Guidelines for Automatic Receipt Processing

You use the automatic receipt process for customers that have agreed to payment collection on a regular basis.

When you create an automatic receipt batch, the process applies receipts to customer transactions and transfers funds from the customer bank account or credit card to your bank account on the receipt maturity date.

This topic provides additional information about the following aspects of the automatic receipt process:

• Discounts and Automatic Receipts

• Start and End Date Ranges

• Remittance Bank Information

• Document Sequences

• Bill-to Sites and Automatic Receipts

• Payment of Related Transactions

• Automatic Receipts System Options

Discounts and Automatic Receipts

You wouldn't normally use discounts with automatic receipts, because the concept of early payment doesn't apply. You and the customer decide the receipt maturity date in advance, and the automatic receipt process transfers funds from the customer bank account or credit card on that date only.

You can calculate earned discounts on payments for automatic receipts that don't require confirmation, if you set up payment terms with the transaction due date equal to the discount date. For example, if the payment terms specify that a transaction is due 30 days after the transaction date, create a percentage discount for 30 days after the transaction date. This identifies the 30-day period as a discount period.

You can't use discounts with automatic receipts that require confirmation by the customer. Alternatively, you can define an Earned Discount receivables activity and create an adjustment to reduce the balance on transactions by the discount amount. You then charge the adjusted amount to this receivables activity discount account.

Start and End Date Ranges

Many of the setup objects used in automatic receipt processing have start and end date ranges, such as receipt methods, remittance bank accounts, and customer bank accounts. Date ranges determine which objects display in lists of values.

You must ensure that the setup objects used in automatic receipts don't contain inconsistent or overlapping date ranges.

For example, if you assign a receipt method with a date range of 01-SEP-18 to 30-SEP-18 to one of your customers, you can't choose this receipt method if you enter an invoice for this customer on 01-OCT-18.

Remittance Bank Information

The automatic receipt process assigns one of your remittance bank accounts to each receipt created by the payment of a customer open debit item.

Remittance bank account information includes the general ledger accounts used during receipt application.

The automatic receipt process usually assigns to the receipt the primary remittance bank account associated with the receipt method and currency of the transaction. The one exception to this is if a non-primary remittance bank account belonging to the same receipt method uses the same currency as the customer bank account. In this case, the automatic receipt process uses this remittance bank account instead.

This matching of your remittance bank account to a customer bank account in the same currency helps you both to avoid bank charges and to expedite funds transfer.

You can update remittance bank information for an automatic receipt under these conditions:

• Receipt status is Confirmed.

• Unapplied and On-Account general ledger accounts of the remittance bank are the same account.

Document Sequences

If you plan to assign a unique document number to each automatic receipt, you must enable document sequencing at the appropriate ledger or legal entity level.

To enable document sequencing:

• At the ledger level: Set the Sequential Numbering profile option to Always Used or Partially Used.

• At the legal entity level: In the Sequencing section of the primary ledger options setup, set the Sequencing By option to Legal Entity, and set the enforce options according to your requirements.

To set up document sequencing for automatic receipts:

• Ensure that a document category is created for each receipt method assigned to transactions selected for automatic receipt application.

• Assign each applicable document category a document sequence with automatic numbering.

Bill-to Sites and Automatic Receipts

Use the Require billing location for receipts Receivables system option to determine whether Receivables creates an automatic receipt for a customer without a primary bill-to site:

This table indicates the effect of setting or not setting the Require billing location for receipts Receivables system option for automatic receipts:

Option	Primary Bill-to Site?	Create Automatic Receipt?
No	No	Yes, without a bill-to site
Yes	No	No

• If the system option is set to No and the customer doesn't have a primary bill-to site defined, Receivables creates the automatic receipt without assigning a bill-to site.

• If the system option is set to Yes and the customer doesn't have a primary bill-to site defined, Receivables doesn't create the automatic receipt.

Payment of Related Transactions

If you use customer selection criteria for an automatic receipt batch, the process searches for transactions with a matching paying customer, rather than the bill-to customer. The paying customer is the customer associated with the customer bank account assigned to the transaction. This customer may differ from the bill-to customer if, for example, you want a primary customer to pay for related transactions.

If you want one customer to pay for transactions billed to another customer, you must do one of the following tasks:

• Enable the Allow payment of unrelated transactions Receivables system option.

• Define a paying relationship between the two customers.

Then, when entering or updating transactions for automatic receipt processing, you must enter the bill-to customer name and site, and the paying customer bank information.

Automatic Receipts System Options

You use the Automatic Receipts section of the Cash Processing tab of Receivables system options to set up automatic receipts for your business unit.

Use the Receipt Confirmation Threshold Amount field to set a value agreed upon with your customers to automatically confirm automatic receipts. An automatic receipt batch with a total amount below the value you enter doesn't require confirmation.

Use the Invoices per Commit and Receipts per Commit fields to enter values large enough to avoid intermediate saves in the program. Enter values that can handle your largest automatic receipt and remittance batches.

To help determine the values to use, refer to the end of the log file of your largest automatic receipt batch and remittance batch to see the number of receipts marked for the batch. You can later reduce these numbers if you run out of rollback segments.