DBD: Cash Receipts - Restore a Denied Credit Card Invoice

DBD: Cash Receipts - Restore A Denied Credit Card Invoice

Step 1: Determine Your Credit Card GL Account

You will need to first determine the account number that you use to post your credit card entries to the system. Go to Accounts Receivable Terms Code Setup. Call up the Terms code you are using for your Credit Card payments. Please note the GL account number at the bottom of this screen. This is the number you will use during Cash Receipts.

A/R Terms - ARGMCA

Step 2: Create a Zero-Deposit Cash Receipt Batch

1. Create a Cash Receipt batch. This will be a zero deposit.
2. Enter the Customer Code.
3. Enter Check Reference.
4. Enter check amount as $0.00 or RETURN through the field until you are at the Invoice Entry Screen.

Step 3: Reverse the Invoice with a Manual Action

Call up the invoice you have received the notification that the credit card was not accepted. You can then use an Action of Manual and enter the total amount of the Total Applied as a negative number.

Invoice - ARGCAA.21

1. Click OK.
2. FYI Message: Total Applied is Out of Balance. Click OK.
3. Click G/L Adjustment.

Step 4: Select the Credit Card GL Account

At this point, you will select the account number that you have setup in your AR terms code for credit card payments.

Lines Details - GLGJRA.4

Click End.

Step 5: Review the Updated Invoice

After the GL distribution, your invoice will then look like this when you return to this screen.

Invoice - ARGCAA.21 (after GL distribution)

When you update your Cash receipts, the system will post a debit to your Accounts Receivable account and a credit to your Credit Card Clearing account.

In my case, this is a credit to account 120-10-00 (Visa Clearing Acct).

Month End Reconciliation

If you have any of these situations and the customer has not yet paid the invoice by the end of the month, you will need to follow one additional step in your reconciliation process.

You will print out your AR trial Balance normally. In this case, the Print Credit Card Invoices will be answered with a 'N'. Then print this report again and answer this question as 'O' to only print the credit card invoices.

Look at the Cash Receipts Journal Column. This number should match the dollar value of the invoices that you have processed in this manner. You can then take this number and add it to the ending balance of the first AR Trial balance.

Frequently Asked Questions

Q: Why do I need this procedure at all?

A: When you post a credit card invoice into the system, it does not currently make a transaction to show this payment. This procedure posts the invoice back to the open invoice file as open so it reflects the denied payment.

Q: What account number do I use during Cash Receipts?

A: Use the GL account number noted at the bottom of the Accounts Receivable Terms Code Setup screen, for the Terms code you use for Credit Card payments.

Q: How do I enter the reversal on the invoice?

A: Call up the invoice, use an Action of Manual, and enter the total amount of the Total Applied field as a negative number.

Q: What happens when I update Cash Receipts after this process?

A: The system posts a debit to your Accounts Receivable account and a credit to your Credit Card Clearing account.

Q: Does this change how I reconcile at month end?

A: Yes, if the customer hasn't paid the invoice by month end. Print the AR Trial Balance answering Print Credit Card Invoices as 'N', then print it again answering 'O' to show only credit card invoices. The Cash Receipts Journal Column total should match the dollar value of the invoices processed this way, and you add that number to the ending balance of the first AR Trial Balance.

Tags: cash-receipts, credit-card, denied-payment, reconciliation, gl-adjustment, DB-distributor