Allocating Received Payments

Background

When payments have been received from companies in respect of their invoices, the next step of the invoice settlement process is to apply, or allocate, the payment toward open invoices.

Depending on the amount of the payment, the number of open invoices, and/or instructions from the client, you may allocate the payment to one or more open invoices.
By way of a reminder, an open invoice, is one where there is still an outstanding (i.e. not paid) amount. A client's Current Debt is the sum of amounts outstanding on all the client's invoices.

 

Allocating payments can thus conceptually be seen as the process by which funds received, but not yet used, from the client, "Unallocated Payments" are used to pay down "settle" the client's Current Debt.



Prerequisites

Ensure that you have logged onto strokeone, and have opened the detailed layout of the company with Unallocated Payments you wish to allocate.

 

Note: In order to allocate received payments, the following balances must be positive:-

 

Procedure

  1. Ensure that you have selected the Invoices tab
  2. Within the Payments pane, identify a payment record which has a positive Remaining Balance .
  3. Press the Select button for the record identified in step 2)
    (Note: if you have multiple payments with a remaining balance, you can only allocate one at a time)

  4. Next, in the Open Invoices pane, identify an invoice with an outstanding balance, that you wish to allocate the selected payment toward.
  5. There are two methods of applying the payment to the Outstanding Amount. You can either specify the amount to allocate, or you can automatically allocate the lower of the payment remaining amount, or the outstanding amount of the Invoice.

    If you wish to specify the amount, proceed to step 6); to automatically allocate, proceed to step 8)

  6. To specify the amount
    1. Click the Apply button for the invoice identified in step 4)


    1. The Payment Amount dialogue appears.

      Note: how the dialogue verbiage refers to the outstanding amount of the invoice selected in 6a) (GBP 528in this example) and the Remaining Amount of the Payment selected in step 3) that can be allocated towards it (GBP510) in this example
    1. Enter the amount of money from the Remaining Amount that you wish to allocate.

      and click OK.
    2. The following updates occur:-
      1. The Outstanding Amount of the invoice is credited by the amount specified in step 6c)
      2. The paid status of the invoice is updated:-
        If Outstanding amount = zero, set as Green (completed), if >0, set as Amber (In Progress)
      3. The Used Amount on the Payment is also credited by the amount specified in step 6c
      4. The allocated status on the payment is updated:-
        If Remaining amount = zero, set as Green (completed), if >0, set as Amber (In Progress)
      5. The Remaining Amount on the Payment is recalculated as Paid minus Used
      6. The company's Current Debt is recalculated as @sum of Outstanding Amounts.
      7. The company's Unallocated Amount is recalculated as @sum of Remaining Amounts
      8. The company's Balance Outstanding is recalculated as Current Debt minus Unallocated.

Click for an example

 

  1. If you still have a remaining balance on the selected payment and wish to specify an amount of this to allocate towards any outstanding invoice amounts, repeat steps 4) to 6)
  2. To automatically allocate the maximum amount of a received payment against an invoice Outstanding Amount:-
    1. Click the Apply All button for the invoice identified in step 4)

    2. strokeone determines the maximum amount of the remaining payment that is needed to pay-down the outstanding invoice amount.
      1. Set "payment allocation amount" by calculating the min of (Outstanding, Remaining Amount)
      2. The Outstanding Amount of the invoice is credited by payment allocation amount
      3. The paid status of the invoice is updated:-
        If Outstanding amount = zero, set as Green (completed), if >0, set as Amber (In Progress)
      4. The Used Amount on the Payment is also credited by payment allocation amount
      5. The allocated status on the payment is updated:-
        If Remaining amount = zero, set as Green (completed), if >0, set as Amber (In Progress)
      6. The Remaining Amount on the Payment is recalculated as Paid minus Used
      7. The company's Current Debt is recalculated as @sum of Outstanding Amounts.
      8. The company's Unallocated Amount is recalculated as @sum of Remaining Amounts
      9. The company's Balance Outstanding is recalculated as Current Debt minus Unallocated.

 

  1. Continue to allocate Payments until either the Unallocated Payment amount is zero, or Current Debt Amount is zero.

 

 

Related Topics

Company Detail Invoice Tab

Recording Payments Received from Companies