Reconcile customer payments with a cash receipt journal or from customer ledger entries

When you receive a cash payment from a customer or give a cash refund, you can apply the payment or refund to close open debits or credits. You can specify the amount to apply. For example, you can apply partial payments to customer ledger entries. Closing customer ledger entries keeps customer statistics, account statements, finance charges, and so on, up-to-date.

Tip

Tip:
On the Customer Ledger Entries page, red font means that the related payment is past its due date. If overdue payments are becoming a problem, we can help you reduce their frequency. You can enable the Late Payment Prediction Setup extension, which uses a predictive model that we built in Azure Machine Learning to predict the timing of payments. These predictions help you reduce outstanding receivables and fine-tune your collections strategy. For example, if a payment is predicted to be late, you can adjust the terms of payment or the payment method for the customer. For more information, see Late Payment Predictions.

You can apply customer ledger entries in several ways:

• Enter information on the following pages:
  • The Payment Reconciliation Journals page. For more information, see Applying Payments Automatically and Reconciling Bank Accounts.
  • The Payment Registration Setup page. For more information, see Reconcile Customer Payments from a List of Unpaid Sales Documents.
  • The Cash Receipt Journals page. For more information, see To fill and post a cash receipt journal.
• By filling in the Applies-to Doc. No. field on sales credit memo documents. For more information, see To apply a credit memo to a single customer ledger entry.
• By using the Set Applies-to ID action on a customer ledger entry. For more information, see To apply a payment to a single customer ledger entry.
• By using the Apply Entries action on the Bank Deposit page, and then entering the invoice number in the Applies-to ID field. For more information, see Create Bank Deposits.

Note

Note:
If the Application Method field on the customer card contains Apply to Oldest, payments are applied to the oldest open credit entry, unless you manually specify an entry. If the application method is Manual, you always apply entries manually.

To fill and post a cash receipt journal

A cash receipt journal is a type of general journal. You can use it to post transactions to general ledger, bank, customer, vendor, and fixed assets accounts. You can apply the payment to one or more debit entries when you post the payment. You can also apply from the posted entries later.

1. Choose the icon, enter Cash Receipt Journals, and then choose the related link.

2. Choose the Edit Journal action.

3. Select the relevant batch in the Batch Name field.

4. Fill in the Posting Date field.

5. In the Document Type field, select Payment.

   The Document No. field is filled by the number series assigned to the batch.

6. Use the External Document No. field to store an identifier, such as the customer's check number.

   Note

   Note:
   By default, the External Document No. field is hidden. If it is, and you want to use it, you can use personalization to add it. For more information, see Personalize your workspace.

7. In the Account Type field, select Customer.

8. In the Account No. field, select the customer.

9. To post the application at the same time as you post the journal, fill in the following fields:

   1. In the Bal. Account Type field, select G/L Account for cash payments, and Bank Account for other payments.
   2. In the Bal. Account No. field, select the cash account for cash payments, or the relevant bank account for other payments.

10. Post the journal.

To apply a payment to a single customer ledger entry

1. Choose the icon, enter Cash Receipt Journal, and choose the related link.

2. Choose the Edit Journal action.

3. On the first journal line, enter the relevant information about the entry to be applied.

4. In the Document Type field, enter Payment.

5. In the Account Type field, enter Customer.

6. In the Bal. Account Type field, enter Bank Account.

7. In the Applies-to Doc. No. field, choose the field to open the Apply Customer Entries page.

8. On the Apply Customer Entries page, select the entry to apply the payment to.

9. In the Amount to Apply field, enter the amount you want to apply to the entry. If you don't enter an amount, the maximum amount is applied.

   At the bottom of the Apply Customer Entries page, you can see the specific amount in the Applied Amount field and also whether the application balances.

10. Choose the OK button. The Cash Receipt Journal page now shows the entry in the Applies-to Doc. Type and Applies-to Doc. No. fields.

11. Post the cash receipt journal.

To apply a payment to multiple customer ledger entries

1. Choose the icon, enter Cash Receipt Journal, and then choose the related link.

2. Choose the Edit Journal action.

3. On the first journal line, enter the relevant information about the entry to be applied.

4. In the Document Type field, enter Payment.

5. In the Account Type field, enter Customer.

6. In the Bal. Account Type field, enter Bank Account.

7. In the Amount field, enter the full payment as a negative amount.

8. To apply the payment to multiple customer ledger entries when posting, choose the Apply Entries action.

9. Select the lines with the entries that you want the applying entry to be applied to, and then choose the Set Applies-to ID action.

10. On each line, in the Amount to Apply field, enter the amount you want to apply to the individual entry. If you don't enter an amount, the maximum amount is applied.

    At the bottom of the Apply Customer Entries page, you can see the specific amount in the Applied Amount field and also whether the application balances.

11. Choose the OK button.

12. Post the cash receipt journal.

To apply a credit memo to a single customer ledger entry

1. Choose the icon, enter Sales Credit Memos, and then choose the related link.

2. Open the relevant sales credit memo.

3. To apply the credit memo to a single customer ledger entry when posting, in the Applies-to Doc. No. field, select the entry to which you want to apply the payment.

