Usually, a receive payment document finalizes your sales process and is a sign of closing a sale. In this case, you can create the receive payment document to clear the liability for an unpaid invoice or to record an advance received before goods or services were provided.
If you create the receive payment to close an open invoice, internal reconciliation takes place - the liability amount is reduced (liability account is credited) and the received amount is recorded in the bank account (bank account is debited).
To create a receive payment for a particular invoice
1.Go to the Invoice under the Sales tab.
2.Open the invoice for which you want to create the receive payment document.
3.The receive payment document can be created in one of the following ways:
- Click the +(picture) button on the toolbar, and then select Receive payment.
- From the sales documents flow, select + Receive payment.
Codejig ERP will copy all the relevant information from the invoice and transfer it to the receive payment. Fields of the receive payment document will be populated from the invoice fields. Still, you can change data in any fields, manually modify the invoice data, add other invoices to be closed, override liability and advance accounts, indicate the purpose for payment.
You can also create a receive payment document for an invoice or multiple invoices from scratch without reference to a particular invoice. If so, all the payment fields are empty and you have to fill them in manually.
To generate the receive payment document for an invoice or multiple invoices from scratch
1.On the Codejig ERP Main menu, click the Banking tab.
2.Under the BANKING tab, click Receive payment.
A listing page of the Receive payment document opens.
3.On the listing page, click + Add new.
A page for providing details of the receive payment document appears.
4.In the payment section, select a relevant type of payment which, in this case, has to be Payment from a customer, select a payer, specify bank accounts into which and from which payments are to be made; set a currency of the payment and indicate payment amount.
5.In the Fees section, specify any fees, if applicable.
6.If you want to close invoices manually, turn on the Match invoices option.
By default, the Match invoices option is turned off. If you keep it turned off, the FIFO (the first in, first out) method is used to close the invoices issued to a selected payer.
Invoice closing according to the FIFO method entails:
The invoices issued to the payer are bulk closed automatically, and the first invoices raised are the first invoices to be closed with a received payment. The whole received payment amount is allocated to the unpaid invoices matching the invoice amount of payment. If the payment amount is insufficient to pay down all the open invoices, some invoices (the last invoices raised) will remain unpaid or partially paid. The remaining unpaid amount will persist as customer liability. If an overpayment is made, the overpaid amount is recorded as a advance from the customer.
7.If you turn on the Match invoices option, you get access to the Open invoices section. In this section, you can add and modify open invoices you want to close or partially close with the received payment amount.
To do that
1.Turn on the Match invoices option.
2.In the Open invoices section, do one of the following:
- To add all open invoices together with their details, select Fill with open invoices and click the Fill button.
- To add invoices manually, click + Add new
In either case, a single or multiple invoices are added as line items. However, if you add all open invoices by clicking the Fill button, all invoice line item fields are auto-completed and you do not have to fill them in manually.
Invoice Line Item Fields
Invoice which you want to close fully or partially.
Once an invoice is selected, all other invoice payment details are auto-completed. However, you can change them, if necessary.
Amount of closed liability
The amount of the liability for the specified unpaid invoice to be closed with the received payment.
The amount of closed liability is calculated as follows:
Amount of closed liability = Amount of payment - Discount amount (if applicable)
An early payment discount in %. It reduces the amount the customer owes you if the customer pays before the due date indicated in the invoice.
- Conditions on which the discount is applicable are retrieved from the net terms specified in the invoice.
- The due date of the invoice and the date of the receive payment document are compared, and if the payment is made within the period for which the early discount is allowed/provided, the discount percentage is displayed in the field.
The amount deducted from what the customer owes you, if they pay before the due date indicated in the invoice.
The discount amount is worked out as:
Discount amount = Amount of payment x Discount %
Amount of payment
Total amount of the invoice after the discount for the invoice is calculated.
After adding an invoice or invoices you want to close, you can view and edit invoice payment details, if required. If your modifications cause any discrepancies between the received amount and the amount of payment, the difference between the amounts is displayed in the Not matched amount field.
The Not matched amount field is not editable and you cannot override it.
If you create the receive payment document from the invoice, the Match invoices option is turned on by default and the section includes the invoice from which the receive payment is being created.
Advanced mode - turn on the advanced mode to view or override the customer accounts for advances and liabilities which are affected by accounting transaction created by the receive payment document.
If a payment is identified as a payment for an open invoice, the receive payment document clears the customer liability by crediting the selected liability account with the received total amount.
If the payment is identified as an advance payment, the advance account is credited with the received total amount. The amount can be also allocated to both accounts if certain residual amount is left after clearing the customer liability.
Use the advanced mode cautiously. Overriding the accounts may distort the sales process or cause significant errors in the system if the mistake is made while altering the accounts.
When you are finished, save and post the receive payment document. The posting will impact the transaction journal, the banking journal and the customers journal. The liability amount will be reduced (liability account will be credited) and the received amount will be recorded in the bank account (bank account will be debited). The open amount for the invoice becomes zero. Thus, the invoice is treated as closed.