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Cash Receipts ProcessingApplication Overview
Cash Receipts Processing is an application that you will use quite often. You will use it whenever you have received payments from any of your customers and want to apply those payments to the customer's account.
A few important concepts that you should understand will be covered here, before the explanation of Cash Receipts Processing, even though some of them have been covered before.
Account Methods ‑ Open Item And Balance Forward Processing
When we speak of an Open Item here, we mean a transaction on the customer's account that has not been fully settled yet. For example, the customer made a purchase from you in the sum of $500, but he has not yet paid you for it. The record of this transaction is called an open item. All of these transactions are stored in a file called the A/R Open Item File.
When a customer uses the Balance Forward method of accounting, he does not pay off individual open items every time he sends you a payment. The money that he sends you just goes onto his account, and pays off the earliest open items outstanding. The way banks handle credit cards is very much like this. When you send them a payment, it does not pay off the particular open item generated as the result of some purchases you have previously made. The payment just goes onto your account, and reduces the amount that you owe the bank.
In Open Item accounting, on the other hand, when the customer sends you a payment, he usually indicates which open items he is paying. Some customers will insist that their account be handled on an Open item basis, since they anticipate the possibility of disputes on certain items, and they do not want any of their payments to apply to those disputed items.
When you receive a payment from a customer, the accounting method that you have specified for him will determine how you enter the Cash Receipts transaction. If the customer is a Balance Forward customer, all you have to enter is the date of the check, its check number and its amount. If the customer is an Open Item customer, on the other hand, you have to enter additionally which open items to apply the payment to. However, if you elect to do so, you can have the program automatically apply the payment to the oldest open items on the customer's account.
A/R Cash vs. Non‑A/R Cash
When the term A/R Cash is used here it refers to cash that is being applied to a customer's account. The account of this cash will reduce the total amount your customer owes you. Since this amount is applied toward the total amount owed you by the customer, in other words it applies toward the total amount of your Accounts Receivable; this payment is called A/R Cash.
Occasionally, you will receive a payment that does not affect the total of your Accounts Receivable, and is not applied to a customer's account to reduce the amount he owes you. For example, if you were to sell some used desks or other office equipment and if you received a cash payment for them, the amount of this cash is not A/R cash. It does not apply to the account of one of your customers to pay off open items for which he owes you payment. But you would still want to record the fact that the cash had been received.
Apply‑To Numbers
As was said above, if a customer uses Open Item accounting, when he sends in payment on his account, he usually designates which open items he is paying with the check. In other words, he applies cash to particular open items.
The way the programs keep track of this is by storing in the payment transaction the invoice number of the sale transaction that is being paid. The invoice number that is stored in the payment transaction is called its apply‑to number.
When you are applying cash to the account of an Open Item customer, the program will ask you to enter the apply‑to number of the payment. In other words, enter the invoice number of the sale transaction that you want to apply the cash to.
Open Credit
Open Credit is some amount of cash that you put on an Open Item customer's account that is not applied to any specific open items. For example, if a customer sent you a payment that was too large, and there was still cash left over after paying off all of his outstanding open items, you would place the remainder of the payment on the customer's account as Open Credit. This Open Credit could later be applied to open items when the customer makes future purchases.
The way you enter Open Credit on account is to enter a zero apply‑to number, or just press RETURN for the Apply‑To Number Entry field, when you are applying the cash to the customer's open items. The program will then display ***Open Credit On Account*** and allow you to enter the amount to put on account as Open Credit.
Enter a new Cash Receipts transaction for the customer, using the same check number as the original check received from the customer and today's date. Enter the amount of the check as zero. Then proceed to apply this check to the customer's account. First of all, bring up the amount of open credit on the customer's account by entering zero for the apply‑to number. For example, let us say that the customer has $1,000 on account of Open Credit that you now want to apply to purchases that he has made. When you enter zero for the apply‑to number, the program will show you that the customer has $1,000 of Open Credit. For the Amt. Paid field, enter ‑1,000 dollars. This will cancel out the Open Credit, and display that you now have $1,000 to apply to other items. Then just proceed to apply this $1,000 in the usual way.
Discounts And Allowances
Quite frequently, when a customer sends in payment on his account, he also claims some sort of a discount on those items. You, of course, have to determine whether that discount is valid or not, and whether you are going to allow it. Usually this decision is fairly straightforward: did the customer send in payment early enough to qualify for the discount? When you apply cash to an Open Item customer's account, as you bring up each unpaid open item for payment, the program will calculate and display the amount of any valid discount. This valid discount is calculated based on how many days the customer has to make payment before he loses the discount, and what the percent of discount is that he is entitled to. This calculation is for your information. You can enter any amount of discount that you want to give the customer, or no discount at all. You are not constrained to enter the calculated amount.
