1. Implementing Receivables Credit to Cash
  2. How Lockbox File Transmissions Are Validated

How Lockbox File Transmissions Are Validated

The first step in lockbox processing is validating the data imported from your bank file using the lockbox file transmission.

The lockbox process validates the data that you receive from the bank to ensure that:

  • entire file was received.

  • no duplicate receipts within a batch.

  • customers and transactions are valid.

Lockbox also validates that all data is compatible with Receivables by ensuring that the columns in the AR_PAYMENTS_INTERFACE_ALL table reference the appropriate values and columns in Receivables.

Settings That Affect Lockbox Validation

Lockbox checks for duplicate receipts and transactions.

Duplicate receipts have the same receipt number, amount, currency, and customer account number. Lockbox doesn't allow duplicate receipts within the same receipt source for the same customer. This is the same validation Receivables performs when you manually enter receipts.

Transaction numbers are only required to be unique within a receipt source. A customer can have duplicate transaction numbers as long as they belong to different receipt sources. However, lockbox can't automatically apply a payment to these transactions.

If a customer has more than one transaction in the lockbox transmission with the same number, then lockbox can't determine to which transaction to apply the payment. In this case, the receipt is either left as Unapplied (if the customer account number or MICR number is provided) or Unidentified (if the customer account number or MICR number isn't provided).

You can manually apply the receipt according to the transaction recommendations that Receivables presents according to your implementation.

How a Lockbox Transmission Is Validated

When you import a bank file, lockbox completes the following validations:

  • Transmission Level Validations

  • Lockbox Level Validations

  • Batch Level Validations

  • Receipt Level Validations

  • Overflow Level Validations

  • Customer Validations

  • Currency Validation

Transmission Level Validations

Lockbox validates the lockbox transmission to ensure that transmission information corresponds to the transmission format. The following attributes are validated:

  • Transmission format contains receipt records.

  • Either the lockbox number is part of the transmission format, or you specify the lockbox number when you submit the lockbox.

  • Accounting date is in an open accounting period.

  • Total transmission record count and amount that you supply must match the actual receipt count and amount as determined by lockbox. If the transmission format includes the transmission header or trailer, lockbox counts all records in this transmission. The validated count includes all receipts and detail records transferred to the interim table.

  • Origination number is valid, if provided.

Lockbox Level Validations

Lockbox validates the lockbox records to ensure that lockbox information corresponds to the transmission format. The following attributes are validated:

  • If the transmission format includes the transmission header or trailer, ensure that the lockbox number is included and is valid.

  • Lockbox batch count is correct, if provided.

  • Lockbox amount is correct, if provided.

  • Lockbox record count is correct, if provided.

  • Origination number is valid, if provided.

  • No duplicate lockbox numbers.

Batch Level Validations

Lockbox validates the batch records to ensure that batch information corresponds to the transmission format. The following attributes are validated:

  • Batch name exists on batch records.

  • Batch name is unique within the transmission.

  • Batch amount is correct.

  • Batch record count is correct.

  • Lockbox number exists on batch records, if this number is part of the transmission format.

Receipt Level Validations

Lockbox validates the receipt records to ensure that receipt information corresponds to the transmission format. The following attributes are validated:

  • Remittance amount is specified.

  • Check number is specified.

  • Item number is specified and is unique within a batch, a lockbox, or the transmission, depending on the transmission format.

  • Lockbox number is specified (if this number isn't part of the lockbox header or trailer of the transmission format) and batches aren't imported.

  • Batch name is specified, if either batch headers or trailers are part of the transmission format.

  • Account number is specified, if transit routing number is part of the transmission format.

  • Invoice1-8 are either valid or left blank.

  • Installment1-8 are either valid installment numbers or are left blank.

  • Invoice, debit memo, credit memo, on-account credit, or chargeback number derived from the matching number doesn't belong to a receipt.

  • Transaction number is entered where an application amount is specified.

  • Sum of all of the Amount Applied columns for a receipt doesn't exceed the remittance amount.

  • Customer account number is valid.

  • Customer account number and MICR number both reference the same customer, if both are provided.

  • Receipt date is specified.

  • Receipt method is valid.

  • Currency is valid.

Overflow Level Validations

Lockbox validates the overflow records to ensure that overflow information corresponds to the transmission format. The following attributes are validated:

  • Batch name is specified, if either batch headers or trailers are part of the transmission format.

  • Lockbox number is specified, if either the batch header or trailer isn't specified and the transmission format includes the lockbox number.

  • Item number is specified and matches a receipt record.

  • Overflow indicator is specified, unless it's the last overflow record.

  • Overflow sequence is specified.

  • Invoice1-8 are either valid or are left blank.

  • Installment1-8 are either valid installment numbers or are left blank.

  • Transaction number derived is entered where an application amount is specified.

Note: For Receipt and Overflow validations of Invoice1-8: If you're using matching numbers and a receipt record indicates that multiple transactions are to be paid by this receipt, lockbox assumes that all of the transactions are the same document type, such as invoices, sales orders, or purchase orders.For example, if the first 2 transactions are invoices, lockbox successfully matches them with this receipt. However, if the next transaction isn't an invoice, lockbox either imports the remaining receipt amount as Unidentified or rejects the entire receipt, depending on the lockbox definition.If lockbox imports the remaining receipt amount as Unapplied, then Receivables retains the invalid matching numbers.

Customer Validations

Lockbox can either validate customer data based on the following attributes or mark the receipt as Unidentified if no match is found:

  • Customer account number is valid.

  • MICR number is valid.

  • Bill-to customer is from a matched invoice, if matching is enabled.

Currency Validation

Receivables lets you process receipts in multiple currencies. If you pass the currency, conversion type, and receipt date, lockbox attempts to determine the conversion rate. If lockbox is unable to determine the conversion rate, the receipt will fail validation.

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