount if the invoice is paid within 10 days, and the open balance calculation on the AutoCash rule set allows for earned discounts. Even though the invoice is paid after the 10 day period, Receivables adds the 5 discount grace days, making this invoice eligible for a 10% discount.
The remaining amount due on the invoice on January 14 is $1800. Since the remaining amount due matches the receipt amount, the receipt is applied. If there had been no discount grace days, Receivables couldn't apply the receipt because the remaining amount of the invoice would be $2000.
Clear the Account
The Clear the Account rule applies a receipt only if the receipt amount exactly matches the customer open balance. Receivables includes all open debit and credit items when calculating the customer open balance. Open credit items include credit memos, on-account credits, and on-account and unapplied cash. The rule ignores the value of the Apply partial receipts option.
The Clear the Account rule uses the following equation to calculate the open balance for each debit item:
Open Balance = Original Balance + Late Charges - DiscountReceivables then adds the balance for each debit item to determine the total account balance. The rule uses this equation for each invoice, chargeback, debit memo, credit memo, and application of an unapplied or on-account receipt to a debit item.
Receivables uses the values specified for the AutoCash rule set open balance calculation and the number of discount grace days assigned to the customer profile to determine the customer open balance.
For example, consider the following scenario:
|
Item/Option |
Value |
|---|---|
|
Late Charges |
Yes |
|
Items in Dispute |
Yes |
|
Receipt |
$590 |
This table shows the customer activity:
|
Past Due Debits/Credits |
Invoice Amount |
Late Charges |
In Dispute |
|---|---|---|---|
|
Invoice 45 |
$500 |
$40 |
Yes |
|
Invoice 46 |
$300 |
$0 |
N/A |
|
Credit Memo 100 |
$50 |
N/A |
N/A |
|
Unapplied Cash |
$200 |
N/A |
N/A |
Since the Late charges and Items in dispute options are enabled, the open balance for this customer is $590. Because the receipt amount matches the customer open balance, the receipt can be applied.
If the receipt amount didn't exactly match the customer account balance, Receivables would use the next rule in the set to attempt to apply the receipt.
Clear Past Due Invoices
The Clear Past Due Invoices rule applies a receipt only if the receipt amount exactly matches the customer past due account balance. Receivables includes all open past due debit and credit items when calculating the past due account balance. The rule ignores the value of the Apply partial receipts option.
The Clear Past Due Invoices rule only applies the receipt to items that are currently past due. A debit item is considered past due if the invoice due date is earlier than or equal to the date of the receipt currently being applied. Receivables uses the receipt date for unapplied and on-account cash, and the credit memo date for credit memos and on-account credits, to determine whether to include these amounts as part of the customer past due account balance.
For example, if you apply a receipt with a receipt date of 10-JAN-03, all unapplied and on-account cash, and all credit memos and on-account credits, that have a transaction date (receipt date or credit memo date) equal to or earlier than 10-JAN-03 are included when calculating the customer past due account balance.
Receivables uses the values specified for the AutoCash rule set open balance calculation and the number of discount grace days assigned to the customer profile to determine the customer past due account balance. The settings of the Late charges and Items in dispute options may prevent a past due debit item from being closed, even if the receipt amount matches the customer past due account balance.
For example, consider the following scenario:
|
Item/Option |
Value |
|---|---|
|
Late Charges |
No |
|
Items in Dispute |
No |
|
Receipt |
$420 |
This table shows the customer activity:
|
Past Due Debits/Credits |
Invoice Amount |
Late Charges |
In Dispute |
|---|---|---|---|
|
Invoice 209 |
$300 |
$0 |
N/A |
|
Invoice 89 |
$250 |
$0 |
Yes |
|
Invoice 7 |
$120 |
$30 |
N/A |
Since the Late charges and Items in dispute options aren't enabled, Receivables doesn't include Invoice 89 ($250) or late charges for Invoice 7 ($30) in the calculation of the customer past due account balance. Therefore, the past due account balance for this customer is $420. Because the receipt amount matches the customer past due account balance, the receipt is applied. However, Invoice 7 and Invoice 89 are still open, past due debit items.
