Skip to end of metadata
Go to start of metadata

INTRODUCTION TO PAYMENTS, RECEIPTS, AND OPEN ITEMS

Compiere automates the management of Open Items using a Payment Rules processor.

An Invoice can trigger the following transactions:

  • Entry made in the Cashbook
  • Payment from Credit Card or EFT Transaction
  • Open Item for On Account transactions

PAYMENTS, RECEIPTS, AND OPEN ITEMS

Before you can process payments or receipts you must set up the following elements:

  • Bank
  • Cashbook
  • AP Transactions
    • Cashbook Journals
    • Payments
    • Payment Allocation
    • Bank Statements

Bank

A Bank can have multiple accounts. In the Bank, you define:

  • Your document or check (Print Format and Sequence Number)
  • Your Payment Processor (Credit Card or ATM Processor)
  • Your Accounting information
Note: The Account determines the Currency.

The Bank window allows you to define the banks and accounts associated with an organization or business partner.

Open the Bank window by clicking on Bank from the Main Menu.


 
Here you define a bank that is used by an organization or business partner.

Select an Organization that owns this Bank.

Each Bank is given an identifying Name, Address, and Routing No, and Swift Code.

The Routing No of the Bank (ABA Number) identifies a legal Bank. It is used in routing checks and electronic transactions.

The Swift Code (Society of Worldwide Interbank Financial Telecommunications) is an identifier of the Bank.

Account

Move to the Account tab.

The Account tab is used to define one or more accounts for a Bank. Enter the Account No and the Currency.

The Bank Account Type field indicates the type (savings, checking etc.) this account is defined as.

The Credit Limit field displays the credit limit for this account.

The Current Balance field displays the current balance in this account.

Bank Account Document

Move to the Bank Account Document tab.

Use this tab to define the documents used for this bank account. You define your checks, transfers and other payment document (sequence) numbers as well as the format.

The Bank Account is a display only field. It specifies the account for this document.

Enter the Name of the Bank Document you want to generate or track, and a Description if you like.

Enter the Payment Rule to indicate which payments will be made when using this Bank Account.

The Current Next field specifies the next number to be used for this document.

If your Payment Rule is Check you need to define a Check Print Format to print the document.

Note: Compiere prints the amount, payee, and date and remittance advice on pre-printed stock checks.

Payment Processor

Move to the Payment Processor tab.

Use this tab to define the parameters for the processing of electronic payments.

Enter the Name of the Payment Processor you want to use, and a Description if you like.

Enter the Host Address to identify the URL and the Host Port to identify the port ID for your payment processor.

The Partner ID indicates the ID you use to acess the service (e.g. PayPal) and the Vendor ID for the payment processor. Enter a User ID and Password to identify your user account to allow access to the payment processor.

The Proxy Address must be defined if you must pass through a firewall to access your payment processor. The Proxy port is the Port of your proxy server. The Proxy logon is the Logon of your proxy server. The Proxy password is the Password of your proxy server.

Select the corresponding check boxes to indicate which Credit Cards and Payment methods you want to accept (MasterCard, VISA, American Express, Diners, etc.) ACH stands for Automatic Clearing House.

Enter a Minimum Amt if you want the payment methods selected to display for selection only if the invoice is above the specified amount.

Selecting a value in the Only Currency field indicates that this bank account accepts only the currency entered.

Select the Require Credit Card Verification Code check box to indicate that this bank account requires a verification number for credit card transactions. This is typically a three or four digit number printed on the front or back of the Credit Card.

The Document Sequence defines the numbering sequence to be used for your documents.

The Payment Processor Class identifies the Java class used to process payments.

The Commission indicates the commission to be paid as a percentage. No calculations are done with this field. It is used for reference only.

The Cost per Transaction field indicates the fixed cost to be charged per transaction. No calculations are done with this field. It is used for reference only.

Note: When a credit card information, Compiere first checks to ensure that the credit card number entered conforms to the vendor specific algorithm.  This would prevent transaction charges from your payment processor from being incurred when users do not enter the credit card information correctly.

Accounting

Use the Accounting tab to define your Accounting information.

The Bank Asset account is the account used when booking updates to the balance in this bank account during Bank Statement posting.

The Bank in Transit account is the account used for funds which are in transit (e.g. a payment received but unrecognized.)

The Unallocated Cash account is used for payments that are not allocated to an Invoice.

The Bank Unidentified Receipts account is not used at this time.

The Payment Selection account is used as the clearing account for AP Payments.

The Bank Expense account is used if a charge is not specified.

The Bank Interest Expense account is the account used when recording interest expense charges from your bank.

The Bank Interest Revenue account is the account used when recording interest earned on your bank account.

The Bank Revaluation Gain and Loss accounts along with the Bank Settlement Gain and Loss accounts are not used at this time.

For more information on Accounting, refer to the Performance Analysis Chapter.

