How to: Reconcile Customer Payments Manually

When you receive a cash receipt from a customer or you make a cash refund to a customer, you must decide whether to apply the payment or refund to one or more open debit or credit entries. You can specify the exact amount you want to apply. For example, you may only want to apply part of the payment and thereby only partly apply customer ledger entries. It is important at some stage to close (apply) all customer ledger entries in order to obtain correct customer statistics and printouts of the account statements and finance charges.

You can apply customer ledger entries in three different ways:

By entering information in dedicated windows, such as the Cash Receipt Journal window and the Payment Reconciliation Journal window.
From sales credit memo documents.
From customer ledger entries after sales documents are posted but not applied.

Note: If the Application Method field on the customer card contains Apply to Oldest, then payments will automatically be applied to the oldest open credit entry if you do not manually specify which entry to apply to. If the application method for a customer is Manual, then you must apply entries manually.

You can apply customer payments manually in the Cash Receipt Journal window. A cash receipt journal is a type of general journal, so you can use it to post transactions to general ledger, bank, customer, vendor, and fixed assets accounts. You can apply the payment to one or more debit entries when you post the payment, or you can apply from the posted entries later.

You can also apply customer payments, and vendor payments, in the Payment Reconciliation Journal window using functions for bank statement import, automatic application, and bank account reconciliation. For more information, see Reconcile Payments Using Automatic Application. Alternatively, you can reconcile customer payments based on a list of unpaid sales documents in the Payment Registration window. For more information, see How to: Reconcile Customer Payments From a List of Unpaid Sales Documents.

To fill and post a cash receipt journal

In the top right corner, choose the Search for Page or Report icon, enter Cash Receipt Journal, and then choose the related link.
Select the relevant batch in the Batch Name field.
Fill in the Posting Date field.
In the Document Type field, select Payment.

The Document No. field is filled by the number series assigned to the batch.
Use the External Document No. field to store an identifier, such as the customer's check number.
In the Account Type field, select Customer.
In the Account No. field, select the relevant G/L account.
If you want to post the application at the same time as you post the journal, do one of the following.
In the Balancing Account Type field, select G/L Account for cash payments, and Bank Account for other payments.
In the Balancing Account No. field, select the cash account for cash payments, or the relevant bank account for other payments.
Post the journal.

To apply a payment to a single customer ledger entry

In the top right corner, choose the Search for Page or Report icon, enter Cash Receipt Journal and choose the related link.
On the first journal line, enter the relevant information about the entry to be applied.
In the Document Type field, enter Payment.
In the Account Type field, enter Customer.
In the Bal. Account Type field, enter Bank Account.
In the Applies-to Doc. No. field, choose the field to open the Apply Customer Entries window.
In the Apply Customer Entries window, select the entry to apply the payment to.
In the Amount to Apply field, enter the amount you want to apply to the entry. If you do not enter an amount, the maximum amount is applied.

At the bottom of the Apply Customer Entries window, you can see the specific amount in the Applied Amount field and also whether the application balances.
Choose the OK button. The Cash Receipt Journal window now shows the entry you have selected entered in the Applies-to Doc. Type and Applies-to Doc. No. fields.
Post the cash receipt journal.

To apply a payment to multiple customer ledger entries

In the top right corner, choose the Search for Page or Report icon, enter Cash Receipt Journal, and choose the related link.
On the first journal line, enter the relevant information about the entry to be applied.
In the Document Type field, enter Payment.
In the Account Type field, enter Customer.
In the Bal. Account Type field, enter Bank Account.
In the Amount field, enter the full payment as a negative amount.
To apply the payment to multiple customer ledger entries when posting, choose the Apply Entries action.
Select the lines with the entries that you want the applying entry to be applied to, and then choose the Set Applies-to ID action.
On each line, in the Amount to Apply field, enter the amount you want to apply to the individual entry. If you do not enter an amount, the maximum amount is applied.

At the bottom of the Apply Customer Entries window, you can see the specific amount in the Applied Amount field and also whether the application balances.
Choose the OK button.
Post the cash receipt journal.

To apply a credit memo to a single customer ledger entry

In the top right corner, choose the Search for Page or Report icon, enter Sales Credit Memos, and choose the related link.
Open the relevant sales credit memo.
To apply the credit memo to a single customer ledger entry when posting, in the Applies-to Doc. No. field, select the entry to which you want to apply the payment.
On the line in the Amount to Apply field, enter the amount you want to apply to the entry.