Clear Past Due Invoices Grouped by Payment Terms
The Clear Past Due Invoices Grouped by Payment Terms rule applies a receipt only if the receipt amount exactly matches the sum of the customer credit memos and past due invoices. This rule is similar to the Clear Past Due Invoices rule, but it first groups past due invoices by payment terms and uses the oldest transaction due date within the group as the group due date.
A debit item is considered past due if the invoice due date is earlier than the date of the receipt currently being applied. For credit memos, Receivables uses the credit memo date to determine whether to include these amounts in the customer account balance.
For example, if you apply a receipt with a receipt date of 10-JAN-03, credit memos that have a transaction date equal to or earlier than 10-JAN-03 are included. Credit memos don't have payment terms, and are therefore included in each group.
Receivables uses the values specified for the AutoCash rule set open balance calculation and the number of discount grace days assigned to the customer profile to determine the sum of the customer credit memos and past due invoices. The settings of the Late charges and Items in dispute options may prevent a past due debit item from being closed, even if the receipt amount matches the sum of the customer credit memos and past due invoices.
For example, consider a $900 receipt applied on 25-JUN. This table shows the related customer activity:
|
Transaction Number |
Payment Terms |
Due Date |
Invoice Amount |
|---|---|---|---|
|
1 |
A |
25-MAY |
$500 |
|
2 |
A |
25-JUN |
$200 |
|
3 |
A |
25-JUN |
$200 |
|
4 |
B |
20-JUN |
$900 |
|
5 |
C |
25-MAY |
$905 |
Receivables groups these transactions as follows:
-
Group 1: Transactions 1,2,3 Amount: $900 Group Due Date: 25-MAY
-
Group 2: Transaction 4 Amount: $900 Group Due Date: 20-JUN
-
Group 3: Transaction 5 Amount: $905 Group Due Date: 25-MAY
Since both Groups 1 and 2 match the receipt amount, Receivables selects the group with the oldest due date (Group 1) and applies the receipt to the transactions in this group.
Apply to the Oldest Invoice First
The Apply to the Oldest Invoice First rule applies receipts to customer debit and credit items, starting with the item with the oldest due date. Receivables uses the values specified for the AutoCash rule set open balance calculation to determine the oldest outstanding item for the customer.
For example, consider the following scenario:
|
Item/Option |
Value |
|---|---|
|
Apply Partial Receipts |
Yes |
|
Late Charges |
No |
|
Receipt |
$200 |
This table shows the customer activity:
|
Invoice Number |
Invoice Amount |
Late Charges |
Due Date |
|---|---|---|---|
|
801 |
$0 |
$35 |
01-DEC-02 |
|
707 |
$450 |
$0 |
01-JAN-03 |
If you compare only the due dates for the two invoices, invoice 801 is the oldest invoice. However, Receivables also checks the open balance calculation and automatic matching rule options for the AutoCash rule set. Since the Late charges option isn't enabled, Receivables ignores invoice 801 (because the remaining amount only consists of late charges) and applies the $200 receipt to invoice 707.
If the Apply partial receipts option weren't enabled, Receivables couldn't apply this receipt and would look at the next rule in the sequence.
Combo Rule
The Combo Rule applies a receipt to two invoices, debit memos, or chargebacks only if the receipt amount exactly matches the amount of the two debit items. If more than one combination of two debit items has a total open amount that matches the receipt amount, Receivables applies the receipt to the combination of items with the earliest due date. If more than one combination of two debit items has the same amount and due date, Receivables applies the receipt to the combination of items with the lowest payment schedule ID number (internal identifier).
Receivables uses the values specified for the AutoCash rule set open balance calculation and the number of discount grace days assigned to the customer profile to determine the remaining amount due on the debit items. The rule ignores the value of the Apply partial receipts option.
For example, a lockbox contains these five open invoices:
|
Invoice Number |
Invoice Amount |
|---|---|
|
101 |
$50.00 |
|
201 |
$200.00 |
|
301 |
$175.00 |
|
401 |
$372.00 |
|
501 |
$127.00 |
The lockbox contains a receipt for $572. Using the Combo Rule as the first AutoCash rule, the receipt is applied to invoices 201 and 401.