Apply Overpayments - ARSPOV

The purpose of this process is to apply overpayment transactions to outstanding account receivables. When a customer overpays on an invoice, the payment on outstanding invoices is applied on the CR Summary screen. The overpayment is applied on the CR Direct Cash screen. The overpayment is not applied to a particular invoice. The overpayment is instead applied to the customer's account and an object code that represents Unapplied Cash. When the customer has additional invoices to be paid, this process allows for the Unapplied Cash to be applied to outstanding invoices. This should occur prior to invoicing the customer and should also reduce the outstanding balance on the invoice for calculating late charges.

Use this special function to select which transactions qualify as Unapplied Cash using selection criteria. The customer's transactions are analyzed to determine which ones qualify as Unapplied Cash. For example, you can select all CR transactions that have Object Code 1000 (Unapplied Cash). This pool of selected transactions comprises the net outstanding Unapplied Cash amount. The system applies this amount to outstanding transactions (invoices) using the same auto-payment logic as the CR Summary page. That is, the payment is applied to outstanding balances as if you had entered the payment on the CR Summary page. However, there is no user interaction to override the application of the overpayment to one invoice or another. The system follows the same rules as the CR Summary page does, for example, paying off the oldest charge first. Any modification of the system's application of the overpayment may be done by editing the CR Set after the utility has generated the set.

For the setup, it is common to have the following:

1) Define an object code that represents Unapplied Cash.
2) Define an AR Division of OVER in ARUPCD.
3) Define posting codes and a posting strategy for overpayment records.

Here is a very simple example of how the data and process could flow:

1. Customer X needs to pay AR Invoice-1 for $100. They send a check for $125 and overpay the invoice by $25.

2. In ARBTCRIC, on the summary tab, $100 is applied to AR Invoice-1 and on the Direct Cash tab, the $25 overpay is entered with Hit AR selected and Division OVER, which is the Unapplied Cash object code.

3. Customer X needs to pay AR Invoice-2 for $25.

4. Run ARSPOV.  There are 2 Selection Criteria menus. 
   

   • The first AR selection criteria is used to tell the process who qualifies. Select on Account ID and enter Customer X. Enter the name of the new CR set id, for example CROVER1.

   • The second AR selection criteria menu is used to tell the process which transactions qualify. Select the Unapplied Cash Object code.

5. Submit the job.

6. The result: ARBTCRUB Find Set ID CROVER1. The set will have a record for a positive (+$25) referencing AR Invoice-2 and a record for a negative (-$25) with the Unapplied Cash object to cancel the overpay record.

7. Post the Set.