Create and Clear Receipts for Bills Receivable Remittances

During the course of the bills receivable remittance process, Receivables both creates and clears receipts for bills receivable.

Create Receipts for Bills Receivable Remittances

Receivables creates an individual receipt for each bill receivable remitted to the bank. The bills receivable remittance receipt method for the remittance batch determines when a receipt is created. You create a receipt to record the accounting event of the expected funds transfer.

The receipt creation process differs for standard and factored remittances:

• Standard remittances: Run the Close Matured Bills Receivable process to create receipts and apply them to bills receivable, either at the maturity date plus the number of collection days or at the remittance date plus the number of collection days, whichever is later. Receivables updates the status of the bill receivable to Closed when the receipt is applied to the bill receivable.

• Factored remittances: Receivables creates a receipt when a remittance is approved. For bills receivable that are factored with recourse, the receipt is applied to short term debt and the status of the bill is updated to Remitted. For bills receivable factored without recourse, the receipt is applied to the bill receivable upon remittance and the status of the bill is updated to Closed.

Clear Receipts for Bills Receivable Remittances

The clearing method of the bills receivable receipt class belonging to the bills receivable remittance receipt method determines when Receivables clears receipts and recognizes cash in the remittance process. You define the clearing method, number of clearing days, and number of risk elimination days when you set up the bills receivable remittance receipt class and method.

Select one of these clearing methods:

• Directly: Receivables clears the receipt upon creation, and recognizes cash on the receipt date.

• Automatic Clearing: Run the Clear Receipts Automatically process to clear receipts on the receipt dates plus the number of clearing days. For standard remittances, the receipt date is either the maturity date plus the number of collection days or the remittance date plus the number of collection days, whichever is later. For factored remittances, the receipt date is simply the remittance date.

• By Matching: Use Cash Management to clear the receipt and reconcile cash to your bank statements.