4. On the line in the Amount to Apply field, enter the amount you want to apply to the entry.

   If you don't enter an amount, application automatically applies the maximum amount. At the bottom of the Apply Customer Entries page, you can see the specific amount in the Applied Amount field and also whether the application balances.

5. Choose the OK button. The Sales Credit Memo page now shows the entry you selected in the Applies-to Doc. Type and Applies-to Doc. No. fields. And the amount of the credit memo to be posted, adjusted for any possible payment discounts.

6. Post the credit memo.

To apply a credit memo to multiple customer ledger entries

1. Choose the icon, enter Sales Credit Memos, and then choose the related link.

2. Open the relevant sales credit memo.

3. To apply the credit memo to multiple customer ledger entries when posting, choose the Apply Entries action.

4. Select the lines with the entries that you want the applying entry to be applied to, and then choose the Set Applies-to ID action.

5. On each line, in the Amount to Apply field, enter the amount you want to apply to the individual entry. If you don't enter an amount, the maximum amount is applied.

   At the bottom of the Apply Customer Entries page, you can see the specific amount in the Applied Amount field and also whether the application balances.

6. Choose the OK button. The Sales Credit Memo page now shows the amount of the credit memo to be posted, adjusted for any possible payment discounts.

7. Post the credit memo.

To apply posted customer ledger entries

1. Choose the icon, enter Customers, and then choose the related link.

2. Open the customer card for the customer with entries that you want to apply.

3. Choose the Ledger Entries action from the Related tab, and then select the line with the entry that is the applying entry.

4. Choose the Apply Entries action. The Apply Customer Entries page opens showing the open entries for the customer.

5. Select the lines with the entries that you want the applying entry to be applied to, and then choose the Set Applies-to ID. action.

6. For each line in the Amount to Apply field, enter the amount you want to apply to the individual entry. If you don't enter an amount, the maximum amount is applied.

   At the bottom of the Apply Customer Entries page, you can see the specific amount in the Applied Amount field.

7. Choose the Post Application action. The Post Application page appears with the document number of the applying entry and the posting date of the entry with the most recent posting date.

8. Choose the OK button to post the application.

   If the posted application resulted in closed customer ledger entries, the Open field is cleared for these ledger entries.

9. To see the ledger entries, choose the icon, enter Customers, and then choose the related link. Browse to the card for the relevant customer to see the ledger entries.

On the ledger entry list, on the line that contains the ledger entry that was fully applied to, you can see that the Open check box isn't selected.

Note

Note:
After you select an entry on the Apply Customer Entries page, or several entries by setting the Applies-to ID, the Applied Amount field on the journal line will contain the sum of the remaining amounts for the posted entries you've selected, unless the field contains something already. If you select Apply to Oldest in the Application Method field on the customer card, the application occurs automatically.

To apply customer ledger entries in different currencies to one another

If you sell to a customer in one currency and receive payment in another currency, you can still apply the invoice to the payment.

Here's an example. You apply Entry A in one currency to Entry B in another currency. The posting date on Entry A is used to find the exchange rate to use to convert amounts on Entry B. The exchange rate is found on the Currency Exchange Rates page.

Applying customer ledger entries in different currencies must be enabled. For more information, see Enable Application of Ledger Entries in Different Currencies.

1. Choose the icon, enter Cash Receipts Journal, and then choose the related link.
2. Open the journal you want, and fill in the first empty journal line using a currency code.
3. Choose the Apply Entries action.
4. Select the line with the entry you want to apply to the entry in the cash receipt journal, choose the Set Applies-to ID action, and then select the entry you want to apply to.
5. Choose the OK button to return to the cash receipt journal.
6. Post the sales journal.

Important

When you apply entries in different currencies, the entries are converted to USD. Although the exchange rates for the two currencies are fixed, for example between USD and EUR, there may be a small residual amount when they are converted to USD. These small residual amounts are posted as gains and losses to the account specified in the Realized Gains Account or Realized Losses Account fields on the Currencies page. The Amount (USD) field is also adjusted on the vendor ledger entries.

To correct an application of customer entries

When you correct an application, correcting entries are created and posted for all entries. The correcting entries are the same as the originals but have an opposite sign in the Amount field. The correcting entries include all general ledger entries derived from the application. For example, the payment discount and currency gains/losses. The entries that the application closed are reopened.

1. Choose the icon, enter Customers, and then choose the related link.
2. Open the relevant customer card.
3. Choose the Ledger Entries action.
4. Select the relevant ledger entry, and then choose the Unapply Entries action.
5. Alternatively, choose the Detailed Ledger Entry action.
6. Select the application entry, and then choose the Unapply Entries action.
7. Fill in the fields in the header, and then choose the Unapply action.

Important

If an entry has been applied by more than one application entry, you must unapply the latest application entry first.

See also

Managing Receivables
Sales
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