If you do not enter an amount, the program automatically applies the maximum amount. At the bottom of the Apply Customer Entries window, you can see the specific amount in the Applied Amount field and also whether the application balances.
Choose the OK button. The Sales Credit Memo window now shows the entry you have selected entered in the Applies-to Doc. Type and Applies-to Doc. No. fields. And the amount of the credit memo to be posted, adjusted for any possible payment discounts.
Post the credit memo.

To apply a credit memo to multiple customer ledger entries

In the top right corner, choose the Search for Page or Report icon, enter Sales Credit Memos, and choose the related link.
Open the relevant sales credit memo.
To apply the credit memo to multiple customer ledger entries when posting, choose the Apply Entries action.
Select the lines with the entries that you want the applying entry to be applied to, and then choose the Set Applies-to ID action.
On each line, in the Amount to Apply field, enter the amount you want to apply to the individual entry. If you do not enter an amount, the maximum amount is applied.

At the bottom of the Apply Customer Entries window, you can see the specific amount in the Applied Amount field and also whether the application balances.
Choose the OK button. The Sales Credit Memo window now shows the amount of the credit memo to be posted, adjusted for any possible payment discounts.
Post the credit memo.

To apply posted customer ledger entries

In the top right corner, choose the Search for Page or Report icon, enter Customers, and choose the related link.
Open the customer card for the customer with entries that you want to apply.
Choose the Ledger Entries action, and then select the line with the entry that will be the applying entry.
Choose the Apply Entries action. The Apply Customer Entries window opens showing the open entries for the customer.
Select the lines with the entries that you want the applying entry to be applied to, and then choose the Set Applies-to ID. action.
For each line in the Amount to Apply field, enter the amount you want to apply to the individual entry. If you do not enter an amount, the maximum amount is applied.

At the bottom of the Apply Customer Entries window, you can see the specific amount in the Applied Amount field.
Choose the Post Application action. The Post Application window appears with the document number of the applying entry and the posting date of the entry with the most recent posting date.
Choose the OK button to post the application.

If the posted application has resulted in closed customer ledger entries, the Open field is cleared for these ledger entries.
To see the ledger entries, in the top right corner, choose the Search for Page or Report icon, enter Customers, and choose the related link. Browse to the card for the relevant customer to see the ledger entries.

On the ledger entry list, on the line that contains the ledger entry that was fully applied to, you can see that the Open check box is not selected.

Note: After you have selected an entry from the Apply Customer Entries window, or several entries by setting the Applies-to ID, the Applied Amount field on the journal line will contain the sum of the remaining amounts for the posted entries you have selected, unless the field contains something already. If you select Apply to Oldest in the Application Method field on the customer card, the application occurs automatically.

To apply customer ledger entries in different currencies to one another

If you sell to a customer in one currency and receive payment in another currency, you can still apply the invoice to the payment.

If you apply an entry (Entry 1) in one currency to an entry (Entry 2) in a different currency, the posting date on Entry 1 is used to find the relevant exchange rate to convert amounts on Entry 2. The relevant exchange rate is found in the Currency Exchange Rates window.

Applying customer ledger entries in different currencies must be enabled. For more information, see How to: Enable Application of Ledger Entries in Different Currencies.

In the top right corner, choose the Search for Page or Report icon, enter Cash Receipts Journal, and choose the related link.
Open the journal you want, and fill the first empty journal line using a currency code.
Choose the Apply Entries action.
Select the line with the entry you want to apply to the entry in the cash receipt journal, choose the Set Applies-to ID action, and then select the entry you want to apply to.
Choose the OK button to return to the cash receipt journal.
Post the sales journal.

Important: When you apply entries in different currencies to one another, the entries are converted to USD. Even though the exchange rates for the two relevant currencies are fixed, for example between USD and EUR, there may be a small residual amount when these foreign-currency amounts are converted to USD. These small residual amounts are posted as gains and losses to the account specified in the Realized Gains Account or Realized Losses Account field in the Currencies window. The Amount (USD) field is also adjusted on the relevant vendor ledger entries.

To unapply an application of customer entries

When you unapply an erroneous application, correcting entries that are identical to the original entry but with opposite sign in the amount field are created and posted for all entries, including all general ledger posting derived from the application, such as payment discount and currency gains/losses. The entries that were closed by the application are reopened.

In the top right corner, choose the Search for Page or Report icon, enter Customers, and then choose the related link.
Open the relevant customer card.
Choose the Ledger Entries action.
Select the relevant ledger entry, and then choose the Unapply Entries action.
Alternatively, choose the Detailed Ledger Entry action.
Select the application entry, and then choose the Unapply Entries action.
Fill in the fields in the header, and then choose the Unapply action.

Important: If an entry has been applied by more than one application entry, you must unapply the latest application entry first.