ASPIRE Cash Application Method Definitions

ASPIRE Cash Application Method Definitions

Overview

Cash Application Methods (a.k.a. Cash Application Codes) provide the ability to setup the way and the order to apply cash. There are four predefined Application Methods available in ASPIRE, each can be set up to determine in what order cash is automatically applied.

Balance forward

·         User should create priority order in Administration > Cash Management.

·         Will find the oldest invoice due and pay monies to charges, according to the priority order set in Administration > Cash Management.

·         After paying oldest invoice due, if there are any monies left over, will find the next oldest due and, again, will apply in priority order. This will continue until monies are completely used.

·         If “Group with Parent Charge” is true: Sales Tax would be grouped with rent (would assume rent in priority order) and would be pro-rated across those charges, following the same oldest due ordering as outlined above.

Examples:

·         Cash Application Priorities:


·         A $2,000.00 payment is received.

·         There are two open invoices ($1,075.00 each) dated 04/01/2021 and 05/01/2021.

·         04/01/2021 invoice is fully satisfied. ($1,000.00 Rent, $50.00 Sales Tax, $25.00 Late Fee)

·         $925.00 is applied to 05/01/2021 invoice. ($925.00 to Rent, nothing applied to Sales Tax or Late Fee).

 

Balance Forward Pro-Rated

·         Does not use any priority ordering.

·         Will find oldest invoice due and pro-rate monies across all of the charges on the invoice.

·         After paying oldest invoice due, if there are any monies left over, will find next oldest due, and again, pro-rate monies across all of the charges on the invoice. This will continue until all monies are completely used.

Examples:

·         A $2,000.00 payment is received.

·         There are two open invoices ($1,075.00 each) dated 04/01/2021 and 05/01/2021.

·         04/01/2021 invoice is fully satisfied. ($1,000.00 Rent, $50.00 Sales Tax, $25.00 Late Fee)

·         $925.00 is applied to 05/01/2021 invoice. ($860.47 to Rent, $43.02 to Sales Tax, $21.51 to Late Fee).

o   How to calculate the pro-ration: Charge Amount / Invoice Amount * Payment Amount

§  For Rent: $1,000.00 / $1,075.00 * $925.00 = $860.47

§  For Sales Tax: $50.00 / $1,075.00 * $925.00 = $43.02

§  For Late Fee: $25.00 / $1,075.00 * $925.00 = $21.51


Priority Post

·         User should create priority order in Administration > Cash Management.

·         Will pay Priority 1 across all invoices, oldest to newest.

·         After paying all Priority 1 charges across all open invoices, if any monies are left over, will pay Priority 2 across all open invoices, oldest to newest.

·         This will continue until all monies are completely used.

·         If ‘0’ or ‘null’ is specified for Priority, these charges will be paid last in priority order.

Examples:

·         Cash Application Priorities


·         A $2,000.00 payment is received.

·         There are two open invoices ($1,075.00 each) ($1,000.00 Rent, $50.00 Sales Tax, $25.00 Late Fee) dated 04/01/2021 and 05/01/2021.

·         $1,000.00 is applied to Rent charge on 04/01/2021 invoice. No monies are applied to Sales Tax or Late Fee.

·         $1,000.00 is applied to Rent charge on 05/01/2021 invoice. No monies are applied to Sales Tax or Late Fee.

 

·         A $2,100.00 payment is received.

·         There are two open invoices ($1,075.00 each) ($1,000.00 Rent, $50.00 Sales Tax, $25.00 Late Fee) dated 04/01/2021 and 05/01/2021.

·         $1,000.00 is applied to Rent charge on 04/01/2021 invoice.

·         $1,000.00 is applied to Rent charge on 05/01/2021 invoice.

·         $50.00 is applied to Sales Tax charge on 04/01/2021 invoice. No monies are applied to Late Fee.

·         $50.00 is applied to Sales Tax charge on 05/01/2021 invoice. No monies are applied to Late Fee.



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