Considerations for Remitting Receipts

Remit receipts to your bank to initiate the transfer of payments from your customer bank accounts. You remit receipts after your own internal approval, or approval and customer confirmation, if confirmation is required.

Considerations for managing remittances include:

• Standard Remittances

• Factored Remittances

• Settings for Remittance Batches

Standard Remittances

A standard remittance refers to the common practice of remitting receipts. You remit automatic receipts to your bank so that the bank can transfer funds from customer bank accounts to your bank account on the receipt maturity date. You remit manual receipts so that the bank credits your bank account when the customer check clears.

The remittance process initiates the transfer of payment for transactions that are paid by credit card or Electronic Funds Transfer (EFT) for both direct debit and Automated Clearing House (ACH) bank account transfer.

Factored Remittances

A factored remittance is a sale of accounts receivable to your bank in exchange for cash. You remit receipts to your bank so that the bank can lend you money against the receipts either before the maturity date for automatic receipts or before clearing for manual receipts.

To factor receipts, you must identify the remittance method of the remittance batch as Factored. In addition, you can only factor receipts assigned a receipt class with a remittance method of Factoring or Standard and Factoring.

After clearing factored receipts, Receivables creates a short term debt for the borrowed amount to track your liability in case of customer default.

You can track your risk of customer default when you factor a receipt with your bank. In this case, Receivables creates a short term debt for the risk when the receipt is cleared. Run the Clear Receipts Automatically program to eliminate your risk on or after the maturity date of your automatic receipts.

This table shows the accounting entries that Receivables creates when you factor receipts with a receipt class that requires confirmation, remittance, and clearance:

Action	Accounting Entries
Confirm Receipts	DR Confirmation CR Accounts Receivable
Factor Remittances	DR Factoring CR Confirmation
Clear Receipts	DR Cash DR Bank Charges CR Short Term Debt
Eliminate Risk	DR Short Term Debt CR Factoring

Remittance Batch Settings

You can create one remittance batch per remittance bank account or clearing institution.

You can deposit receipts into remittance bank accounts that are either in the currency of the receipt or your ledger currency, provided the bank account allows multiple currencies. If you're remitting receipts in foreign currencies, set the Conversion Rate Type profile option to a value other than User, because you can't specify a user-defined conversion rate when remitting receipts.

To manage automatic remittance batches, set the Receipts per Commit Receivables system option to a large number to avoid intermediate saves in the program. You must use numbers that are large enough to handle your largest automatic remittance batches. To help determine the number to enter, review the log file for your largest automatic remittance creation batch. Reduce this number only if you run out of rollback segments.