Cash Book

The Cash Book is used for petty cash (expenses for stamps, flowers, forwarding agents, etc. or small receipts). You need to have at least one Cash Book per Organization. If you have more than one, you need to make a selection when paying cash in an Order or an Invoice.

Open the Cashbook window from the Main Menu.


 
Enter the Name of the Cash Book you want to use, and a Description if you like. You also need to enter the Currency for the Cash Book.

Accounting

Use the Accounting tab to define your Accounting information.

The Cash Book Asset account is the account used to record payments into and disbursements from this Cash Book.

The Cash Book Difference account is the account used to record any differences that affect this Cash Book.

The Cash Transfer account is the account used as a clearing account for recording Invoices paid in cash.

The Cash Book Expense account is the account used to record general, non-itemized cash expenses.

The Cash Book Receipt account is the account used to record general non-itemized cash receipts.

For more information on Accounting, refer to the Performance Analysis Chapter.

The Cash Journal

The Cash Journal in Compiere is used to record your cash transactions, i.e. disbursements from and receipts to Petty Cash. The Cash Journal will automatically be created by an Order or Invoice which is paid in cash. If you change the Order or Invoice and you have selected Cash as your Payment Method, the Cash Journal Lines are automatically reversed.

Use the Cash Journal to manually add Invoices, Charges (positive or negative) or Bank Transfers. Receipts are displayed with a (plus) , Payments with a (minus) . The Ending Balance is made up by the Transaction Amount plus/minus Charges plus/minus Interest.

Click on Cash Journal from the Main Menu to open the Cash Journal window.


 
The Standard Cashbook, which you set up before, is displayed.

Click on the New Record button. The Name for the Cash Journal Entry defaults to the current date. Adapt it and enter a Description if you like.

Statement Date and Account Date also default to the current date. The Statement Date is the date of the statement being processed. The Account Date is the date to be used on the General Ledger account entries generated from this document.

The Beginning Balance is the balance prior to making any adjustments for payments or disbursements.

The Statement Difference reflects the difference between the Statement Ending Balance and the Actual Ending Balance. The Ending Balance is the result of adjusting the Beginning Balance by any payments or disbursements.

Switch to the Cash Line tab to manually enter your Journal lines.

Select a Cash Type from the drop down list, which could be Invoice, Difference, Charge, Expense, General Receipt or Transfer to Bank Account, and enter the Amount.

Depending upon the Cash Type entered additional fields will be displayed. For example, if the Cash Type is Invoice you will select and Invoice and any Discount or Write Off Amount. If the Cash Type is Charge you will select a Charge. If the Cash Type is Bank Transfer you will enter Bank Account.  If the Cash Type is Expense you will enter Expense/Receipt Type.

Note: You can add new Expense/Receipt Types in the Expense/Receipt Type window.

Return to the Cash Journal tab to process transactions. Click on the Process Cash button. If the Process completes successfully, the balances are updated and the Not Posted button appears.

Note: Orders paid in Cash will appear on the Open Items Report until the Cash Journal is processed.

Click on the Not Posted button to confirm the posting and creation of the Accounting Entries.

Note that your application server must be running for your accounting entries to be created and posted.

The Cash Journal - Accounting Consequences

The following outlines the accounting transactions generated for the different Cash Journal Lines. The accounts used are defined in the Accounting tab for the Cash Book referenced in the Cash Journal.

Expense

     DR: Cash Expense

            CR: Cash Asset

Receipt

     DR: Cash Asset

            CR: Cash Receipt

Charge

     DR: Cash Expense

          CR: Cash Asset

Difference

     DR: Cash Difference

          CR: Cash Asset

Invoice - Receivable

     DR: Cash Asset

            CR: Cash Transfer

Invoice - Payable

     DR: Cash Transfer

           CR: Cash Asset

Transfer - to Bank

     DR: Bank in Transit

          CR: Cash Asset

Transfer - from Bank

     DR: Cash Asset

           CR: Bank in Transit

Payment of Invoices

For a Sales Order or an Invoice, Payments may be carried out automatically. You can switch the payment method any time, even after Processing, and all entries will be adapted automatically.

Compiere supports online approval for Credit Cards, ACH and the Credit Card number before you transmit the transaction.

Mixed payment methods are only possible in the manual payment process. You can only split a Payment manually and pay part of the Payment in cash and part of it with your credit card.

Manual payments are Payments you do independent from an Order or Invoice. Use the Payment window to record checks or credit card payments with online checking. The window handles Discounts and Write-offs as well as Bank Charges in the Bank Statements and Partial Payments.

The Manual Payment window also completely supports Multi-Currency transactions, i.e. Invoice and Payment can show different currencies. (You must have set up your Multi-Currency conversion rates correctly). Before you process your Payments, all amounts must be allocated and difference needs to be zero.

Click on Payment from the Main Menu to open the Payment window.


 
Select the Bank Account and the Document Type, in this case AR Receipt.

The Transaction Date specifies the date of the transaction. The Account Date specifies the date for the generated accounting transactions.

