You can track your customers' overpayments and short payments as claims.
AutoLockbox can initiate claim creation for eligible remittances. Claim creation, along with claim tracking and resolution, actually occurs in Oracle Trade Management. See: Working with Claims.
You can initiate claim creation:
Manually, when applying receipts in the Applications window or in the QuickCash window. See: Applying Receipts and QuickCash.
Automatically, when importing receipts via AutoLockbox.
This section describes automatic claim creation via AutoLockbox.
Prerequisites
Implement Trade Management. See: Oracle Trade Management Implementation Guide, Oracle Trade Management User Guide, or online help.
Define Lockbox. AutoLockbox reviews imported receipts for possible claim creation only if you select the Evaluate for Claim Eligibility box when defining your lockbox. See: Lockboxes.
Set System Options. If you select the Evaluate for Claim Eligibility box, then AutoLockbox looks at your claims system options to determine which imported receipts are eligible for claim creation. See: Claims System Options.
These system options tell AutoLockbox what to do with both unmatched as well as matched remittance lines.
Define a receivables activity of type Claim Investigation for each combination of receipt class and receipt method.
See: Receivables Activities.
Your claims system options indicate the type of unmatched remittance lines, positive or negative, that AutoLockbox creates claims for.
If an unmatched remittance line is eligible for claim creation, then AutoLockbox creates a non-invoice-related claim by applying the remittance line against the Claim Investigation application type. Trade Management receives the claim when you run Post QuickCash. See: QuickCash.
Note: Unapplied receipt balances are not considered unmatched, and therefore do not cause claim creation.
For each claim, AutoLockbox copies the following items to the claim investigation line:
The customer's reason for the payment discrepancy, copied to the Customer Reason column.
Customer comments about this payment, copied to the Customer Reference column. If comments do not exist and the customer-provided matching number could not be matched, then this column holds the invalid matching number.
Receivables also retains invalid matching numbers in the Application Notes field. See: Receipts Field Reference.
If the remittance line is not eligible for claim creation, then AutoLockbox handles the receipt according to the lockbox setting for Invalid Transaction Number Handling. See: Lockboxes.
When evaluating an unmatched remittance line for claim creation, AutoLockbox always assumes that the currency of the line matches that of the receipt header.
Your claims system options also indicate whether or not AutoLockbox should create claims for matched remittance lines.
You can set up your system so that AutoLockbox considers all matched remittance lines for possible claim creation. Or, you can choose to exclude short payments of credit memos from consideration.
AutoLockbox evaluates matched remittance lines for claim creation by reviewing each remittance line's matched transaction. AutoLockbox creates a claim if:
The amount of the remittance line is less than the balance due on the matched transaction.
The application violates the Natural Application or Overapplication setting on the matched transaction's transaction type.
Note: The Natural Application Only and Allow Overapplication settings are mutually exclusive. You must select a setting before AutoLockbox can create claims.
Natural application refers to the type of application, either positive or negative, that brings a transaction's balance closer to zero. See: Transaction Types.
The AutoLockbox validation program confirms that imported remittance lines do not violate their matched transactions' Natural Application rule. If a violation does occur, then AutoLockbox reassigns the remittance line to the Claim Investigation application type.
For example, an invoice has a positive balance and is assigned a transaction type with the Natural Application Only box selected. You can apply only a negative application to this invoice.
If, however, AutoLockbox matches a remittance line to this invoice that actually increases the invoice balance, then the validation program will update the remittance line to a Claim Investigation application.
Note: AutoLockbox copies the original matched transaction number to the Application Notes for the receipt as well as to the Customer Reference column on the claim investigation line.
Overapplication occurs when you apply a $500 receipt, for example, to a $400 invoice. This application overapplies the invoice and reverses the invoice's sign (from positive to negative).
You can set the Allow Overapplication setting on a transaction type to disallow overapplication. See: Transaction Types.
If an application would violate its matched transaction's Allow Overapplication setting, then AutoLockbox marks the remittance line with an Overapplication Indicator. After you import receipts, you can optionally correct the overapplication in the QuickCash window before you run Post QuickCash.
If the overapplication violation still exists when you run Post QuickCash, then Post QuickCash fully applies the transaction, and creates a claim investigation line for the overpayment amount.
Note: If the AR: Allow Overapplication in Lockbox profile option is No, yet the Evaluate for Claims Eligibility box is selected, then AutoLockbox will allow remittance lines that overapply their matched transactions into QuickCash, but only for overapplication violations.