Applying Payments to Particular Lines of AR Documents

In many industries, organizations need to manage sales and payments at a granular level—that is, by the individual lines of AR documents.

MYOB Advanced gives you the ability to pay AR documents by individual lines. You can select how you want to apply payments: fully (to the entire document), partially (to a portion of the entire document), or to individual document lines.

Configuration

You can tailor the configuration of this capability to meet your organizational needs, enabling the Payment Application by Line feature in the system and then turning on the ability to pay documents by line individually for the needed customer classes and individual customers.

Entry of Documents That Can be Paid by Line

When you are entering an AR document (invoice or credit memo) that can be paid by line, you either select a customer for which the Pay by Line check box is selected or you select the Pay by Line check box for the document in the Summary area of the Invoices and Memos (AR301000) form. Then you add lines to the AR document on the Details tab, specifying the inventory ID, project task, and cost code (if the Cost Codes feature has been enabled) for each line, as well as any other settings you want to enter or change. The system inserts a line number for each line in the Line Nbr. column, which appeared in the table when you selected the Pay by Line check box for the document.

When paying these documents on the Payments and Applications (AR302000) form, you can select separate lines of the same document in the table on the Documents to Apply tab, or you can add lines from different documents that are associated with the same customer. If a document line has been included in a payment that has not been released yet, that line cannot be included in a different payment. If a document with a payment applied to a document line has been released but the document line has not been fully paid, you can open another payment document (that is, other than the one applied to the document line) and select the document line to pay the remaining balance.

After you release the payment, you can view the unpaid balance of the original document in the Balance box in the Summary area of the Invoices and Memos form.

Credit memo lines can be applied to documents with the Payment, Prepayment, and Refund types on the Documents to Apply tab of the Payments and Applications form.

Credit memos paid by line cannot be directly applied to invoices on the Payments and Applications form. To apply credit memo lines, you should create a payment on this form, and then apply an invoice and credit memo lines to this payment.

On the Documents to Apply tab of the Payments and Applications form, a positive value in the Amount Paid column increases the payment's available balance for the credit memo lines with positive balances; a negative value in this column decreases the payment's available balance for the credit memo lines with negative balances. In a refund, positive credit memo lines decrease the available balance, while negative credit memo lines increase it.

When the system loads documents for applications, positive credit memo lines and negative invoice lines are loaded and processed first because they increase the payment's available balance.

If you reverse applications of the positive credit memo lines, they will be processed in the same way as reversals of credit memos with the Pay by Line check box cleared. If you reverse applications of the negative credit memo lines, the lines will be processed in the same way as reversals of applications for positive invoice lines. The value in the Amount Paid column for reversals is always shown with opposite sign of that used for the original application.

You can also void payments and refunds applied to credit memo lines with the negative sign.

Entry of Lines with a Negative Extended Price

Invoices paid by line can have lines with a negative extended price. You create these invoice lines if you want to correct previously billed amounts in the scope of the next billing without having to create a credit memo. (If there will be no subsequent billing and you want to decrease the billed amount, you can create a credit memo.) For invoices with retainage, the retainage amounts and taxable invoice lines will be calculated by the system based on the value specified in the Ext. Price column on the Details tab of the Invoices and Memos (AR301000) form.

When retainage is released for all lines of the original invoice, including negative lines, the system creates a retainage invoice on the Invoices and Memos form with lines with negative and positive amounts, but the total amount is a positive value.

The system supports cash discounts for AR invoices that have lines with negative amounts.

Application of Payments to Negative Document Lines

The system processes negative amounts in invoice lines in the same way as it processes lines of credit memos.

A payment with only one negative line applied cannot be released. Such a payment should be applied to another positive line of the invoice; that is, the Payment Amount box on the Payments and Applications (AR302000) form should have a value greater than or equal to 0.00.

You should apply payments and credit memos to and release retainage for an invoice or credit memo that can be paid by line—a document with the Pay by Line check box selected on the Invoices and Memos (AR301000) form—even if the total balance or the unreleased retainage of the document is 0.00, but the document lines have a balance or the document has unreleased retainage. (For these documents, the Pay and Release Retainage commands (under Processing) on the More menu of the Invoices and Memos form, as well as the Reference Number selector on the Payments and Applications form are available.)

Documents that can be paid by line cannot have a document balance that is less than 0.00 or greater than the document balance before payment. For example, an invoice has the following lines and a balance of 600:

• Line Nbr.: 1, Ext. Price: –100
• Line Nbr.: 2, Ext. Price: 200
• Line Nbr.: 3, Ext. Price: 500

You cannot pay only Line 2 and Line 3 with a total balance of 700, because in this case the document balance will become negative. Also, you cannot pay Line 1 separately, because in this case the document balance will become 700, which is greater than its amount ($600).

Process Overview

When you create a payment for particular lines of an AR invoice, the process unfolds as follows:

1. On the Invoices and Memos (AR301000) form, you create an invoice, selecting the Pay by Line check box in the Summary area, and then adding multiple lines to this invoice. For details, see To Enter an Invoice with Retainage that Can Be Paid by Line. You then release the invoice.
2. You create a payment on the Payments and Applications (AR302000) form. On this form, you select lines of the invoices associated with the selected customer and pay them in full or partially. If a document line has been included in a payment that has not been released yet, that line cannot be included in a different payment.

   For details, see To Pay Separate Lines of an AR Document (or Multiple Documents).

3. You release the payment; the system assigns the original AR document the Closed status if it has been paid in full (or the document retains the Open balance if it has been paid partially or it is an original invoice with unreleased and unpaid retainage). The system updates the amounts paid in the payment on the Payments and Applications form and the balances of all the lines of the AR document on the Invoices and Memos form.

Limitations

The following limitations apply to the functionality of applying payments to particular lines:

• In MYOB Advanced, users currently cannot apply VAT recalculated on cash discounts to AR documents for which the Pay by Line check box is selected on the Invoices and Memos (AR301000) form.
• Group and document discounts are not supported for AR documents that have the Pay by Line check box selected on the Invoices and Memos form.
• The Reverse and Apply to Memo command (under Corrections) on the More menu of the Invoices and Memos form cannot be used for a document with the Pay by Line check box selected.

  For such a document, you should instead click Reverse (under Corrections) on the More menu and then create an application to a credit memo on the Payments and Applications (AR302000) form.

• An invoice with the Pay by Line check box selected cannot be applied to a credit memo on the Applications tab of the Invoices and Memos form. You should apply this credit memo to document lines on the Payments and Applications form instead.
• The feature is not compatible with migration mode. If the Activate Migration Mode check box is selected in the Posting Settings section on the General tab of the Accounts Receivable Preferences (AR101000) form, the Pay by Line check box on the Invoices and Memos is cleared and unavailable for editing.
• If the Invoice Rounding feature is enabled on the Enable/Disable Features (CS100000) form, the functionality of this feature is not applicable to documents that can be paid by line. That is, amounts in these documents cannot be rounded.
• Calculation of taxes in Avalara is not supported.
• Balance write-off cannot be performed at the line level.
• The remaining balance of a credit memo paid by line cannot be written off on the Write Off Balances and Credits (AR505000) form. You should manually create a debit memo to write off the balance.