You need to enter a Business Partner, in this case that would be a Customer. If the Customer is paying for a specific Invoice, click on the arrow on the Invoice field. Enter any additional search criteria and select the Refresh button. All Invoices are displayed automatically.

If the payment is for multiple invoices, do not select an invoice and just enter the payment amount. Later in this chapter we will discuss allocating this type of payment.

Depending on your selection in the Paid check box the unpaid or paid Invoices will appear. Unselect it to display all your open Invoices for this Customer. Select the Invoice that is being paid and click OK.

All Amount and Currency fields will be populated according to the Invoice.

If the payment term for the Invoice allows for a discount and the payment date is within the discount terms the Discount will be automatically calculated.

Use the Over/Underpayment check box to indicate if this Payment is an Overpayment or an Underpayment. Then you need to enter the Over/Under Payment Amount field. Overpayments are negative, unallocated amounts and allow you to receive money for more than the particular invoice. An Underpayment (positive) is a partial payment for the invoice. Use this option if you do not want to write off the unpaid amount.

Enter the Write-off Amount to indicate the amount you amount to be written off as uncollectible.

The Tender Type specifies the method of payment (ACH, Credit Card, or Check). If you select Check, the following fields are displayed.

The Bank Routing Number (ABA Number) identifies a legal Bank. It is used in routing checks and electronic transactions. The Account Number specifies the Number assigned to this account. The Check Number specifies the number on the check. The MICR number is the combination of the bank routing number, account number, and check number.

If you select Credit Card, the corresponding Credit Card fields will display.

The Credit Card drop down list is used for selecting the type of Credit Card. The Credit Card Number is the number on the credit card, without blanks or spaces. The Credit Card Verification specifies the verification code on the credit card (AMEX 4-digit number on front; MC, Visa 3-digit number on back) The Expiry Month is the month this credit card expires. The Expiry Year is the year this credit card expires. The Account Name is the Name of the Credit Card or Account holder.

If you select ACH, the corresponding ACH fields will display.

The Bank Routing Number (ABA Number) identifies a legal Bank. It is used in routing checks and electronic transactions. The Account Number is the Number assigned to this account.

Select the Online Access check box to indicate if the application can be accessed via the web. You would use it if you selected Credit Card or ACH as your Payment method. Your screen would change accordingly.

The Voice Authorization Code specifies the code received from the Credit Card Company. The Original Transaction ID is used for reversing transactions and specifies the transaction that has been reversed.

Click on the Online Process button to start the online processing.

The Result field shows the result of the transmission to the Credit Card Company. The Message field displays the message returned from the Credit Card Company as the result of a transmission. The Reference field displays the reference returned from the Credit Card Company for a payment. The Authorization Code is the code returned from the electronic transmission. The Zip Verified field indicates if the zip code has been verified by the Credit Card Company. The Address Verified indicates if the address has been verified by the Credit Card Company.

Note: Online Processing is only available if you have defined a Payment Processor for the Bank Account.

The Document Status indicates the status of the Payment at this time. If you want to change the status, use the Document Action button. This will call the Document Action window. You have the option to Complete or to Void the Payment. If you complete the Payment, the Not Posted button appears. Click on it to confirm the posting and creation of the Accounting Entries.

Prepayment of Sales Orders

In the Sales Chapter, we discussed different types of Sales Orders. One of these was a Prepay Order. This required that the payment for the Order be made prior to any Shipment or Invoice creation. In that Chapter we discussed the steps for creating the payment directly from the Sales Order window. You can also make the payment using the Payment window.

Click on Payment from the Main Menu to open the Payment window.

This is the same window as discussed above. The difference for Prepayments is that you will select a Sales Order as opposed to an Invoice (as the Invoice has not yet been created. Click the arrow on the Sales Order field to display the Sales Info window and click on refresh to display a list of Sales Orders for this Business Partner.

The Sales Orders displayed are those with a Document Type of Prepay Order and with a Status of Awaiting Payment or Orders that have not been paid.

Select a Sales Order and select the OK check box.

The Sales Order field is populated.

Enter the remaining fields as discussed above and select the 'Complete' button.

Once the process ends, the Sales Order is marked "Completed" and the Shipment and Invoice is generated for this Sales Order. The Payment is updated to include the Invoice number. Lastly, the process has created the allocation of this Payment to the Invoice as indicated in the message text.

You can view the Payment Allocation by selecting the Allocation tab.

Payments - Requests

You can enter a Request directly from a Payment or you can access existing requests for this Payment.

If there were existing Requests defined you could view them as well.

For additional information on Requests, refer to the Requests Chapter.

Payment - Accounting Consequences

The following outlines the accounting transactions generated for Payments.

