About Payment Application
Payments for business-owned invoices versus funded invoices
Payments are processed through BusinessManager for both funded and non-funded invoices. All invoices appear on customer statements. All payments should be directed to the financial institution per your BusinessManager Agreement. Payment posting and credit application are two separate actions. Ideally, your financial institution applies credit to the appropriate invoice(s) when the payment is received and posted. However, there are cases when the payment is posted as unapplied credit because there is not enough information provided with the payment to identify the associated invoices. The funds are moved according to the timing of the accounting entries made at the financial institution:
| If the payment is... | And the invoice is... | Then the funds are credited to... |
|---|---|---|
|
Applied to invoices at the time the payment is posted |
Funded |
The financial institution, which owns the invoice. |
|
Not funded or repurchased |
Either your DDA or your Reserve account (based on your setup with the financial institution). |
|
|
Applied later as open credit (by your business or your financial institution) |
Funded |
The financial institution, which owns the invoice. |
|
Not funded or repurchased |
Either your DDA or your Reserve account (based on your setup with the financial institution). If the Reserve is credited, your financial institution may transfer surplus funds to your DDA during the periodic reserve analysis. |
TIP
You can view payments credited to your DDA or Reserve in Account Details. Advise your customers to provide invoice detail with their payment to ensure prompt and accurate credit application.
Why does the BusinessManager Line balance increase when an open payment is applied to a non-funded invoice (owned by your business)?
Items not applied
Payment processors make every attempt to apply credit to the invoices specified on the customer's remittance advice. Occasionally, the applications cannot be made at the time of payment posting. The Items Not Applied section is a list of invoices for which the credit application attempt resulted in zero dollars applied:
- Invoice Already Paid. The applied amount is $0 because the invoice has a zero balance.
- Invoice Not Found. The invoice number does not exist in the business's list of OPEN invoices. (Even if the invoice actually exists, the application result is "Invoice Not Found" if it is fully paid.)
- No Payment Applied. The applied amount is $0 because the payment has no amount left to apply or the customer has not designated any amount toward the invoice.
