Search the user guide:

glossary
Contents

See also:
Feature Guide - Clients & Billing (3.40MB)

• Helpful?
• 0356 Yes
• 0356 No

Client Payments should be added when you receive the client's check.

You’ll track your cash better, since deposits will be accounted for faster. Client payments are applied to unpaid invoices. When the payment is posted, the invoices will appear as paid.

Client payments should always be proofed before being posted. The client payments proof list shows the payments you’ve added, letting you check for errors. Once a client payment is posted, it can’t be changed, unless the payment is unposted. Proofing avoids these time-consuming fixes.

To add a client payment

1 Click the add button, or choose Edit > Add Client Payment.

The Add Client Payment window opens.



2 Follow the steps to add a client payment.

Client number Most payments are added for only one client. The client number links this payment with the client’s unpaid invoices. Tabbing past the client number displays the client’s account balance.

To split the payment between several clients, click on the Split Payment option. This is useful if a large corporation sends one payment for several of its divisions (which are each set up as separate clients).

Payment type A client payment is added as either a payment, a write-off, a retainer/deposit/advance, or as a user-defined type (by checking the last bullet).  When printing client payment reports, payments will be categorized under these types on the reports.  However, they serve different functions as well:

Payment:  Typical client payment via check or electronic payment where the amount is applied against a list of open invoices for this client.  Debit the cash account.

Write-off:  Works just like a Payment except, instead of a debit to the cash account, a debit will be entered to a write-off expense account or to an allowance account (if one is used).

User-defined payment:  Works just like a Payment.  After choosing this, enter text into the field to the right to define it.  Choose which account to debit according to what kind of payment this is.  If it involves depositing cash, then debit the cash account, if not, then choose a different dGL account accordingly.

Retainer/deposit/advance:  These are NOT applied against a list of open invoices for this client, rather they are added to the client’s retainer balance (the retainer balance in turn can be applied against future unposted A/R invoices for this client). The cGL to the right of this type is the retainer liability account.  A retainer balance can also be added to a client by adding a Retainer Billing in A/R.  A Retainer client payment is NOT used to pay Retainer Billings, rather use a Payment type for that purpose.  Retainer client payments are used to establish a retainer balance for a client when a Retainer Billing has NOT been used.

If you use the auto-allocate option and the client’s balance was paid in full, all of its invoices will be paid off automatically. The auto-allocate option applies the payment amount to the client’s oldest invoices first, then works forward. The actual amounts applied to invoices can be modified before the payment’s distribution is saved.  The distribution (list of open invoices) is presented after clicking Save on this screen.

Since retainers/deposits/advances aren’t applied here to unpaid invoices, you’ll need to enter a credit G/L account (e.g., client retainers/deposits).

Payment amount Enter the payment amount, less any discount. This amount is entered from the client’s check. It is the amount the client has paid for their invoices. A client payment can be for more or less than their unpaid balance. If the client is overpaying their account, the full amount should be applied to an invoice -- giving it a credit balance. (This credit balance can be applied later to new invoices.) If the client is paying less than their balance due, the amount can be applied to any unpaid invoices. The invoices still not paid will appear on the client’s aging report.

Description The payment’s description appears on client payment reports. It is also copied to journal entries posted into the General Ledger. It is entered automatically as “payment on account”, but can be changed.

Date and check number The check date is the date on which the client made the payment. The check number appears on a check, and is entered for reference. (You can find client payments by check number.) Both should be entered from the information printed on the check.

Payment date and accounting period This is the date on which the payment was added. Today’s date is entered automatically, but can be changed. Client payment reports can be printed showing payments by payment date. The accounting period determines which financial period is updated when this payment is posted. The current period, from Agency Information, is entered automatically but can be changed. Any unlocked accounting period can be chosen from the period pop-up menu.

Batch number Deposits can be grouped together by batch number. If your bank deposit slips have a pre-printed number, use it; if not, enter the date. The group of deposits can then be shown on the Bank Reconciliation as a single batch total.

Debit G/L account The debit G/L number is used to track cash receipts on the financial statements. The account number is copied from the “cash account” in the G/L preferences, but can be changed. Your default checking account is entered automatically. If you’re depositing this payment into a different checking (or savings) account, enter that account’s number instead.
If you’re not sure of which account to use, delete the default account then press Tab. The chart of accounts Lookup List will open, listing your G/L accounts. Double-clicking on an account copies it to the payment.

3 Click Save.

The credit G/L number is copied from the invoice -- it is the invoice’s dGL, which is usually A/R. This account number usually doesn’t change, since client payments offset the A/R balance.

The first part of the client payment, the payment header, is saved. It isn’t finished until the payment amount is applied to the client’s unpaid invoices. Once a payment is saved, the Distribute Payment window opens, listing the client’s unpaid receivables. Only posted invoices appear on the payment distribution window.

If you use the auto-allocate option and the client’s balance was paid in full, all of its invoices will be paid off automatically. The auto-allocate option applies the payment amount to the client’s oldest invoices first, then works forward. The actual amounts applied to invoices can be modified before the payment’s distribution is saved.

4 Click on an invoice to select it for payment.

Any invoice can be selected for payment, whether it’s new or old. Invoices that are already fully paid can’t have more payments. They aren’t listed since they have no balance due. Invoices with credit balances appear in the window and can be paid off by entering negative payment amounts. The negative payment amount will offset the invoice’s credit balance.

In cases where you have an invoice and its credit (i.e., one with a balance and the other with a credit for the same amount) you can easily clear both from the client account by entering payments to each invoice. Enter a positive payment amount to the first invoice, then a negative payment amount to the second invoice.

5 Enter a discount amount and discount G/L account, if applicable.

If you offer this client an early-payment discount, you can enter the discount amount now. This amount doesn’t have to be a discount, either; it can be any kind of adjustment to this invoice. When the payment is posted, both the adjustment amount and the payment amount will be applied to this invoice. The discount G/L account indicates which account will be debited when this payment is posted. The adjustment amount makes a debit journal entry into a sales discount account.

6 Enter this invoice’s payment amount and G/L account.

The payment amount lowers the invoice’s balance due. It is the amount after any discounts or adjustments. A journal entry will be created in the General Ledger crediting the A/R account for this invoice’s payment amount.

7 Repeat steps 2-6 for any remaining payment, then click Save.

A payment can be applied to one, some, or all of the client’s unpaid invoices.

The amounts you apply to invoices must equal the client payment total -- the amount you entered from the client’s check. If not, you must re-apply payments to invoices until the amounts balance. Canceling the distribution gives you the option to delete the payment and start over.

Saving this payment’s distribution completes the client payment. Once the payment is completely saved, it can be proofed then posted. Invoices won’t show payments (i.e., they will still appear on aging reports) until the payment is posted. Posting updates the client account, invoice balances, and the General Ledger. Posting doesn’t affect jobs.

To add a non-client payment

Bank deposits are a special payment type used when your agency receives a check that doesn’t pay off a client’s invoice. Bank deposits can be used to add checks for such things as cash deposits, interest income, media commissions paid, or tax refunds. Learn how to add a non-client payment here.

	Learn more about adding client payments in this Clients & Profits classroom video training session. Running time: 5:38