AR Payment

    DR: Bank Asset

           CR: Unallocated Cash

AP Payment

    DR: Payment Selection 

           CR: Bank Asset

AR Prepayment

    DR: Bank Asset

           CR: Customer Prepayment

Payment Allocation

If there is a one-to-one Relationship between Invoice and Payment, the Payment Allocation can be done automatically by selecting the invoice when entering the payment. If there is more than one invoice to be allocated you may create the appropriate allocations in the Payment Window, Allocate tab. This tab is only displayed if you have the Advanced Tabs options selected in Preferences. If you have access to the Advanced Tab, you can select the Allocate tab to enter the Invoices to be allocated to a Payment.

For example, a check from Joe Block was received. This check is to be allocated to two invoices. Because the Preferences are set to show the Advanced Tabs, you can allocate the Payment to both invoices from this window by selecting the Allocate tab.

Select an Invoice and the Amount and Discount are displayed, just as they would be if you were allocating the Payment to a single Invoice on the Payment Tab.

You can modify any of the amounts to adjust for discounts taken. Care should be taken, however as the system will not prevent you from allocating more than the Payment Amount.

When the record is saved, the Remaining Amt field is updated.For example, if the original Payment Amount was 173.00 and  98.00 was allocated to one or more invoices, a balance of 75.00.

Select the New Record button on the tool bar to allocate the Payment to a second Invoice.

Select a new Invoice and adjust the Amount as appropriate.  Continue with this process until you have allocated the desired invoices.0

Return to the Payment tab to "Complete" the Payment.

When the process has completed, the Document has a Status of Completed and the Allocation records are created.

An allocation record will be created for each invoice.

When allocating a Payment to Invoices using the advanced Allocate tab, care should be taken as you can allocate more than the payment amount. This will result in a negative open amount for the Payment. This can be offset by allocating it to another Payment or Credit Memo, using Manual Allocations (as detailed below).

If you do not "Allocate" the full Payment amount, the remaining balance will be a positive open amount and can be allocated to another invoice using Manual Allocations.

Once a Payment has been marked "Completed," no additional "Allocate" records may be added.

The other option if you have multiple Invoices to be allocated to a payment or if you do not know the invoice number to be paid, or you want to offset Credit Memos, AR and/or AP Invoices, the Payments must be allocated manually. Manual Allocation must be done if you have not selected an Invoice or Sales Order when entering the Payment.

Click on Payment Allocation from the Main Menu to open the Payment Allocation window.


 
Enter the Business Partner whose Payments are to be allocated. Select the Business Partner by clicking on the icon in the field. Or enter the entire search key (or the first characters that make it unique) of it and hit Enter, so the field will be filled automatically.

The Currency field is defaulted from the Business Partner information. The Date defaults to the current date. Select the Multi-Currency check box to indicate that you want to list documents in more than one currency.

In the Payment area you see all completed Payments for that Business Partner that have not been fully allocated. Select the Payment(s) you want to allocate.

In the Invoice area you see all open Invoices for that Business Partner. Select the Invoice(s) you want to pay with the selected Payment(s).

Once you select the invoice or invoices you need to make sure that it balances (i.e. there is no difference) and click on the Process button.

If you want to make a partial payment, unselect the Automatic Write-off check box. Having it selected will ensure that the invoice is fully paid and will take the difference between the Applied Amount and the Open Amount and apply it to the "Write Off" Amount. Deselecting the check box allows you to enter just the partial amount in the 'Applied' field and carry a remaining balance for the invoice or payment.

To see what payments were allocated to a specific Business Partner, click on Payment Allocation from the Main Menu to open the Payment Allocation Report window.

Enter the Business Partner and no Invoice if you want to display all allocations carried out for that Business Partner.

The Report will display and show you which Invoices and Payments were allocated for that Business Partner.

PAYABLES PAYMENTS

Payments to your Vendors can be generated ad-hoc where you enter a payment and then generate the check or you can select a number of invoices to pay and generate a single check per vendor.

Ad-Hoc Checks

Payments to your Vendors can be entered in the Payment Window by selecting a Document Type of AP Payment. This method is most often used for recording payments, which require a check to be generated immediately by Compiere or if a check will be hand written. To quickly print checks you can create a Payment of the document type AP Payment.

The steps involved are as follows:

  • Select the Invoices to be paid
  • Create the Payments
  • Print your Checks

You create the Payment in the same way as discussed for AR Payments. Click on Payment from the Main Menu to open the Payment window.

Select a Document Type of AP Payment.

Select a Business Partner and Invoice. The Invoice selection will default to non-sales orders. The system will verify that if an AP Payment document type is entered, a Vendor Invoice has been selected.

If desired you can also select a Charge.

Enter the other fields as appropriate as discussed in the previous section.

When all data has been entered Save and Complete the Payment.

If you want to print a check for this Payment, select the Print button on the tool bar.

If the desired format for the Check is not used, simply select the format you want from the drop-down list box.

This method of Payment and Check generation can also be used to pay for monthly charges like Rent or Utilities. In that instance you would select a Business Partner and a Charge account along with the appropriate amount. This allows you to enter a Payment and generate a check for those instances when there is not a Vendor Invoice.

