MYOB Advanced Training - Finance - Accounts Receivable - Receiving Payments

When you receive a customer payment for the invoice, you create the payment document (see 9 on the diagram below) by using the Payments and Applications form (AR302000). In the payment, you specify the customer account from whom you have received the payment, the payment method and the payment amount. The payment method denotes the actual means of payment: cash, printed cheque, or wire transfer. You can collect customer payments made by a credit card. (Card payments are outside of the scope of this course, however.) In the payment document, you also specify the cash account to which the payment amount should be recorded.

When you are entering the payment, you can specify the documents to which the payment applies and then release the payment and the application at once—that is, complete steps 9 and 13 at the same time.

Processing a Payment

As it is processed, a payment can have the following statuses:

On Hold: The payment is being edited and cannot be released.
Balanced: The payment is ready to be released.
Open: The payment has been released and can be applied to documents, such as invoices and debit memos.
Closed: The full amount of the payment has been applied to a document (or multiple documents).
Voided: The payment has been voided.

If the Hold Documents on Entry box is selected on the Accounts Receivable Preferences form (AR101000), a new payment has the On Hold status by default. When the payment is ready, you must give it the Balanced status (see 10 on the diagram below) so that you can release it. When you release the payment (11), the system assigns it the Open status (which indicates that the payment can be applied to customer documents) and generates the batch to credit the AR account and debit the cash account for the payment. The system also updates the customer balance by this amount. You cannot edit the payment after it has been released, although you can void the payment if it is wrong and enter the correct one (12).

Applying a Payment to an Invoice

An open payment can be applied to customer documents, such as invoices and debit memos. To apply the payment to an invoice (see 13 on the diagram below), you specify the invoice and the amount to apply by using the Payments and Applications form (AR302000). After that, you release the payment application (14) and the system decreases the balances of the invoice and the payment by the application amount. If the payment has been applied within the cash discount period of the invoice, the system also generates the batch to debit the cash discount given expense account and credit the AR account. The invoice appears in the application history of the payment. Once the invoice is settled, it has a balance of zero and becomes closed. The payment becomes closed once the full payment amount is applied to documents. If you have applied the payment to an invoice incorrectly (15), you can reverse the application and reapply the payment to the appropriate invoice.

Auto-application of payments is outside of the scope of this course.