Go through the following exercise to post cash receipts resulting from a customer invoice.
Select Receivables > Cash Receipts from the Accounting Node menu bar.
<Tab> to accept the current date as the Date for the cash receipts.
<Tab> to accept checking account 1 as the Deposit Account.
Click New Check.
Enter DCH<Tab> for the Customer.
Enter 4713<Tab> for the Check Number.
Enter 256.85<Tab> for the Check Amount.
The Distribute Check dialog box now shows the entire Check Amount as Remaining to Be Distributed.
Click New.
Enter 7843<Tab> for the Invoice in the Pay Invoice dialog box.
This Payment is automatically filled in with the amount required to pay the selected invoice in full. This amount matches what the customer is paying, so just <Tab> to accept the payment.
Click OK to close the Pay Invoice dialog box. The Distribute Check dialog box now lists the invoice we marked as being paid and the amount Remaining to Be Distributed is reduced by the amount of the invoice. Notice that the Finished button is gray and not available to you.
Click New again, so we can enter the next invoice on the voucher.
Enter 7842<Tab> for the Invoice number. The customer is using a credit that we issued to them for 17.43. This Payment shows –17.43 for the payment amount. This is correct. Press <Tab> to accept the amount and close the Pay Invoice dialog box by selecting OK.
The last invoice to be paid is number 7844. Go ahead and pay that invoice in full, as we did with the other two.
Notice that when you return to the Distribute Check dialog box, Remaining to Be Distributed is now zero. Also notice that the Finished button is now available.
DO NOT click the Finished button.
Click Cancel to start the process over for the next example. The Cancel button is usually used for situations when either the operator entering cash receipts, or the customer who prepared the check voucher, made a mistake and more time is needed to study the errors. Our purpose in using it here is to avoid having to reset the tutorial for the next example.
The example we have just done is what happens when everything goes right and the customer provides correct information. For this example, we will process the same invoices with a few wrinkles. The customer is taking early payment discounts and has not provided us with all of the information that we need to process the cash receipts.
Select New Check on the Cash Receipts window.
Enter DCH<Tab> for the Customer.
Enter 2719<Tab> for the Check Number.
Enter 251.63<Tab> for the Check Amount.
The Distribute Check dialog box now shows the entire Check Amount as Remaining to Be Distributed.
Click New.
Enter 7843<Tab> for the Invoice number in the Pay Invoice dialog box.
This Payment is automatically filled in with the amount required to pay the selected invoice in full. The customer has indicated that they are taking an early payment discount of $1.03 and are making a payment of $53.09.
Enter 53.09 <Tab> for the payment amount.
The Pay Invoice dialog box now shows the payment and a balance on the invoice of $1.03. Before we allow the discount, we want to make sure it is valid.
Another use for the discount field is to get rid of trivial over or under payments by the customer. If the customer over pays or under pays by a few cents, the difference can be treated as a positive (underpayment) or negative (overpayment) discount.
Look at the Payment Terms information on the right side of the dialog box. Notice that the customer was offered a discount of $1.03, but the discount period has expired. We could decide not to allow the discount and move on, leaving the invoice open for $1.03. In this case; however, we will allow the incorrect discount. Use the mouse to click on the Discount: prompt.
Enter 1.03<Tab> for the discount amount.
The Discount Account will be filled in with the account number 4100 as the default. The program took this account number from the GL Cross Reference that we set up in the Control Files.
Press <Tab> to accept the default Discount Account.
Click OK to close the Pay Invoice dialog box. The Distribute Check dialog box now lists the invoice we marked as being paid and the amount Remaining to Be Distributed is now $198.54.
Click New again so we can enter the next invoice on the voucher.
In this case, the customer did not identify the second invoice by number on the voucher. They simply put Credit -17.43.
Click Search on the Pay Invoice dialog box. The system will display a list of all of the invoices that were open for the customer at the time we started this cash receipt entry session. Look at the list and find the credit invoice for –17.43.
double-click the line that shows the credit invoice we want to pay.
This Payment shows –17.43 for the payment amount. This is correct. Press <Tab> to accept the amount and close the Pay Invoice dialog box by selecting the OK button.
Notice that the amount Remaining to Be Distributed has increased to $215.97.
The last invoice to be paid is number 7844. Make a payment of $215.97 to this invoice and post a discount of $4.19.
Notice that when you return to the Distribute Check dialog box, Remaining to Be Distributed is now zero. Also notice, that the Finished button is now available.
Click Finished to accept the distribution of the check. The Cash Receipts dialog now shows our check listed. If we had other checks to process, we would continue by clicking New Check again.
NOTE: Posting cash receipts is not difficult, but it does require attention to detail. In order for the program to make certain that errors are not made, it will not let you exit the distribution process until all of the money received on the check has been distributed. This sometimes causes the operators to stop worrying about how to post the entries correctly, and start ‘trying to get out of the program’ by posting fictitious entries. That is when the real trouble starts. Don’t “lie” to the system. When entering a check amount, enter the exact amount on the check. Do not try to modify it for special circumstances or adjust for errors made by the customer. Don’t enter discounts unless you really intend to give a discount to the customer. Only use the discount on cash receipts for early payment discounts. If you use the discount field to post credits to the customer for incorrect items, you will pay commissions as if the customer had paid those invoices in full. It is acceptable to give the customer small discounts for situations when they pay a few cents short on an invoice. You can also give a negative discount if they overpay an invoice by a few cents.