Payment Selection

Most often you will pay you AP invoices using Payment Selection. You create a Payment Selection and select the invoices manually or generate the payment for a group of invoices based on criteria. You can change the amount to be paid or remove invoices you do not want to pay.

The Payment Selection window allows you to select and process the invoices you want to pay. Click on Payment Selection from the Main Menu to open the Payment Selection window.


 
The Payment Selection tab defines the Bank Account and the Payment Date of the payments to be made. You also create the payments here by using the Create Payments button.

You can select a specific Business Partner Group or Business Partner.

Select the Only Discount or Only Due check boxes if you want to create payments for only invoices that are eligible for a discount or are due.

Select the 'Include Disputed' check box if you want to create payments for invoices which have the "Disputed" flag selected.

Select a Match Requirement of None, Purchase Order, Receipt, or Purchase Order and Receipt. Depending upon the option chosen, only those Invoices which the appropriate matching records will be included in the selection.

For additional information on Matching, refer to the Purchasing Chapter.

Select a Payment Rule to select Invoices only with a specific Payment Rule or leave it blank to select all Payment Rules.

Payment Selection Line

The Payment Selection Line tab defines the individual invoices an organization is paying to a Vendor with this payment.

The Payment Amount may be modified or Payment Lines may be deleted if you do not want to pay a specific Invoice.

Generated Payment

The Generated Payment tab allows you to view a Generated Payment after creating it.

If multiple Invoices are to be paid to a single Business Partner, a single Payment will be generated.

Payment Print/Export

After having created the payments, use the Payment Print/Export window to print your checks or export your actual payments.

Click on Payment Print/Export from the Main Menu to open the Payment Print/Export window.

Select the Payment Selection and the Payment Rule.

You have several output options:

  • Print (for Checks)
  • Export (to a comma delimited file)
  • EFT (to a comma delimited file)
Note: In a European setting you would typically use the Export function, whereas in an US context you would use the Check Print.

When the output is Check, the print format used for the Check and Remittance Advice must be defined for the selected Bank Account.

View Allocation

The View Allocations window is used to see the Allocations that were generated when a Payment was linked to an Invoice or Invoices via Payment, Payment Selection or Payment Allocation. Click on View Allocation from the Main Menu to open the View Allocation window.

This is a read only record which indicates the Payment Allocation that has been processed. The Transaction Date, Account Date, and Currency are updated from the Payment. The Approval Amount indicates the amount that was not paid either via a Discount taken or Write off.

Allocation Line

Select the Allocation Line tab to view the details of this Payment Allocation.

The Allocation Lines displays the Invoice and Payment which were linked via the Payment Allocation. It also displays the Amount, Discount Amount, Write-off Amount, and any Over/Under Payment.

In this example, the Payment made for Invoice 200002 was 161.00, while the Invoice Amount was 161.12. At the time of Payment, the 0.12 was written off.

Reversing Payment Allocations

There may be instances where a Payment was allocated to the wrong Invoice. In those instances, it is necessary to reverse the Allocation. This is done in the Allocation View.

Select the Allocation tab to return to the header.

Select the Close button and the following dialog will appear.

Select Reverse - Correct from the drop down list and select the OK button.

This Process will reverse the Allocation (in a sense unlink the Payment and Invoice). The Accounting transactions associated with the Payment Allocation are also reversed. The Allocation now has a status of Reversed. The Payment can then be allocated to a different Invoice using the Payment Allocation process described above.

Payment Allocation - Accounting Consequences

When Payments are posted, the Organization used in the accounting transactions is the Organization defined for the Bank Account selected in the Payment. The following outlines the accounting transactions generated for Payment Allocations.

AR Payment

    DR: Bank Asset

    DR: Discount Expense

    DR: Write Off    

           CR: Receivables

AR Cash Payment

    DR: Cash Transfer

    DR: Discount Expense

    DR: Write Off    

           CR: Receivables

AR Prepayment

    DR: Customer Prepayment

    DR: Discount Expense

    DR: Write Off    

           CR: Receivables

AP Payment

    DR: Vendor Liability      

           CR: Discount Revenue

           CR: Write Off

           CR: Payment Selection

AP Cash Payment

    DR: Vendor Liability      

           CR: Discount Revenue

           CR: Write Off

           CR: Cash Transfer

If Cash based accounting is selected in the Accounting Schema the Payment Allocation postings would include transactions to Revenue and Expenses.

If Commitment Accounting is selected in the Accounting Schema the account used for Product Expense is defined in the Product window. The account used for Commitment is defined in the Accounting Schema. The Posting type for the document is Commitment.

AP Payment

    DR: Commitment Offset 

           CR: Product Expense

PAYMENT ALLOCATION UTILITIES

Reset Payment Allocations

There may be instances when a large number of Payment Allocations need to be deleted and re-allocated. These may be for a specific date or date range, Business Partner or Business Partner Group.

