AutoLockbox uses several methods to determine the customer for receipts that you import into Receivables. Depending upon your transmission format and how you set up your system, AutoLockbox can validate your customer data based on the following attributes or, if no match is found, import the receipt and assign it a status of Unidentified.
If you provide a customer number for receipts that you import through AutoLockbox, Receivables will try to apply the receipts using whatever application information is provided in your transmission format.
The MICR (Magnetic Ink Character Recognition) number that appears on each receipt relates your customer to a bank. Lockbox only uses MICR numbers to associate a customer with a receipt if both of the following are true:
the customer number is not included in the transmission
the MICR number is included in the transmission
An MICR number consists of two segments. The first segment is the transit routing number that is part of your Lockbox transmission format; this identifies the bank from which your customer draws their check. The second segment identifies your customer's account at that bank. Enter the transit routing number in the Bank Branch Number of the Banks window. Enter the customer account number in the Bank Account Number field of the Bank Accounts window.
Note: If a receipt is imported with a new MICR number, but AutoLockbox was able to identify the customer using another method, Receivables stores the new number for future reference.
If the customer cannot be identified from either the MICR number or the customer number (for example, if the transmission does not include this information), you can use AutoAssociate to determine the customer using matching numbers. A matching number can be a transaction number, balance forward bill number, sales order number, purchase order number or another, custom defined number. Your customer's remittance advice in the bank file must include matching numbers for Receivables to identify the customer using this method.
To use AutoAssociate:
Check the AutoAssociate box when defining your Lockbox (Lockboxes window)
Ensure that all invoices to which any single receipt will be applied belong to the same customer
Ensure that the matching numbers within your transmission are unique
If the MICR number or customer number is not included with a receipt record and AutoAssociate is set to No, Lockbox imports the receipt and assigns it a status of Unidentified. You can use the Receipts or Applications window to assign customers to unidentified receipts.
The AutoLockbox validation program will identify a customer for a receipt using the matching number only if all of the transactions listed to be paid by this receipt are associated with the same customer.
If a unique customer cannot be determined, AutoLockbox imports the receipt and assigns it a status of Unidentified.
If a unique customer cannot be determined and duplicate invoices are supplied as the matching number for a receipt, AutoLockbox does not validate the receipt because it cannot determine how to apply the receipt
You can use the validation section of the Lockbox Processing Report to examine transactions that AutoLockbox could not apply to because the customer could not be uniquely identified. See: Lockbox Execution Report.
The table below shows examples of three separate AutoLockbox transmissions that include duplicate invoice numbers. Assume that in each transmission, AutoAssociate is set to Yes, the remitting customer is Customer ABC, and the receipt information includes the invoice number but not the customer name:
| Receipt Information | Invoice Number - Customer | Identify Customer? | Apply Receipt? |
|---|---|---|---|
| Invoice 101 | 101 - Customer ABC 102 - Customer ABC | Yes | Yes |
| Invoice 101 | 101 - Customer ABC 101 - Customer ABC | Yes | No |
| Invoice 101 | 101 - Customer ABC 101 - Customer XYZ (related to Customer ABC) | Yes | Yes |
| Invoice 101 | 101 - Customer ABC 101 - Customer XYZ | No | No |
In the second example, Lockbox is able to identify the receipt because the invoices belong to the same customer. However, since the invoices have the same number, Lockbox cannot determine to which invoice to apply the receipt, so the receipt is left 'Unapplied'.
Note: Depending on your setup, Lockbox might create a claim for an unmatched remittance.
In the third example, Customer XYZ is related to Customer ABC and there are two invoices with the same invoice number. In this case, Lockbox will apply the receipt to the invoice that belongs to the remitting customer (Customer ABC) if the receipt record includes the customer or MICR number; otherwise, Lockbox assigns the receipt a status of Unidentified.
In the last example, two invoices with the same number exist for two different customers. Lockbox does not validate the receipt because it cannot determine how to apply the receipt. You can review receipts that failed the validation step in the Lockbox Execution Report. See: Lockbox Execution Report.
Receivables also lets you track receipts for each of your customer's billing locations. To use this feature, you must include a billing location in your transmission format and ensure that the system option Require Billing Location for Receipts is set to Yes. Additionally, if you set this system option to Yes, Post QuickCash will create unidentified receipts for payments that do not have billing locations. If Require Billing Location for Receipts is Yes at the system options level, you should also set this option to Yes when defining your Lockboxes; otherwise, Receivables displays an error when you submit AutoLockbox. For more information, see: Miscellaneous System Options.