Partial Reconciliation on Payment on Account

[Former Member]

I am working on SAP Business One 2007 A Patch Level 38:

I understand the usefulness of Partial Reconciliation but am having the following problems when it is used in conjunction with a "Payment on Account". Here is the scenario.

I have a Customer who sends us a payment in advance of $10,800 and we choose to (on the Incoming Payments window) post it as a "Payment on Account". Later, we have an A/R Invoice cut to this customer for $800. I go to the Internal Reconciliation window on the Business Partner and change the "Amount to Reconcile" from the resulting "Payment on Account" row from $10,800 to $800 and press the "Reconcile" button. Unfortunately, SAP automatically takes my remaining $10,000 and posts it to the Miscellaneous Income account. If this was an A/R Credit Memo instead of a Payment on Account, it would have just left the $10,000 open and available on the Business Partner. Can you please explain why SAP is moving this money automatically over to Miscellaneous Income and/or advise how to prevent this? I have tried to use an A/R Down Payment Invoice also and as long as the money was from a "Payment on Account", it takes the difference and posts it to Miscellaneous Income. Currently, my only option I see would be to create a manual journal entry and move money back from the Miscellaneous Income account back onto the Business Partner account - not a preferred method.

Thank you in advance for your reply.

[K_Pauquet · Accepted solution]

Hi Jeff,

what should have happened is that the balance due of the incoming payment was reduced to 10000, I find it strange that a journal posting took place at all since all you did was reconcile an invoice partially with a payment.

You are certain that no adjustment posting took place? Just right-click on the payment & check the reconciled transactions.

All the best,

Kerstin

[Former Member · Accepted solution]

Hello Kerstin,

Thank you for your reply. Yes, I have not created any adjustment at the time of reconciliation but the computer has automatically generated an adjustment for me. To confirm it is the computer that has generated it, there is no means "reversal" checkbox that you get when you create a manual journal entry. In addition, the software automatically fills in the "Remarks" with "Manual Reconciliation Transaction". I agree with what you say that it makes most sense that no journal entry would be created (and that the money would remain with the business partner) - that is the functionality I suppossed would occur. We have a test company here and I have tried this a number of times and, provided I am reconciling against a "Payment on Account", the software automatically generates an "Adjustment". Is it possible there is a setting for this somewhere? Not to impose, does anyone else have a 2007A version (test company) and have this same event occur? Perhaps it is intentionally designed this way . . . but I kind of hope it is not - not convenient.

Thanks in advance for any further reply.

[K_Pauquet · Accepted solution]

Hi Jeff,

this is interesting system behaviour! I checked in a US localisation in pl45 & the only way I could induce the automatic creation of a journal upon reconciliation was by having over/underpayment with an amount exceeding 10000 defined.

Then the application automatically posted the difference to the account defined for over/underpayment.

Could you check that setting in your db (Administration -> System Initialisation -> Document Settings -> per document -> incoming/outgoing payment.)

All the best,

Kerstin

[Former Member · Accepted solution]

Hello Kerstin,

Thank you for your follow up reply - you were correct in that our over/underpayment allowed settings were greater than $10,000. Once I reduced the allowance to $0 this issue did not occur again. It still seems a little unclear that there should be a connection between the Under/Overpayment Amt. Allowed and the automatic creation of a Journal Entry for reconciliation of Payment on Account but perhaps the idea is to save time by having the system automatically move the money over to profit.

My only concern is that if I keep my Under/Overpayment Amt. Allowed at $0, will I be able to accept any payments on Account? I cannot find great documentation on the impact of the Under/Overpayment Amt. setting. I know this is an additional question than I originally posted but thank you for any reply you can provide.

[K_Pauquet · Accepted solution]

Hi Jeff,

the over/underpayment functionality is designed to ease the life of the company accountant. It is meant to facilitate the automatic writing-off of negligible sums, for example if you have an invoice of $100.32 & the customer gives you $100 only. If you have over/underpayment for that amount defined, say 50 cents, then with the incoming payment there is an additional posting to the defined account & the document is fully closed with no balance due. With the new reconciliation engine this also takes place when you internally reconcile. Having significant amounts allowed might thus not be a good idea.

Please see note [1089652|https://service.sap.com/sap/support/notes/1089652] for some more info.

All the best,

Kerstin

[former_member187989]

Thanks steffen.

[former_member187989]

Link invoices to payment this will automatically reconciles ar invoice with advance payment amount.

Hope it will solves problem.

Jeyakanthan

[K_Pauquet]

Hi Jeyakanthan,

the functionality 'Link Invoices to Payment' has been replaced by the new internal reconciliation engine in version 2007.

All the best,

kerstin