Occasionally, you may want to give the customer some additional credit on his account other than the amount of the payment or a discount. For example, upon receipt of the goods ordered, the customer finds that their quality is not as high as he expected, but instead of returning the shipment, he says he'll take them as they are if you'll negotiate a slightly lower price with him. So you agree to take a certain amount off the amount of the original invoice, at the time that you are entering the payment for it. This additional amount of credit is called an allowance.
Whether the customer uses Balance Forward or Open Item accounting, you will be given the opportunity to enter, along with each Cash transaction, the amount of any discount and any allowance that you want to give the customer.
Multiple Cash Accounts
It is not uncommon for a business to have more than one bank account in which it deposits the cash it receives. If you specified in A/R Setup that you have more than one Cash account, the program will ask you, when you begin to add new Cash Receipts transactions, in which Cash account you are going to deposit these receipts. Enter the G/L account number of the account, and then enter all of the Cash transactions that are to be processed for that Cash account. You can then end off on the processing for that Cash account and go on to enter the transactions for the next Cash account.
Open Invoice Worksheet
It can be very helpful to you to have at hand a list of all the open items on a customer's account and how much he owes on them before you actually begin entering Cash Receipts.
There is a report called the Open Invoice Worksheet that will allow you to print, for whichever customers you choose, a list of the open items for each customer, how much is currently on each open item, and the amount of discount still valid on the item. Beside each item, a space is left for you to enter how much cash you want to apply to that item. The data entry of the transactions can be very rapid once you sit down with this report at hand.
Cash Receipt Import (Details & Summary)
We support two types of CSV formats for Cash Receipt Import: Detail and Summary.
Detail Cash Receipt CSV Format: Detail means the CSV file contains the check and apply-to invoice information. In Detail format, the customer number field is optional since the system can reference it based on the apply-to invoice number. If the customer number is provided, it will be used for cross checking to ensure data integrity. The Detail CSV Format can be used for, but not limited to, the following type of scenarios: (1) Lock Box: The customer payments are sent to a lock box and your bank will perform a cash receipt on your behalf and send you the data in electronic format. (2) High Volume Customer: A high volume customer, like Wal-Mart, may pay a thousand invoices with one check and the check and invoice information is available in a spreadsheet.
Summary Cash Receipt CSV Format: Summary means the CSV file only has the check information, without the apply-to invoice. The Customer Number must be provided in the CSV file. The Summary CSV Format can be used for, but not limited to: Self Scanning Checks and Clearing: Many banks have begun providing high volume, premium customers with an in-house scanner and OCR software for scanning checks. The checks clear much faster than the conventional way of depositing checks into the bank. The scanning OCR system can usually provide CSV data to speed up the Elliott Cash Receipt Import. Since the summary CSV file does not contain all necessary information for a cash receipt, the import is to speed up the cash receipt data entry, not to totally automate it. The user will still need to perform the cash application.
As part of the Cash Receipt Import improvement, Elliott V7.4 now supports batch ID and cash receipt transactions can be printed and posted by batch ID.
Run Instructions
Select Cash Receipts Processing from the pull down A/R Processing window. The following screen will then be displayed:
Cash Receipts Processing Entry Screen
The following options are available:
* Add payments received from your open item and balance forward customers * Make changes to the cash transactions entered * Delete transactions entered * Print to screen, the payments entered by customer, by check number, showing the amounts to be applied to the various invoices or to their balance forward account * Print a worksheet to help in dispersing the payments to the customers open invoices due
To return to the menu bar, press the ESC or F10 key. To leave this application, press X for EXIT when positioned at the menu bar. Entry Field Descriptions
Non‑A/R Cash Receipts ‑ Balance Forward Or Open Item Customers
A/R Cash Receipts ‑ Balance Forward Customers
Automatically Apply A/R Cash Receipts
A/R Cash Receipts ‑ Open Item Customers
Print Open Invoice Worksheet
Date filled out _________ by __________ ADD CHANGE DELETE
CASH RECEIPTS PROCESSING FILE LOAD SHEET
* * * NON-A/R CASH OR BALANCE FORWARD CUSTOMERS * * *
1. Customer No _ _ _ _ _ _
2. Check No _ _ _ _ _ _
3. Receipt Date _ _ / _ _ / _ _
4. Amount Paid $ _ , _ _ _ , _ _ _ . _ _ (Net Cash)
5. CR A/R? (RETURN) = Yes N = No
Non-A/R_Cash_Customers(if #5 is No)