Compiere provides a utility to delete selected Payment Allocations and Auto Matching Payments to Invoices. When the Payment Allocations are deleted, all corresponding Accounting transactions are deleted so it is as if the Allocation was never entered. If you require an audit trail of the initial Payment Allocation and then the corrected Payment Allocation, you should use the Reverse Allocation method in View Allocation described above.

To delete or Reset Payment Allocations, click on the Reset Allocation process from the Main Menu.

Click the OK button to select the Parameters to be used for the Reset Allocation process.

A parameter dialog will display.

Select a Business Partner Group, Business Partner, and Account Date range to limit the number of Payment Allocation records that will be deleted.

Leaving all parameters blank will delete all Payment Allocation records for any open periods.

Select the OK check box to initiate the Reset Allocation process.

Upon completion, the following message dialog will display.

The message dialog indicates the number of Payment Allocation records that were deleted.

These Payments and Invoices can now be re-allocated or linked.

Auto Allocation

The Reset Allocation process deletes the records that 'linked' a Payment or Payments to an Invoice or Invoices. You can re-allocate these manually using the Payment Allocation detailed in the previous section, or you can use the Auto Allocation process. Auto Allocation attempts to match existing Invoices to existing Payments.

To automatically allocate Payments and Invoices, click on the Auto Allocation process from the Main Menu. The icon for Auto Allocations indicates that this is a process.

Select the OK button to select the parameters for this Auto Allocation.

Select a Business Partner Group or Business Partner to limit the number of Invoices to be allocated to Payments.

Select an AP - AR option of Receivables, Payables, or Receivables and Payables.

Select the Allocate Oldest First check box if you want the process to allocate payments to the oldest invoices first (this is after it has processed direct matches.

If the Parameters are left blank, the process will attempt to match all unallocated Payments and unpaid Invoices.

Note: If the net of the invoices and payments is 0, the system will automatically mark all records as allocated.

When the process has completed the following message dialog is displayed.

The message dialog indicates the number of allocation records created including the number of invoices and number of payments.

After Auto Allocation is run there may be additional Payments or Invoices to be allocated.

When Auto Allocation is run the system interrogates the Payments and Invoices and links them in the following order.

1. Any Payment that references an Invoice is linked to that Invoice. This is the situation when an Invoice is selected in the Payment window.

2. Any Invoices referenced in a Payment Selection is linked to that Payment. This is the situation when Payment Selection is run to select Vendor Invoices to be paid.

3. If a Business Partner's Open Balance is 0, then the process will match all Invoices to an Unallocated Payment. This would be the situation when Payments were allocated to Invoices manually using Payment Allocation.

4. Any Invoices and Payments that are for the same amount and were not allocated in the previous 3 scenarios are allocated. This would be the situation when Payments were allocated to Invoices manually using Payment Allocation or if there was an Invoice and Credit Memo for the same amount.

5. If the Allocate Oldest First check box was selected, the system would allocate the Payments to Invoices, until either no invoices or no payments remained. This may result in a partially allocated Payment or Invoice as well as Payments or Invoices that are not allocated.

Hints and Tips

We suggest you do a back up of your database prior to running the Reset Allocation process as there is no undo or audit trail

Run Reset Allocation and Auto Allocation in your test environment first to determine how many records will be deleted and how many will be Auto Allocated. It may be easier to reverse the incorrect Allocations and manually re-allocate them.

Reset Allocation will not delete any Allocations for posting periods that are closed.

A Payment Allocation record associated with Cash Journals is not deleted.

When the Auto Allocation process allocates Payments to Invoices based on a Business Partner's Open Balance being 0, any discounts or write offs are not taken into consideration.

BANK STATEMENT

In Compiere, the Bank Statement is used to reconcile the Payment transactions entered in Payment or generated in Payment Selection, with the equivalent information from you bank.

Note: For the purposes of clarification, 'Bank Statement' will refer to the Compiere window and 'bank statement' will refer to the document from your bank either in paper or electronic form.

When Payments are entered or generated, the Bank-In-Transit account for a given Bank Account. As you recall, for Payment and Payment Selection you are required to select a Bank Account.

The Bank Statement reflects the real Statement: Receipts are displayed with a (plus) , Payments with a (minus) . The Statement amount is made up by the Transaction Amount plus/minus Charges plus/minus Interest. The Bank Statement window allows you to reconcile your Bank Statements.

Entering Bank Statements

Click on Bank Statement from the Main Menu to open the Bank Statement window.


 
Select the Bank Account you want to display. The Name defaults to the current date.

Enter in the beginning balance as indicated on your bank statement.

The EFT Statement Reference and EFT Statement Date are System Maintained. They will be updated, if you have loaded your bank statement records.

Select the Match Bank Statement button if you have imported your bank statement and want the system to try to match the statement lines with unrecognized payments. The matching is done based on algorithms you have written for matching.

You can either select the Create From button to automatically generate the statement from unrecognized payments to this bank account.

The unsigned amounts represent the AR receipts and the signed amounts represent the AP disbursements.

