Wednesday, July 30, 2008

Customer overpayment

When you perform an AR Open transaction editing, you could fully settle a payment transaction that has larger amount than an invoice transaction.

What happen to the overpayment amount?
This is depends on 2 parameters specified in Accounts receivable\Parameters\Settlement tab,
Maximum overpayment or underpayment and Maximum penny difference.
If the overpayment amount is larger than the amount specified in Maximum overpayment or underpayment field, no settlement will happen to overpayment amount and it will remain as balance amount for the payment transaction to be settled in future.
If the opposite case, system will automatic fully settle both payment and invoice transaction.

What ledger account is posted to for the auto settlement depends on the second parameter,
Maximum penny difference.
If the overpayment amount is equal or less than the amount specified in
Maximum penny difference field, the difference will be posted to the penny difference ledger account that is specified in the General ledger\Setup\Posting\System accounts form. If the overpayment amount is greater than the amount specified in Maximum penny difference field, than it will be posted to the Customer cash discount ledger account that is specified in the System accounts form.

Below are the voucher transactions for automatic fully settlement for overpayment:-
Posting type: Penny difference in default currency
Dr AR 5
Cr Penny difference/customer cash discount 5

The same logic should be used for underpayment, though I have not yet tested it out.

1 comment:

Mac Cuellar said...

Thanks for this post. Where do we see the actual transactions with accounts credited and debited?