How AutoInvoice Processes Credited Amounts

Use automated receipt handling to manage imported credit memos using AutoInvoice against paid transactions. You can set up Receivables to either refund the credited amount or place the credited amount on account.

You can only use automated receipt handling for credits with approved credit memos. You must ensure that you set up your feeder systems with business processes that support this assumption.

Settings That Affect Automated Receipt Handling for Credits

These settings affect automated receipt handling for credits:

• Transaction Source: Define an imported transaction source and enable the Receipt Handling for Credits option to indicate your enterprise policy. Assign this transaction source to the applicable imported credit memos.

• Minimum Refund Amount Receivables system option: If you plan to process refunds, specify in the Minimum Refund Amount field in Receivables system options the minimum amount necessary for AutoInvoice to create a refund.

• Receivables Activity: If you plan to process refunds, define a Credit Card Refund receivables activity for credit card refunds and a Refund receivables activity for non-credit card refunds. The receivables activity identifies the general ledger clearing account to use to clear the refund amounts.

• Credit Card Transaction Remittance Method: On the original credit card transactions, use a receipt class with a remittance method of Standard.

• Transaction Type: The transaction type assigned to the debit items must be set to Natural application only. If the transaction type of a debit item is set to Allow overapplication, then you must process the credit manually.

How Automated Receipt Handling Processes Credits

During AutoInvoice import, the process flow for automated receipt handling for credits is as follows:

1. AutoInvoice verifies that the transaction source assigned to the credit memo has automated receipt handling enabled.

2. AutoInvoice evaluates each credit memo and its associated transaction to determine eligibility for automatic receipt handling. To be eligible:

   • The transaction type of the paid transaction must be set to allow natural application only.

   • The transaction can't be in doubt.

3. If eligible, then AutoInvoice unapplies the paid transaction from the receipt to be credited.

4. AutoInvoice creates the credit memo in the amount of the requested credit, and applies the credit to the transaction.

5. If your policy is to automatically refund your customers, then AutoInvoice evaluates the receipt for refund eligibility. To be eligible, the receipt can't be in doubt.

6. If eligible for refund, AutoInvoice creates the refund for all credit request amounts that are greater than or equal to the value entered in the Minimum Refund Amount field in Receivables system options.

   AutoInvoice places on account any credit amount less than the specified minimum.

7. AutoInvoice applies the appropriate receivable activity to the receipt, as determined by the transaction source.

Transactions and Receipts in Doubt

AutoInvoice rejects a credit memo from automated receipt handling if one of the following conditions exists on the transaction to be credited:

• The transaction type of the transaction is set to allow overapplication.

• An on-account credit memo was previously applied against the transaction.

• A regular or chargeback adjustment already exists against the transaction.

• The credit memo is imported against a transaction with a negative creation sign.

If the credit memo is ineligible due to one of these conditions, AutoInvoice processes the credit memo using standard validation. This way you can evaluate the appropriateness of the credit request before taking action.

For refund requests, AutoInvoice automatically places on account the amount of a refund request if one of the following conditions exits:

• The receipt to be refunded hasn't been remitted.

• Receipts with different payment types (ACH, cash, credit card) were used to pay the same transaction to be credited.

• Installments exist on the transaction and aren't fully paid.

• The receipt has an on-account credit memo against it.