Settle remainder

You can settle the amount remaining from settlement activity by applying that amount to a ledger account or another customer. You can settle the remainder when you are settling amounts entered into a journal or when you are only settling open transactions.

Setting up defaults

You must enable the Settle remainder feature and set up the default settings before you use Settle remainder.

1. Click Accounts receivable > Parameters > Settlements or Accounts payable > Parameters > Settlements.
2. Select the Settlement tab and click Enable settle remainder.
3. In Default reason code, select a default reason code. The reason codes must already be set up in Accounts receivable > Setup > Customer write-off reason codes or Accounts payable > Setup > Vendor write-off reason codes. The Default settle remainder account defaults to the account assigned to the write-off reason code.
4. Update the Default settle remainder account as needed.
5. In the Default journal name, select a payment journal that you want to use if you want to create a payment journal when you only settle open transactions. If you enable the settle remainder feature, you must add a default journal name.

Settle remainder from a journal

If you don't enable the Settle remainder feature, you can still enter a transaction in a journal and then settle transactions against it as you did in the past. When you select OK, the open balance on the invoice is reduced by the cash amount. If the cash doesn't fully settle the invoice, the invoice remains open with a remaining amount to settle later.

When you enable the Settle remainder feature, you can settle the remaining amount to a ledger account. You can also transfer the remainder to another customer account (for customer transactions) or another vendor (for vendor transactions) instead of leaving the invoices open.

To settle the remainder from the Settlement page, perform the following steps:

1. On the Settlement page, select the invoices or transactions that you want to settle.
2. Select the Settle remainder button.
3. A dialog box appears, showing the amount that settles against a ledger account, the date that settles the remainder, the default reason code from the parameters, and the default account from the parameters.
4. Select a new settlement reason if you want to change the default reason. The settlement account changes to the account associated with the reason code.
5. Edit the settlement account if you want to change it.
6. If you're settling customer transactions and you want to move the remainder to another customer, select a customer in the Settle remainder against customer account. If you're settling vendor transactions and you want to move the remainder to another vendor, select a vendor in the Settle remainder against vendor account.
7. Select Settle remainder.
8. The Journal page appears. An extra journal line is added to the journal with the settle remainder amount as the amount and with the settlement remainder account as the offset account. If you added a customer or vendor so that you can move the settlement amount to another customer or vendor, an extra line is added to the journal to move the settlement amount to that customer or vendor.

When you post the journal, the open transaction is fully settled.

Settle remainder when settling only open transactions

You can settle the remainder when you settle open transactions without a journal.

To settle the remainder, perform the following steps:

1. On the Settlement page, select the invoices or transactions that you want to settle.
2. Select Settle remainder.
3. A dialog box appears, showing the amount that settles against a ledger account, the date that settles the remainder, the default reason code from the parameters, and the default account from the parameters.
4. Select a new settlement reason if you want to change the default reason. The settlement account changes to the account associated with the reason code.
5. Edit the settlement account if you want to change it.
6. If you're settling customer transactions and you want the remainder to move to another customer, select a customer in the Settle remainder against customer account. If you're settling vendor transactions and you want the remainder to move to another vendor, select a vendor in the Settle remainder against vendor account.
7. Choose whether to create a payment journal with the settlement remainder or just post it without a journal. Select Yes for Edit in journal to create a payment journal. You can edit the payment journal that you create.
8. Select Settle remainder. If you chose to create a journal, the button changes to Create journal. Select Create journal instead.
9. If you created a payment journal, the journal page opens after you select Settle remainder. A journal line is added to the journal with the settle remainder amount as the amount and with the settlement remainder account as the offset account. If you added a customer or vendor so that you can move the settlement amount to another customer or vendor, an additional line is added to the journal to move the settlement amount to that customer or vendor.