Receivables lets you apply on-account credit memos to your customer's open debit items. For example, your customer has a $200 on-account credit memo. You can apply the on-account credit memo to one or more open debit items to either reduce or close the on-account credit memo and your customer's outstanding balance.
Note: Using the Applications button, you can also unapply and reapply credit memos that have already been applied to transactions.
Note: If you use the Transactions Summary window to query a credit memo that has been applied to an invoice, the Applications button is not available.
The Applications button in the Transactions Summary window is used only to apply completed on-account credit memos.
Prerequisites
Navigate to the Transactions Summary window.
Query the on-account credit memo to apply.
Choose Applications.
Select the transaction to which you want to apply this on-account credit memo from the list of values.
Receivables enters the Amount Applied and updates the Unapplied Amount of the on-account credit memo and the Balance Due for this transaction.
The default Amount Applied is the balance due for this transaction, unless the balance due is greater than the amount of this on-account credit. In this case, the default Amount Applied is the unapplied amount of the on-account credit. You can accept this amount or enter a different amount (for example, if you want to apply this on-account credit to more than one transaction).
Note: Receivables uses the transaction type of the debit item to which you are applying credit to validate the application amount:
If the transaction type forces natural application only, then you must enter an application amount which brings the debit item's balance closer to zero.
If the transaction type does not allow overapplication, then you cannot enter an amount that would reverse the sign of the balance of the debit item.
If the transaction type allows overapplication, then you can apply this on-account credit to a closed debit item. To access closed invoices from the Transactions workbench, you must check the Show Closed Invoices check box from the Tools menu.
Note: Receivables also uses the transaction type of the debit item to determine the application rule set for this application.
To apply this on-account credit memo to another transaction, repeat step 4.
When you are satisfied with the application of this on-account credit, save your work. Receivables updates your customer's account balances.
Receivables lets you apply a receipt with an existing on-account credit memo to close one or more of your customer's open debit items. For example, your customer receives goods totaling $500, but they are not satisfied with their purchase. You agree to credit their account $100. When the customer remits payment of $400, you can simultaneously apply this receipt with the on-account credit memo to close both the open invoice and their on-account credit memo.
You can also apply receipts and on-account credits to transactions in different currencies. For example, your functional currency is USD but your German customer has an open invoice in DEM. If the customer remits a partial payment for this invoice in USD, DEM, or EUR (euro), you can combine the receipt and the on-account credit and apply them to the open invoice. Receivables automatically records any gain, loss, or rounding amounts created by the application. See: Cross Currency Receipts.
Navigate to the Receipts or Receipts Summary window.
Query or enter the receipt to apply. See: Entering Receipts.
Choose Apply.
Select the on-account credit memo and the open transaction(s) from the list of values.
Apply the receipt to the on-account credit memo and the open debit item(s). See: Manually Applying Receipts.