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Receivables/Payables Concepts

← About Receivables and Payables

payment_app_intro JustOn Cash Management is a Salesforce app that integrates Salesforce CRM with European banks and payment service providers. The app allows you to trigger payments and track payment information related to your business with customers.

You will be able to prepare and execute payment operations based on your orders, invoices or other statements that involve payments or payouts, be it SEPA orders via banks or payments via payment providers. Furthermore, you will be able to retrieve information on processed payments and to associate it with the corresponding receivables or payables – the basis for automatically handling overdue payments.

Broadly speaking, JustOn Cash Management helps reconcile accounts.

Understanding Receivables and Payables

Businesses sell and purchase products and services. These operations involve payments or payouts – documented in orders, invoices, credit notes or other statements. From an accounting perspective, they represent your accounts receivable (AR) and accounts payable (AP).

pay_app_entries

Receivables and Payables in JustOn Cash Management

JustOn Cash Management summarizes receivables and payables as entries – think of an "open entry" in your accounting system. Basically, the business operations are centered around these records – you manage entries, trigger payments based on entries, settle entries, etc.

Entries

JustOn Cash Management is centered around entries. They represent an amount of money owed to or requested from a business partner and hold all relevant information, based on statements that justify the corresponding request.

Descriptive Information

To allow for a unique identification of the relevant receivable or payable when communicating with customers, entries "wrap" relevant statement information in specific fields that are exposed to customers:

Field Description
Title A descriptive name, including the statement type and number. Is used, for example, to identify the entry on the payment page.
Payment Reference A both human-readable and effectively parsable identification of the related statement. Is used, for example, as the Reference information in SEPA payment orders, describing the purpose of the transaction.

Entry Types

Depending on their business semantics, entries can be of two types:

Debit

Entries of the type Debit represent receivables – usually, a request for payment to a customer based on an invoice, sales order, etc. Debit entries relate to payments of the type Payment, which stand for incoming money.

Be aware that from a banking perspective, incoming money is a credit. So a bank statement item whose amount indication is Credit will offset a debit entry.

Credit

Entries of the type Credit represent payables – money owed to a customer, typically, following a credit note, refund, etc. Credit entries, consequently, relate to payments of the type Payout, which stand for outgoing money.

Again, be aware of the opposite banking perspective: outgoing money is a debit, So a bank statement item with the amount indication Debit will offset your credit entry.

Amount Values and Statuses

Upon creation, entries have an open amount, which represents the original amount payable or receivable. With an open amount, entries are in the status Open.

Registering payments reduces the open amount. Entries become Balanced once they are completely settled, that is, when the assigned amount balances out the open amount, like

Open Amount = Assigned Amount * (-1)

With this respect, the following amount values are important:

pay_app_entry_amounts

Amount Type Description
Open Amount
(Request →)		 From the request perspective, shows the total amount receivable or payable (after applying reductions to the Initial Amount), corresponds to the Open Amount of the payment.
Positive values represent receivables and produce debit payments, negative values represent payables and produce credit transfers.
Outstanding Amount
(Request →)		 From the request perspective, shows the currently outstanding amount, that is, the difference between the Open Amount and the Assigned Amount.
Positive values represent debit payments (receivables), negative values represent credit transfers (payables).
With entries in the status Balanced, this value must be 0.
Payable Amount
(Request →)		 From the request perspective, shows the amount still to pay, that is, the difference between the Outstanding Amount and the Expected Amount.
Positive values represent debit payments (receivables), negative values represent credit transfers (payables).
Expected Amount
(← Payment)		 Shows the currently expected amount of all pending (requested but not collected) or open (created but not requested) payments (see Payment Lifecycle).
A negative value represents money to be received (payment type Payment, like a customer payment made to settle an invoice), a positive value represents money to be paid out (payment type Payout, like a payout made by a merchant to settle a credit to a customer).
Technically, this is a roll-up summary over the Expected Amount values of all associated entry items.
Assigned Amount
(← Payment)		 Shows the amount already assigned to settle the entry from the payment perspective.
A negative value represents received money (payment type Payment, like a customer payment made to settle an invoice), a positive value represents paid out money (payment type Payout, like a payout made by a merchant to settle a credit to a customer).
Technically, this is a roll-up summary over the Assgined Amount values of all associated entry items.

Entry and Payment Lifecycle gives an outline view of how these values change as payment and settlement progress.

Payment Processing Data

Entries can define specific information to control how subsequent payment processes are to be executed.

Field Description
Requested Bank Account Restricts the payment process to the current bank account for SEPA transactions.
Requested Payment Instrument Restricts the payment process to the current payment instrument.
Requested Payment Method Indicates the expected payment method, which is not mandatory for the payer but can control downstream processes.
The picklist values include SEPA, Online Payment and Bank Transfer.
Requested Payment Provider Restricts the payment process to the current payment provider.

Business Entity

Entries are always related to a Business Entity record. The business entity represents the legal entity or organization "doing business". It holds data that is required for processing payments or payouts.

