Reconcile Supplier Payments with the Receipt Journal or from Supplier Ledger Entries

When you send a payment or receive a refund from a supplier, you must decide whether to apply the payment or refund to one or more open entries. You can specify the exact amount that you want to apply to the payment receipt or refund, and then only partially apply supplier ledger entries. You must apply all supplier ledger entries to obtain correct supplier statistics and reports of the account statements and finance charges.

Note

Suppliers may sometimes give a payment refund instead of a CR/Adj note to offset against future invoices, especially when you return items that you have already paid for or when you have overpaid an invoice.

You can apply supplier ledger entries in three different ways:

  • By entering information in dedicated pages, such as the Receipt Journal page and the Payment Reconciliation Journal page.
  • From purchase CR/Adj note documents.
  • From supplier ledger entries after purchase documents are posted but not applied.

Note

If the Application Method field on the supplier card contains Apply to Oldest, then payments will automatically be applied to the oldest open credit entry if you do not manually specify which entry to apply to. If the application method for a customer is Manual, then you must apply entries manually.

You can apply supplier payments manually to their related purchase documents when you post the payments on the Receipt Journal page. For information about filling the receipt journal, see Making Payments.

You can also apply supplier payments, and customer payments, after the payments appear as negative bank transactions in your bank. On the Payment Reconciliation Journal page, you can use functions for bank statement import, automatic application, and bank account reconciliation. For more information, see Reconcile Payments Using Automatic Application.

To apply a payment to a single or multiple supplier ledger entries

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Receipt Journal, and then choose the related link.

  2. On the Receipt Journal page, on the first journal line, enter the relevant information about the payment entry.

  3. To apply a single supplier ledger entry:

    1. In the Applies-to Doc. No. field, choose the field to open the Apply Supplier Entries page.
    2. On the Apply Supplier Entries page, select the entry to apply the payment to.
    3. On the line in the Amount to Apply field, enter the amount to apply to the entry.
  4. Or, to apply multiple supplier ledger entries:

    1. Choose the Apply Entries action.

    2. On the Apply Supplier Entries page, select the lines with the entries to apply the payment to.

    3. Choose the Set Applies-to ID action.

    4. On each line in the Amount to Apply field, enter the amount to apply to the individual entry.

      If you do not enter an amount, then the maximum amount is automatically applied. At the bottom of the Apply Supplier Entries page, you can see the amount in the Applied Amount field, and you can see whether the application balances.

  5. Choose the OK button.

  6. Choose the Post action to post the receipt journal.

To apply a CR/Adj note to a single or multiple supplier ledger entries

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Purchase CR/Adj Note, and then choose the related link.

  2. Open the CR/Adj note that you want to apply.

  3. Enter the relevant information in the header.

  4. To apply a single supplier ledger entry, on the Application FastTab, in the Applies-to Doc. No. field, select the entry to apply the credit to, and then, in the Amount to Apply field, enter the amount to apply to the entry.

  5. Or, to apply multiple supplier ledger entries:

    1. Choose the Apply Entries action.

    2. Select the lines with the entries to apply the CR/Adj note to.

    3. Choose the Set Applies-to ID action.

    4. On each line in the Amount to Apply field, enter the amount to apply to the individual entry.

      If you do not enter an amount, then the maximum amount is automatically applied. At the bottom of the Apply Supplier Entries page, you can see the amount in the Applied Amount field, and you can see whether the application balances.

  6. Choose the OK button.
    The Purchase CR/Adj Note page shows the entry that you have selected in the Applies-to Doc. Type field and the Applies-to Doc. No. field. The page also shows the amount of the CR/Adj Note to be posted, adjusted for any payment discounts.

  7. Choose the Post button to post the purchase CR/Adj note.

To apply posted supplier ledger entries

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Suppliers, and then choose the related link.

  2. Open the relevant supplier with entries that have already been posted.

  3. Choose the Ledger Entries action, and then choose the Apply Entries action.

  4. On the Apply Supplier Entries page, you can see the open entries for the supplier.

  5. Select the line with the entry that will be applied.

  6. Choose the Set Applies-to ID action.

    The Applies-to ID field displays three asterisks if you work in a single-user system or your user ID if you work in a multiuser system.

  7. For each line in the Amount to Apply field, enter the amount to apply to the individual entry.

    If you do not enter an amount, then the maximum amount is automatically applied. You can see the amount in the Applied Amount field at the bottom of the Apply Supplier Entries page.

  8. Choose the Post Application action.

    The Post Application page opens with the document number of the applying entry and the posting date of the entry with the most recent posting date.

  9. Choose the OK button to post the application.

To apply supplier ledger entries in different currencies to one another

If you buy from a supplier in one currency and make payment in another currency, you can still apply the invoice to the payment.

If you apply an entry (Entry 1) in one currency to an entry (Entry 2) in a different currency, the posting date on Entry 1 is used to find the relevant exchange rate to convert amounts on Entry 2. The relevant exchange rate is found on the Currency Exchange Rates page. In that case, you must enable application of supplier ledger entries in different currencies. For more information, see Enable Application of Ledger Entries in Different Currencies

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Receipt Journal, and then choose the related link.
  2. Open the journal you want, and fill in the first empty journal line using a currency code.
  3. Choose the Apply Entries action.
  4. Select the line with the entry you want to apply to the entry in the receipt journal, choose the Set Applies-to ID action, and then select the entry you want to apply to.
  5. Choose the OK button to return to the receipt journal.
  6. Post the receipt journal.

Important

When you apply entries in different currencies to one another, the entries are converted to AUD. Even though the exchange rates for the two relevant currencies are fixed, for example between AUD and EUR, there may be a small residual amount when these foreign-currency amounts are converted to AUD. These small residual amounts are posted as gains and losses to the account specified in the Realised Gains Account or Realised Losses Account field on the Currencies page. The Amount (AUD) field is also adjusted on the relevant supplier ledger entries.

To unapply an application of supplier entries

When you unapply an erroneous application, correcting entries that are identical to the original entry but with opposite sign in the amount field are created and posted for all entries, including all general ledger posting derived from the application, such as payment discount and currency gains/losses. The entries that were closed by the application are reopened.

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Suppliers, and then choose the related link.
  2. Open the relevant supplier card.
  3. Choose the Ledger Entries action.
  4. Select the relevant ledger entry, and then choose the Unapply Entries action.
  5. Alternatively, choose the Detailed Ledger Entry action.
  6. Select the application entry, and then choose the Unapply Entries action.
  7. Fill in the fields in the header, and then choose the Unapply action.

Important

If an entry has been applied by more than one application entry, you must unapply the latest application entry first.

See Also

Payables
Purchasing
Work with Business Central