1. Using Receivables Credit to Cash
  2. Guidelines for Applying Receipts and On-Account Credit Memos

Guidelines for Applying Receipts and On-Account Credit Memos

You can apply all or part of a receipt or on-account credit memo to a single debit item or to several debit items.

For example, a customer may send a single check to pay all of one invoice and part of another invoice. The customer may also have an on-account credit memo to use with the check to close an open debit item.

Review these guidelines for applying receipts and on-account credit memos to transactions:

  • Transaction Balance for Applications Always Used Profile Option

  • Receipt Application on Cross-Customer Transactions

  • Foreign Currency Receipts

  • Unidentified Receipts

  • Credit Memo Search

  • On-Account Credit Memos

  • Cash Budget Funding with Receipts

Transaction Balance for Applications Always Used Profile Option

The Transaction Balance for Applications Always Used profile option determines the default amount applied value to use for receipt applications. If you set this profile option to Yes, then the default amount applied is the remaining transaction amount.

If you set this profile option to No, or if a null value exists, then the defaulting rule is:

  • If the unapplied receipt amount is greater than or equal to the transaction, then the default amount applied is the remaining transaction amount.

  • If the unapplied receipt amount is less than the remaining transaction amount, then the default amount applied is the unapplied receipt amount.

Receipt Application on Cross-Customer Transactions

You can apply a receipt to the open debit items of unrelated customers if the Allow Payment of Unrelated Transactions system option is set to Yes.

If a customer paying relationship assignment exists, then customers can pay for transactions of related customers in the same hierarchy according to the paying relationship. The paying relationships are:

  • Pay Any: Any customer within the relationship can pay for the accounts of any other customer within the relationship.

  • Pay Below: Each customer can pay for its own transactions, and the transactions of all customers that are lower in the hierarchy (children, grandchildren, and so on).

Foreign Currency Receipts

If you apply receipts in the same foreign currency as the transactions, enter foreign currency conversion rate information using predefined conversion rates, or enter your own rate. If, when you post a foreign currency receipt application to general ledger, the rate changes, Receivables records a realized gain or loss amount.

Unidentified Receipts

An unidentified receipt is a receipt without customer information. The Add Application and Unapply Application buttons in the Application section of the Edit Receipt page are disabled for unidentified receipts until customer information is provided. In some cases, you can derive customer information for an unidentified receipt by entering and applying a specific transaction number using the Add Open Receivables window in the Edit Receipt page.

Credit Memo Search

You can only search for and display complete credit memos.

On-Account Credit Memos

You can apply on-account credit memos to transactions and refunds only. Receivables doesn't calculate discounts for on-account credit memo applications.

You can't use cross-currency applications with on-account credit memos. The currency of the on-account credit memo and the currency of the transaction must be the same.

Cash Budget Funding with Receipts

If you use cash budget funding with receipts on a ledger enabled for budgetary control, the applied amount from standard receipt applications and miscellaneous receipt creation increases the cash control budget.

If you later unapply, modify or reverse an applied amount, these actions will also update the cash control budget accordingly.

You can use any of these methods to create and apply receipts for cash budget funding:

  • Create and Edit Receipt pages
  • Process Receipts Through Lockbox process
  • Create Standard Receipt REST API
  • createStandardReceipt Web Service
  • Automatic Receipt process
  • Apply Receipts Using AutoMatch process

These standard receipt applications don't fund the cash control budget:

  • Transactions from business units that implement Revenue Management
  • Invoices with revenue scheduling rules or revenue contingencies
  • Bills receivable transactions
  • Debit memos used for debit memo reversals

After receipt processing, you can open the applicable receipt in the Edit Receipt page to view the cash budget funding details for the receipt in the Funds Status field and Budget Date field. For manual receipt entry and updates, the values in these fields only reflect the values in the cash control budget after saving and exiting the page, and then reopening:

  • Funds Status field: Indicates the budgetary control validation status. Statuses include Passed, Failed, Partial, Error. You can also search for receipts with a specific funds status in the Manage Receipts page.

    Receipts with the Passed status have successfully funded or updated the cash control budget. Receipts with the Failed, Partial, or Error status need to be corrected either in Receivables or Budgetary Control and then reprocessed. After successful correction and reprocessing, the funds status of the receipt is updated to Passed.

  • Budget Date field: Application date of a standard receipt or the creation date of a miscellaneous receipt.

    These dates persist if the standard receipt application is updated, unapplied, and reversed, or the miscellaneous receipt is reversed or deleted. Any of these activities against a receipt update the cash control budget accordingly.

You set up a ledger for budgetary control and cash budget funding with receipts using the Edit Budgetary Control and Encumbrance Accounting page. This setup is restricted to ledgers associated with a business unit enabled for Multifund Accounting.

You must assign the same GL cash account in both the Budgetary Control ledger setup and the Receivables remittance bank account setup:

  • In Budgetary Control, enter the GL cash account in the Accounts in Journals Subject to Cash Controls section of the Edit Budgetary Control page for the applicable ledger.
  • In Receivables, enter the same GL cash account in the Cash field in the GL Accounts section of the Edit Remittance Bank Account page belonging to the receipt method that you will use for cash budget funding.

To prevent overstating the cash control budget, you must only enter the GL cash account in the Cash field of the applicable remittance bank account. Enter different natural accounts in each of these other fields in the GL Accounts section:

  • Receipt Confirmation
  • Remittance
  • Unapplied Receipts
  • Unidentified Receipts
  • On-Account Receipts

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