Or you manually enter the line items from the statement in the Statement Line tab.

Enter the Statement Line Date and the Account Date and Effective Date will default to the same date. You may update either of these dates as required.

Enter a Statement amount as found on your bank statement.

The remaining values can be populated in a number of ways.

If you have already entered the Payment (either in Payment or Payment Selection), select the Payment field to display a list of all unrecognized Payments.

Select the desired Payment record. Unselect the Receipt check box if you are entering a Vendor Payment.

When you have selected a record, the appropriate fields are updated in the Bank Statement Line.

Compiere has updated the Transaction Amount with the amount of the Payment and the Payment field references the Payment record. Since there was a difference between the Statement Amount and the Transaction Amount, Compiere has put the difference in the Charge Amount field. When a value is entered here, the Charge field is displayed.

Select the appropriate Charge account for recording this difference.

Once the record is saved, the Business Partner and Invoice fields in the Reference area are also updated.

Alternatively, you can also select the Business Partner or Invoice field.

After selecting a record the following fields in the Bank Statement Line are updated.

Next, select the Create Payment button to generate the Payment record for this Invoice.

When the Process has completed, a Payment is created and the corresponding fields updated in the Bank Statement Line.

You can right mouse click on the Payment field and Zoom to the Payment record.

The Payment has been created, allocated to the Invoice and Processed. There is no further action required.

If you are entering a Payment for multiple Invoices or for an Invoice with a discount, enter the Transaction Amount, and Business Partner, but leave the Invoice blank. This will create a Payment for that amount and Business Partner. It can then be allocated to the appropriate Invoice or Invoices using Payment Allocation as described in the previous section of this chapter.

Note: If you leave the Statement Amount at 0.00 the Payment will be created for the full Invoice amount. If you enter a value in the Statement Amount that is not equal to the full Invoice amount it will be recorded as an Over/Under Payment on the Payment record.

The last method for entering your Statement Lines is to do so manually. This will generally be the case for recording Interest or some Bank Fees.

Once you have completed reconciling, return to the Bank Statement tab and select the Process Statement button to mark the payments as reconciled.

The Ending Balance is updated and the Document Status is marked as Complete.

Once the Bank Statement has been "Completed" the Posted button will be displayed. You can post the document immediately or allow the application server to process it automatically.

Bank Statement - Accounting Consequences

When Bank Statements are posted, the Organization used in the accounting transactions for each Bank Statement Line is the Organization defined for the Bank Account selected in the Bank Statement. If, however, a Charge is selected in the Bank Statement Line, the Organization of the Bank Statement Document is used in the accounting transactions. Any required intercompany entries will be created.

The following outlines the accounting transactions generated for Bank Statement.

Charge (Income)

    DR: Bank Asset

           CR: Charge Revenue

Charge (Expense)

    DR: Charge Expense     

           CR: Bank Asset

Interest (Income)

    DR: Bank Asset

           CR: Bank Interest Income

Interest (Expense)

    DR: Bank Interest Expense        

           CR: Bank Asset

Payment (AR)

    DR: Bank Asset

           CR: Bank in Transit

Payment (AP)

    DR: Bank in Transit       

           CR: Bank Asset

Bank Statement Considerations

When your Bank Statement has been processed the amount in your bank account should equal the balance of the Bank Statement, assuming that all items in your bank statement have been entered. Additionally, the balance in your Bank-in-Transit account should equal the total of all Payments entered that have not yet been reconciled to a Bank Statement.

This is a consideration that should be assessed when setting up your Bank Accounts and default accounts in Compiere. Compiere will allow the same Bank-in-Transit account for all bank accounts, but for reconciliation ease you may want to have unique default Bank records for each Account. (Refer to the previous section for additional information on the default accounts.)

If your most common form of Payment is check, the majority of the payments will have been entered in Compiere using the Payments window, either directly or as part of the Sales Order process.

If your most common form of Payment is direct debit or credit, the first indication of the transaction may be the statement from your bank. In that instance, Compiere allows you to enter the transactions in your Bank Statement, and generate the appropriate Payments directly.

When Payments are generated in this manner, you may want to perform more frequent reconciliations. This will ensure that the balance in your Bank Account is current. When you generate your payments directly or from the Sales process you may not need to reconcile as frequently. In any instance the position of funds available can be achieved by adding the Bank Account and Bank in Transit balances.

To transfer between Bank Accounts create a Charge referencing an account you have defined for Funds in Transit. In the Bank Statement that the funds were taken from, create a Statement Line for the Charge account created and enter the transfer amount (as a negative number). In the Bank Statement for the Bank Account the funds were transferred to, create a Statement Line for the Charge account created and enter the transfer amount (as an unsigned number).

DUNNING RUN

Dunning is used to send statements and past due reminders to your Customers. You specify, for a Customer if they will receive dunning letters and what type.

Dunning Letters are generated by the Dunning Run process. To initiate a Dunning Run, open the Dunning Run window from the main menu.