6. Account Number _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _
7. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
A/R_Cash,_Balance_Forward_Customers
6. Discount Amt $ _ _ _ , _ _ _ . _ _
7. Allowance Amt $ _ _ _ , _ _ _ . _ _
Allowance Acct _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ (if an amount is entered for line #7)
8. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Date entered _____ by __________ Date verified _____ by __________
Date filled out __________ by __________ ADD CHANGE DELETE Page 1 of 3
CASH RECEIPTS PROCESSING FILE LOAD SHEET * * * OPEN ITEM CUSTOMERS * * *
1. Customer No _ _ _ _ _ _
2. Check No _ _ _ _ _ _
3. Receipt Date _ _ / _ _ / _ _
4. Check Amount $_ , _ _ _ , _ _ _ . _ _ (Gross Amount)
5. CR A/R (RETURN) = Yes (Note: Non-A/R Cash cannot be applied against open items)
Do You Wish to Automatically Apply This Check? (RETURN) = No
* * * APPLY AGAINST OPEN ITEMS * * *
Open items are displayed as follows:
Apply-to Type Doc-Date Due-Date Orig-Amt Balance Valid Disc XXXXXX XXXX XX/XX/XX XX/XX/XX XXX,XXX.XX XXX,XXX.XX XXX,XXX.XX
Press F1 key for Apply-to Document # to display the next unpaid open item on file.
Press F2 key for Apply-to Document # to display the next cash application you already entered.
Press F3 key for Apply-to Document #'s to display a range of unpaid open items on file. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Apply-to No _ _ _ _ _ _
6. Amount Paid $ _ , _ _ _ , _ _ _ . _ _ or F1 key
7. Discount $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
8. Allowance $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
Account # _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ (necessary if an amount is entered for line 8)
9. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F1 = Payment: Check No. 999999 or Open Credit on Account if Apply-to No = 0
Date filled out __________ by __________ ADD CHANGE DELETE Page 2 of 3
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Apply-to No _ _ _ _ _ _
6. Amount Paid $ _ , _ _ _ , _ _ _ . _ _ or F1 key
7. Discount $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
8. Allowance $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
Account # _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ (necessary if an amount is entered for line 8)
9. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F1 = Payment: Check No. 999999 or Open Credit on Account if Apply-to No = 0
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Apply-to No _ _ _ _ _ _
6. Amount Paid $ _ , _ _ _ , _ _ _ . _ _ or F1 key
7. Discount $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
8. Allowance $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
Account # _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ (necessary if an amount is entered for line 8)
9. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F1 = Payment: Check No. 999999 or Open Credit on Account if Apply-to No = 0
Date entered by Date verified by
Page 3 of 3
Apply-to No _ _ _ _ _ _
6. Amount Paid $ _ , _ _ _ , _ _ _ . _ _ or F1 key
7. Discount $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
8. Allowance $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
Account # _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ (necessary if an amount is entered for line 8)
9. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F1 = Payment: Check No. 999999 or Open Credit on Account if Apply-to No = 0
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Apply-to No _ _ _ _ _ _
6. Amount Paid $ _ , _ _ _ , _ _ _ . _ _ or F1 key
7. Discount $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
8. Allowance $ _ _ _ , _ _ _ . _ _ (RETURN) = 0
Account # _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ (necessary if an amount is entered for line 8)
9. Reference _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F1 = Payment: Check No. 999999 or Open Credit on Account if Apply-to No = 0
Date entered _____ by __________ Date verified _____ by __________
* * DISTRIBUTION * * *
Account # Amount Job No
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ $_ , _ _ _ , _ _ _ . _ _ _ _ _ _ _ _
Date entered ___________ by _______ Date verified ________ by ________
Cash Receipts Processing (Screen #1)
Open Document Search (Screen #2)
Cash Receipts Processing (Screen #3)
Open Invoice Worksheet
Post Cash ReceiptsApplication Overview
Post Cash Receipts transfers all transactions previously created in Cash Receipts Processing into the A/R Open Item File. In addition it sends this information to the Customer File, Salesman File, and the A/R Distribution To G/L file. Consequently the result of posting serves to automatically adjust the balance that a given customer owes your business.
When you perform a posting, the system prints a journal of all transactions that were posted.
Run Instructions
Select Post Cash Receipts from the pull down A/R Processing window. The following screen will then be displayed:
Post Cash Receipts Entry Screen
The following option is available:
* Post cash receipts
To return to the menu bar, press the ESC or F10 key. To leave this application, press X for EXIT when positioned at the menu bar.
Entry Field Descriptions
Post Cash Receipts
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