Creating Interest-Bearing Installments
Process
This job aid covers the system processes of entering RE transactions to establish each billable installment in CORE. Additionally, the job aid covers how to view customer account status regarding paid amounts and outstanding balances in CORE, as well as viewing a list of receivables for a customer along with their individual balances and due dates. Finally, this job aid covers how to modify an existing RE transaction to add a penalty fee when a customer fails to meet their payment obligation by the specified due date.
There are circumstances when installment billings for accounts receivable are appropriate; for example, an agreement with the customer to allow payments over time. When a customer requests and is approved to make installment payments on an outstanding receivable AND if interest charges need to be incorporated into the installments, an offline (i.e., non-CORE) amortization schedule needs to be created to facilitate recording the payments inclusive of interest charges.
CORE allows you to enter the billable installments in the form of Receivable (RE) transactions, which account for both the principal and interest amounts. RE transactions are created for each installment, including their respective amounts and due dates. Once payments are received against each RE, they are recorded as Cash Receipt (CR) transactions. Using this CORE functionality allows the proper tracking of collected amounts, outstanding balances, and the payment status of each Receivable.
Establishing Interest Bearing Installment Billings
Once an offline amortization schedule has been prepared and the installment amounts, applicable interest, and due dates have been established, each installment is entered as a RE transaction. If there are 10 installments, for example, 10 RE transactions are created.
When one RE transaction has been created, use the Copy Transaction feature to minimize repetitive data entry and quickly create the remaining RE transactions.
1. Enter RE in the Global Search field
2. Create Transaction
Enter Transaction Dept
Enter the Transaction ID
Select Auto Numbering
Click Continue
3. Select the Vendor section
Select the Vendor Customer pick list
Select Browse
Click the Select link corresponding to the desired customer
4. Select the Billing Profile pick list
Enter a Billing Profile code
Select Search
Click Select next to the desired Billing Profile
Select Ok
5. Select the Address Code pick list
Click the Select link next to the desired Address (if there is more than one)
6. Select the Billing/ Collection information tab
Enter the Due Date per the offline amortization schedule
Check that the Suppress Invoice Billing and the Suppress Auto Finance Charge dropdown menus are set to yes
7. Select the Accounting Section
Select Insert New Line
Enter the Event Type “AR01” (Bill Earned Revenue)
Enter the Line Type “A” (Principal)
Enter the Line amount per the offline authorization schedule
8. Select the Funding Accounting tab
Enter the Fund, Department, Unit, Revenue Source Code, Appropriation Unit Code
Select Save
9. Select the General Information tab. Note: grid area is updated with the entered Line Amount and Event Type
Select Copy Line icon next to the existing Accounting Line
Select Insert Copied Line
Edit the Line Type from “A” to “B” (Interest)
Edit the Line amount to reflect the interest amount for the installment
10. Select the Funding Accounting tab
Edit the Fund, Department, Unit, Revenue, and Appr Unit fields as necessary to reflect the appropriate accounting information for the interest portion of the installment
Select Save
11. Select Validate and Submit
If all entered values meet configured system parameters, the message Transaction Validated Successfully appears
When a Transaction is submitted successfully a message appears. The Phase of the transaction changes to ‘Pending’. Once the final approval has been applied, the Phase changes from ‘Pending’ to ‘Final’
You now need to utilize the CORE Copy Transaction feature to create additional RE transactions, one for each of the remaining installments as specified on the offline amortization schedule.
12. Select Copy
Enter the Transaction Department Code
Select the Auto Numbering checkbox
Select Copy Transaction
13. Select the Vendor section
Select the Billing / Collection Information tab
Enter a Due Date for this installment per the offline amortization schedule
Ensure that the Suppress Invoice Billing and Suppress Auto Fin Charge dropdowns are set to yes
14. Select the Accounting section
Verify the Event Type, Line Type, and Line Amount values and edit them as necessary
Note that the data entered in the previous RE transaction already populates the rows and fields in this section
Noting that the first row representing the Principal amount is selected, scroll down the page
15. Select the Fund Accounting tab
Verify that the Fund, Department, Unit, Revenue, and Appr Unit values are valid for the principal amount of this installment.
Edit values as necessary
16. Select the General Information tab
Verify the Event Type, Line Type, and Line Amount to ensure they are valid for the interest portion of the installment
Edit values as necessary
17. Select the Fund Accounting tab
Verify that the Fund, Department, Unit, Revenue, and Appr Unit values are valid for the interest portion of the installment
Edit values as necessary
18. Select Validate and Submit
To continue creating RE transactions for the remaining installments, go back to Step 12 and utilize the Copy Transaction functionality.
Tracking Collected Amounts and Balances
Once all Receivable (RE) transactions have been entered for all installments, they are ready to have payments made against them. When payments are received, they are entered as Cash Receipt (CR) transactions referencing each RE transaction.
This section of the job aid covers the steps needed to obtain collected amounts and outstanding balances for customers paying these installments.
1. Enter CUSTA into Global Search field
2. Select Search enter the customer Name and select apply
3. The search results are displayed in the grid and scalar areas. Use the following fields to obtain details on the customer account:
Unliquidated Amount - Total amount that is billed, but not liquidated, from all open Receivable lines for the provided Customer Account.
Collected Amount – Total payments received from the customer.
Outstanding Balance- Total receivable due minus the Collected Amount.
Earned Unliquidated Rec - The total earned amount that is billed, but not liquidated from all open receivable lines for the provided Customer Account.
4. Click the dollar amount associated with the Earned Unliquidated Rec field
5. The Detailed Transaction Listing page displays. All recently created receivables appear first. You can click the Transaction Identifier links to navigate to the desired RE transaction.
Tracking Individual Receivables for a Customer
1. Enter RESTA in the Global search field
2. Enter the customer Name and select apply
The grid below displays all receivables for the specified customer. Note that you can quickly view the Outstanding receivable amounts and their respective Due dates, as well as click on each Transaction ID link to open the desired RE transaction and view its details.
Adding a Penalty Fee
If the customer defaults on an installment (i.e., fails to make a payment by the specified due date), you may assess a penalty fee. This is accomplished by modifying the Receivable (RE) transaction and adding the penalty fee as an additional line amount to be collected.
1. Enter RE in the Global Search field
Enter the Department in the Dept. field
Enter the Transaction ID of the defaulted receivable transaction in the ID field
Select Search
Select the Transaction ID link
2. Click the Accounting section
Select Modify
A new Version (2) of the RE transaction with a Function of Modification is created
3. Select the Copy Line icon next to the desired Accounting Line
Select the paste Copied Line.
4. Edit the Line Type to C (Late Fee)
Edit the Line Amount to reflect the penalty fee amount
5. Select the Reason pick list icon
Click the Select link next to the desired Adjustment Reason code
Select OK
NOTE: The Reason code is required any time you are modifying an RE transaction that is in a Final phase.
6. Select the Fund Accounting tab
Edit the Fund, Department, Unit, Revenue, and Appr Unit fields as necessary to reflect the appropriate accounting information for the penalty assessment
Select Save
7. Select Validate and Submit
If a system-configured approval workflow exists for the RE transaction, the Phase changes to ‘Pending’. In this case, all designated approvers need to apply their approval to the RE. Once the final approval has been applied, the Phase changes from ‘Pending’ to ‘Final’. You have successfully modified the existing R transaction with the penalty amount.