The Dunning Run defines the Level and date to use for generating Dunning letters. Enter a Dunning Date. This is the date that will be used to evaluate the Invoices to determine which to include.

Select a Dunning Level. The Dunning Level is defined for the Dunning definition. The Dunning definition, in turn, is reference by a Business Partner. This determines which Business Partner will be dunned.

Enter a Description if desired.

Select the Create Dunning Run button to initiate the Dunning Run Process. The following parameter dialog is displayed.

Select the Include Disputed check box to indicate that Invoices marked as In Dispute should be included.

Select the Only Sales Invoices check box if AP Invoices should be excluded.

Select a Default Sales Rep and the Dunning Currency for the Dunning Letter.

Select a Business Partner or Business Partner Group if you want to further restrict records selected.

Click the OK button to start the Dunning Run process.

When the process has completed the Dunning Run window indicates the results.

The message text area at the bottom of the window indicates that 11 Invoices and - Payments are included in this Dunning Run.

Select the Entry tab to view the Business Partners who have Dunning records

Each Business Partner is displayed as a separate record. The Contact information that will print on the Dunning Letter is displayed along with the Amount. The Quantity represents the number or Invoices and Payments included.

You may also add a Document Note to print if desired.

Select the Line tab to view the Invoices and Payments that were included in this Dunning Run.

You may delete records here if you determine they should not be included in the Dunning Letter. The Amount and Quantity in the Entry tab will reflect the changes.

Return to the Entry tab to print the Dunning Letter.

Select the Print button on the toolbar to print the Dunning Letter.

The Dunning Letter (in this example a Customer Statement) is displayed. You can either print it to mail to your customer, export it to a PDF or other file type or Email it to your customer.

In this example, we are using Dunning to generate a Customer Statement. The Print Format, the Name printed and the Document Note are all defined in the Dunning record.

For additional information on defining Dunning records, refer to the Business Partners Chapter.

You can also print the Dunning Letters generated in a Dunning Run in a batch process.

To initiate the Dunning Run, click on Print Dunning Letters from the Main Menu to start the process.

Select the Start button to initiate the print or E-mail process.

Select the E-mail PDF if you will be sending the Dunning Letters as PDF attachments. Keep in mind that the Business Partner must have a valid E-mail address.

Select a Mail Template if the E-mail PDF check box is selected.

Select the Dunning Run you want to use to either print or E-mail the Dunning Letters.

Select the OK button to start the process.

When the process is completed a message is displayed indicating the number of letters printed or E-mails sent.

If a Dunning Run has been Printed/Processed, the Collection Status on each dunned invoice will be updated to Dunning.

You can update this field to Collection Agency, Legal Procedure, Uncollectable or blank as appropriate.

REPORTING ON OPEN ITEMS

Compiere provides a number of predefined reports for analyzing your Cash receipts and Open Items. Like all reports in Compiere, you can modify the layout and content to meet your needs.

Open Items Reports

The available reports on Orders can be found in the Menu under Open Items.

Cash Journal Detail: This report displays Cash Journal Lines, both posted and not yet posted. You select a Cash Book, Organization and to and from Accounting Date.

Open Items: This report displays all unpaid invoices. Select a Business Partner and a range of Due Dates. A negative number indicates invoices that are due on a future date and positive number indicates invoices that are already over due. The number of days is subtracted or added to the current date to determine the invoices to include. Select the Sales Transaction check box to generate a report on Customer Invoice transactions. Leaving the Sales Transaction check box unselected will generate a report on Vendor Invoice transactions. Note that Invoices that are paid in Cash will appear on the Open Items Report until the Cash Journal is processed.

Aging: This report displays Open Items classified in different Aging 'buckets'. These include, but are not limited to, 1-7 days, 8-30 days, 31-60 days, >31 days, >61 days etc. You may select a Due Date, Currency, Business Partner Group, and Business Partner. Select the List Invoices check box to indicate that the report should list the specific Invoices. Select the Sales Transaction check box to generate a report on Customer Invoice transactions. Leaving the Sales Transaction check box unselected will generate a report on Vendor Invoice transactions. When the report displays there will be numerous aging 'buckets', therefore Open Invoices will appear in more than one bucket. The buckets are defined invoices that are both past and those that are due at a future date. It is suggested that you customize the report to display the aging buckets that are required for your analysis. For more information on customizing reports, refer to the Info and Reporting Chapter.

Payment Allocation: This report displays all Payments that have been allocated. You may select a Business Partner and Invoice. The report will list the Payment or Cash Journal Line, Invoice, Payment Allocation, Amount, and any Write off or Discount. If a Payment has not been associated with an Invoice, then the Invoice field will be blank.

Unrecognized Payments: This report displays all Payments that have not been reconciled with a Bank Statement. There are no parameters for this report. It will list the Payments, Invoices, Business Partners, Dates, and Amounts associated with the Payment. For more information on customizing reports, refer to the Info and Reporting Chapter.

Labels
  • None