If a customer takes up a claim or credit note value when making a payment and this transaction has not yet been processed, a remainder transaction can be created for the claim portion of the payment. When the claim is raised this remainder transaction needs to be manually offset.
If, when the claim is processed the value of the claim does not equal the amount the customer was expecting and therefore the invoice has been short paid, a remainder balance will represent the disputed amount.
If an over payment was made, this extra money can be stored on the account as a remainder with a reference to indicate that it is an over payment. This gives the customer the opportunity to investigate and advise how this amount is to be allocated. Using the Remainder system is a better way of handling this situation than arbitrarily allocating the excess funds to an invoice. If the over payment is a small amount it can be written off using the Auto Adjust feature.
Remainders can be created for overpayments. For example, the customer sends a cheque for $150 but the amount required is only $80, so a remainder is created for $70. Remainder amounts can also be created for short payments, meaning the customer has underpaid. In these circumstances the remainder is a negative amount. In circumstances where an invoice is short paid due to a dispute, a dispute journal would be written for the short payment with the outstanding balance of the dispute (short payment) amount.
Remainder transactions created from the Remainders & Deduction Screen are aged according to the customer terms. For example a 30 day account calculates the due date as the 28th of next month giving credit controllers more time to resolve claims.
The remainder facility can be used to record a full payment as unallocated on the account. Remainder amounts are stored on the system as journals that have a reference indicating the reason for the remainder amount and are stored on the system until they are allocated to a particular transaction.
To allocate a remainder or unallocated payment value, use the Payment Type JNL for journal and enter the value as zero. Then offset the claim or credit note to the remainder transaction. Or allocate the remainder that was created for unallocated payment to the applicable invoices.
If the type of remainder being processed is a D for Remainder, an unallocated entry is created regardless of whether it is a positive or negative value. When T for Remittance is selected the entry will depend on the following value.
- If negative it will create a Claim transaction on the Daily Transaction Header file (DSTRA) with the reference and value and the transaction will reflect as a claim in Debtors.
- If positive it will create an unallocated record in the Debtors Transaction file in the same way as selecting the D for Remainder does.
- In the menu, expand Base Modules > Distribution > Debtors & Claims > Accounts Receivable > Entry and then double-click Debtor Cash/Journal Entry. ARE005 Cash Entry payment selection panel appears.
- Select Payment function CSH and click OK.
- Enter the header details and click OK. ARE005 Cash Entry payment detail panel appears.
- Select the relevant claim to be processed and click OK. Amount equal to the value of the over payment get displayed in remainder amount.
- Enter the amount to be paid and click Remittance. ARE005C Remainder/Remittance Entry panel is displayed.
- Click OK.
Note: For any short payments that are on dispute, a new journal can be created for the short payment. Journal type for the dispute must be setup in TMSAR/BK-PAYT and TMSAR/BK-PAYTD.
For example on an invoice of $100 if there is a dispute of $30 and a payment of only $70 is made, then on the Remainder/Remittance panel, you will have to enter the full invoice amount ($100) against the invoice number with remainder payment action type=1 Allocate. This should be followed by the dispute amount ($30-) with remainder payment action type = 4 Dispute. This will create a journal of $30 as outstanding balance for the disputed amount.
For excel import into Remittance/Remainders, if an exact match is found for the invoice reference and the amount the system will default the action type to 1=allocate to the referenced document, if reference is not found and the amount is positive then the action type will default = 3 Unallocate.
