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Settlement Concepts

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, as well as to retrieve information on processed payments and to associate it with the corresponding accounts receivable or accounts payable. Broadly speaking, JustOn Cash Management helps reconcile accounts.

Understanding Settlement

Businesses sell and purchase products and services. These operations involve payments or payouts. To settle (or reconcile) accounts, you need to retrieve information on processed payments and to associate it with the corresponding accounts receivable or accounts payable.

pay_app_settle

Settlement in JustOn Cash Management

The settlement implementation allows users (or the software) to assign registered payments to open entries. In this sense, it constitutes the reconciliation means.

Implementation Details

To settle accounts, JustOn Cash Management relates entries with payments using entry items.

Entry Item Concepts

Entry items associate entries with payments (via a known reference or a matching operation) in an n:m relationship. This allows, for example, to distribute one money transfer to multiple entries or to settle one entry with multiple money transfers.

This means: the amount of an entry and the amount of a payment do not necessarily need to be the same. The settlement implementation allows to

  • Associate one entry with multiple payments
  • Associate multiple entries with one payment
  • Associate partial payment amounts with an entry

Entry items "live" and can be modified – through user interaction, like manual assignments or matching operations, or automatic processes, like matching by end-to-end ID or payment processing via payment providers. That is, entry items are subject to change, may become 0, but will never be deleted.

Entry Item Amount Values

The entry item holds the actual amount used for the settlement operation. In addition, an entry item can block a certain amount during an ongoing payment transaction, represented as Expected Amount – which is 0 after the collection has completed.

With respect to the settlement progress, the following amount values on entry items are relevant:

pay_app_entryitem_amounts

Amount Type Description
Amount Shows the amount assigned to an entry in order to settle it using this entry item. Produces both the Settled Amount on the related entry and the Assigned Amount of the related payment. Negative values are payments, positive values are payouts (see Payment Types).
Expected Amount Shows the expected amount of a pending (requested but not collected) payment, produces the Expected Amount on the related entry. Negative values are payments, positive values are payouts.

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

General Settlement Logic

The settlement operation applies the following logic, irrespective of the settlement approach:

  • The actual settlement amount usually defaults to the available amount of the relevant payment record.
  • To prevent overpayments, the settlement amount (as a result of a reassignment or optionally set by a user, see Manually Settling Entries) will never exceed the open amount of the entry. Any remaining amount remains on the payment – available to be assigned to another entry.
  • In case of n:m settlements, a newer entry/payment pair takes precedence, which would, if necessary, modify the settlement amount of a previous entry/payment pair.
  • If the Account fields of an entry and a payment differ, JustOn Cash Management considers this as a debtor change.

    With the settlement operation, the amount of existing entry items associated to entries of different accounts becomes 0. Once completed, the account of the payment is set to the account of the entry.

  • The payment date of an entry item is set to the payment date of the associated payment.

  • The payment date of an entry is updated each time a settlement operation takes place, where

    • the payment date of the entry is set to the payment date of the newest entry item with a non-zero amount if the sum of all entry items settles the open amount of the entry,
    • the payment date of the entry is cleared if the sum of all entry items falls below the open amount of the entry.
  • With ongoing payment transactions (payments in the statuses Open or Issued), JustOn Cash Management blocks the settlement amount, represented as Expected Amount. The expected amount becomes 0

    • after the collection has completed so that the settlement can take place, or
    • if the collection has failed permanently, which frees the money from the entry for another collection attempt.

Settlement Approaches

The association between entries and payments takes place in various ways:

Automatic payment matching using a unique criterion
When initiating payment transactions via a payment provider integration or a connected bank account, there is, usually, a unique ID – a payment provider ID or, with direct debits or credits produced from JustOn Cash Management, an end-to-end ID.
pay_app_ebics_match
Automatic payment matching by data comparison
JustOn Cash Management can relate payment transactions with entries based on matching data like the customer number or statement number – as passed with the reference text – or the amount. Depending on the data quality, this either directly connects payments with entries or produces a list of probable matches to be reviewed and completed by users.
The data comparison is configurable, see Configuring Payment Matching.
Manual settlement
Users can manually select a payment and associate it with an entry, see Manually Settling Entries.
pay_app_manual_match

For details, see Payment Matching Overview.