The IDI platform default method applies payments first to overdue balances according to the Invoice Category sequence as set up in the customer's Accounts Receivable Group Details. If the payment amount is more than the total of overdue balances, the remainder of the payment amount is allocated to the current balance.
Example
With this method, if a customer has two overdue invoices with the same three Invoice Categories, the payment is applied to the Invoice Category with a sequence of (1) first on the oldest Invoice Number. The remaining amount of the payment is then applied to the Invoice Category with a sequence of "1" on the second oldest Invoice Number. If any amount remains of the payment, it is applied to the Invoice Category with a sequence of "2" on the oldest Invoice Number.
Assumptions
Accounts Receivable Group Details | ||
Invoice Category | Sequence | |
Basic | 1 | |
Toll | 2 | |
Non-Basic | 3 | |
Balances (Invoice # 1111, 2222 are overdue.) | |||
Invoice # | Invoice Category | Amount | |
1111 | Basic | $15.00 | |
1111 | Toll | $10.00 | |
1111 | Non-Basic | $12.00 | |
2222 | Basic | $15.00 | |
2222 | Toll | $20.00 | |
2222 | Non-Basic | $13.00 | |
3333 | Basic | $15.00 | |
The customer has made a $95.00 payment.
Allocation
Since the customer's Accounts Receivable Group's allocation method is Invoice Category then Invoice number, the allocation order would be as follows.
Payment Allocation Order | Invoice # | Invoice Category | Invoice Category Sequence | Amount |
1 | 1111 | Basic | 1 | $15.00 |
2 | 2222 | Basic | 1 | $15.00 |
3 | 1111 | Toll | 2 | $10.00 |
4 | 2222 | Toll | 2 | $20.00 |
5 | 1111 | Non-Basic | 3 | $12.00 |
6 | 2222 | Non-Basic | 3 | $13.00 |
7 | 3333 | Basic | 1 | $10.00 |
Notice that the allocation covers all overdue amounts for the Invoice Category that has a sequence number of "1" for all overdue invoices before allocating payments to other overdue Invoice Categories in the oldest invoice. Also, if the payment amount is larger than the total overdue amount, the remaining payment is allocated to the current balance based on the Invoice Category sequence number.