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Process 165

Tasks
The tasks in the payment step are to identify the open items and to apply the
payment to these items. Customers make payment based on terms that were
previously agreed upon. Further, customers can pay multiple invoices at once, or,
conversely, can divide a single invoice into multiple payments.

Outcomes
When a customer payment is recorded, relevant general ledger accounts are
updated, and a corresponding FI document is created. In our example, RMB
has sent a payment for the fi rst invoice in the amount of $86,700. Figure 5-46
exhibits the general ledger impact of this payment. The bank account is deb-
ited and RMB’s account is credited by the amount of the payment. This trans-
action clears the open item in the customer’s account that was created during
the billing step. Because the customer account is a subledger account, the cor-
responding reconciliation account, accounts receivable, is also automatically
credited. Finally, because the payment reduced the amount receivable from
the customer, the customer’s credit limit increases by a corresponding amount.

Figure 5-46: FI impact of the payment step

In the above example, the customer pays the full amount owed. Very
often, however, the amount paid is not the amount owed. This is the case, for
instance, when the customer is entitled to discounts based on the payment
terms. Under the terms 1%10/Net 30, for example, payment is due no later
than 30 days of receiving the invoice, and the customer is entitled to a 1%
discount if it makes payment within 10 days. If the customer meets the terms

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