Entry Origin

The way you create or retrieve entries depends on the integration of JustOn Cash Management with your Salesforce org. A proven way is, for example, the integration with JustOn Billing & Invoice Management.

Integration with JustOn Billing & Invoice Management: Concepts

The payment functionality shipped with JustOn Cash Management is centered around entries (see Receivables/Payables Concepts). These records hold all information with respect to an amount of money owed to or requested by a business partner, based on statements that justify the corresponding request.

In JustOn Billing & Invoice Management, the produced invoices or – if set up and used – installments represent payment requests. Now integrating JustOn Billing & Invoice Management with JustOn Cash Management provides for both

  • the creation of the relevant entry records directly after the invoice finalization or installment creation/modification, and
  • the creation of the relevant balance records (where the field Origin is set to JPAY1) as well as the relevant booking details for a registered money flow.

Canceling an invoice in JustOn Billing & Invoice Management will cancel the related entry in JustOn Cash Management.

jpay_jo_integration
Creating entries on invoice finalization or installment creation, creating balances for payments

Cancellation

As a result of certain business use cases, some payment requests may no longer be justified – like, for example, when canceling an invoice or changing a payment plan. Consequently, the corresponding entries must be canceled.

Depending on the integration of JustOn Cash Management with your Salesforce org, the way to cancel entries may differ. A tight integration may provide for an automatic cancellation, or users can cancel entries manually.

When canceling an entry, JustOn Cash Management will

Entry Reductions

As a result of certain business use cases, some payment requests may have to be reduced – like, for example, when creating a partial credit for an invoice or when writing off an invoice. To support such use cases, JustOn Cash Management introduces reductions.

Implementation Details

Reduction records reduce the receivable or payable amount of an entry. Be aware of the following specifics:

  • Reductions always relate to an entry.
  • The reduction amount always has the opposite sign to the initial amount of the related entry.
  • Technically, an entry's open amount is the sum of its initial amount and any applicable reduction amount. Since a reduction has the opposite sign, it makes the open amount the difference between the initial amount and the reduction amount.

pay_app_reduction_amount

Note

The maximum reduction amount depends on the entry type:

  • Entries of the type Debit can be reduced up to the current open amount.
  • Entries of the type Credit can be reduced up to the current payable amount.

Workflow

There are two ways to create reductions: users can create reductions manually for existing entries, or flows or APEX code can use an API to create reductions automatically.

Once created, a reduction record reduces the open amount of its related entry. In particular, JustOn Cash Management will

  • recalculate the Open Amount of the reduced entry

    Initial Amount + Reduction Amount = Open Amount

  • reduce existing settlements, that is, payment assignments, by the reduction amount – adjusting the relevant amount values on the related entry item (decrease the Assigned Amount) and the related payment (decrease the Assigned Amount, increase the Available Amount), see Reduce Entry | Entry and Payment Lifecycle

  • apply the defined credit balance strategy to the related payments (Prepared Refund by default, see Reduce Entry | Entry and Payment Lifecycle)

Entry Settlement

As a result of certain business use cases, some receivables and payables may have to be offset directly – like, for example, when a customer has to pay an invoice and receives a credit note at the same time. To support such use cases, JustOn Cash Management introduces the entry settlement functionality: particular debit entries and credit entries are offset against each other.

Entry settlement does not consider related payments. Instead, it mirrors the settlement function in JustOn Billing & Invoice Management, which offsets non-related invoices and credits.

Implementation Details

Entry settlement is a special case of a reduction: it reduces both the receivable amount of the involved debit entry and the payable amount of the involved credit entry. The produced reduction records are related to the original entry and, in addition, cross-linked to each participating entry.

Be aware of the following specifics:

  • Entry settlement always creates a reduction for each involved entry.
  • Each reduction is additionally associated to the participating opposite entry and its assigned reduction.
  • The involved entries must relate to the same account and and the same business entity.
  • The settlement amount cannot exceed the smaller of the two entry amounts. For example, a receivable of € 100 and a payable of € 50 can only be settled up to € 50.

Info

Each settlement involves a pair of entries – a debit entry and a credit entry (see Entry Types) – and creates the the related reductions. It is possible, however, to execute multiple settlement operations, for example, to offset one receivable against multiple payables – one at a time.

Workflow

There are two ways to create an entry settlement: users can settle existing entries manually, or flows or APEX code can use an API to settle entries automatically.

Once settled, each reduction record reduces the open amount of its related entry. In particular, JustOn Cash Management will

  • recalculate the Open Amount of the two entries involved in the settlement operation

    Initial Amount + Reduction Amount = Open Amount

  • reduce existing payment settlements, that is, payment assignments, by the reduction amount – adjusting the relevant amount values on the related entry items (decrease the Assigned Amount) and the related payments (decrease the Assigned Amount, increase the Available Amount), see Reduce Entry | Entry and Payment Lifecycle

  • apply the defined credit balance strategy to the related payments (Prepared Refund by default, see Settle Entries | Entry and Payment Lifecycle)

Statements

A statement is a stand-in for a legally binding document or declaration that produces a payment request – represented as an entry. Statements can be, for example, invoices, installments, orders, credit notes, etc.