What is Cash Application?

Cash Application is a part of AR. In C.A. we allocate the incoming payment received form the cust to
correct cust account with receivable entry after checking the remittance.

In C.A, we download the bank statement from the bank, select the period and export it in excel and
start allocation the payment.

1.Invoice No 720 12.10.2022 12200 1800000395

2.Invoice No 721 12.10.2022 98700 1800000396

3.Invoice No 725 12.10.2022 112345 1800000397

4.Invoice No 727 12.10.2022 77651 1800000398

5.Invoice No 728 12.10.2022 89720

6.Invoice No 735 12.10.2022 72321

7.Invoice No 736 12.10.2022 554421

8.Invoice No 739 12.10.2022 12345

9.Invoice No 740 12.10.2022 12345

Remittance:Payment Advise/Information

Details: Customer, Payment date, AMount, Invoice, Bank A/c

Case No.1

Applied Credit:-12200:-Payment Remittance Inv No:720--Bank(received)

(Customer,Payment,Remittance share Invoice No.720--Receivable (sale entry))

Open Item:-Receivable (Sales) Fb70

Cleared Item:Incoming payment(Received and Applied)

All Item: Open+Cleared(Statement)

Fbl5n

1.Invoice No 720 12.10.2022 -12200 1800000395

2.Invoice No 721 12.10.2022 -98700 1800000396

3.Invoice No 725 12.10.2022 -112345 1800000397

4.Invoice No 727 12.10.2022 -77651 1800000398

5.Invoice No 728 12.10.2022 -89720 1800000399

6.Invoice No 735 12.10.2022 -72321 1800000400

7.Invoice No 736 13.10.2022 -554421 1800000401

8.Invoice No 739 13.10.2022 -12345 1800000402

9.Invoice No 740 13.10.2022 -12345 1800000403

10.Invoice No 742 13.10.2022 -66543 1800000404

11.Invoice No 743 13.10.2022 -66543 1800000405

Payment Allocate:-12200:-Remittance:Inv No 720

Cleared Item:-

1.Invoice No 720 12.10.2022 -12200 1800000395

Payment Allocate:- 12200:- Remittance:Inv No 720

Case No.2

Unapplied credit:- On Account Transaction

payment 12345: Didnt share the remittance:-

On Account:-Unapplied, It will be shown in the open item.

FBL5N

Open:-

2.Invoice No 721 12.10.2022 -98700 1800000396

3.Invoice No 725 12.10.2022 -112345 1800000397

4.Invoice No 727 12.10.2022 -77651 1800000398

5.Invoice No 728 12.10.2022 -89720

6.Invoice No 735 12.10.2022 -72321

7.Invoice No 736 12.10.2022 -554421

8.Invoice No 739 12.10.2022 -12345

9.Invoice No 740 12.10.2022 -12345

Payment:Received:Unapplied

Open Item:-

Payment Entry +12345

2.Invoice No 721 12.10.2022 -98700 1800000396

3.Invoice No 725 12.10.2022 -112345 1800000397

4.Invoice No 727 12.10.2022 -77651 1800000398

5.Invoice No 728 12.10.2022 -89720

6.Invoice No 735 12.10.2022 -72321

7.Invoice No 736 12.10.2022 -554421

8.Invoice No 739 12.10.2022 -12345

9.Invoice No 740 12.10.2022 -12345

Next STep:approach cust & ask him to share the payment remittance

F-32

+12345

Inv No 740 -12345

-----------------

----------------

Cleared Item

Payment 12345

Inv No 740 12345

Fbl5n After F-32 (Open Item)

2.Invoice No 721 12.10.2022 -98700 1800000396

3.Invoice No 725 12.10.2022 -112345 1800000397

4.Invoice No 727 12.10.2022 -77651 1800000398

5.Invoice No 728 12.10.2022 -89720

6.Invoice No 735 12.10.2022 -72321

7.Invoice No 736 12.10.2022 -554421

8.Invoice No 739 12.10.2022 -12345

Payment Entry +12345

9.Invoice No 740 12.10.2022 -12345

Case 3rd:-Round off Payment(1,00,000)----Payment Remittance

Inv No 721 -98700

Inv No.725 -1300

Payment:- Cleared

Inv No 721 -98700

Inv No.725 -1300

Open Item:-

3.Invoice No 725 12.10.2022 -112345+1300 1800000397

4.Invoice No 727 12.10.2022 -77651 1800000398

5.Invoice No 728 12.10.2022 -89720

6.Invoice No 735 12.10.2022 -72321

7.Invoice No 736 12.10.2022 -554421

8.Invoice No 739 12.10.2022 -12345

Case No.4:-Short&Excess

Payment 73320:- Invoice No 735:-72321--Applied

Bank A/c Dr 72320

Short & Excess Dr 1

to Customer A/c 72321

Payment 12350: Inv No 739 against 12345

Bnak A/c Dr 12350

To Customer A/c 12345

To Short & Excess A/c 5

Case 5: Short Payment & Excess Payment

Payment: 89600 against Inv 728 89720

Inv No 728:-89720

120:-On Account

2 Reason:On Account

1) Unapplied Credit

2) Short Payment,Partial Payment

89720 Inv No 728

89600

--------------

120 on Account:-To be recieved

89900 Payment Excess Inv No 89720

Inv No 89720

Pay 89900

180 on account

+180 Advance

----------------------------------------
1)Applied: Remittance

2)Unapplied: No Remittance

3)Partial Payment:Round off Remittance

4)Short & Excess

5)Short payment or Excess Payment

6)Reapplied Credit

Case No.6

Reapplied Credit:- Incorrect Application

Payment 66453:-without Remittance

Applied :-Inv No 742

Cleared Item

Payment 66543

Inv No 742 -66543

-------------------

-------------------

Payment:Reverse & Reset

1)Reverese:-Fresh Entry

2)Reset:-F-32 Cleared Item

7)Unidentified Transaction

------------------------------------------------------------------

CASE 1 Applied Credit

PAYMENT:-12200----REMITTANCE INV NO 720 1400000568

PAYMENT:-98700----REMITTANCE INV NO 721 1400000569

PAYMWNT:-112345----REMITTANCE INV NO 725 1400000570

Cleared Item,

DR: Invoice FB70

DZ:Payment F-28

Case 2 Unapplied Credit

5.Invoice No 728 12.10.2022 -89720 1800000399

6.Invoice No 735 12.10.2022 -72321 1800000400

7.Invoice No 736 13.10.2022 -554421 1800000401

8.Invoice No 739 13.10.2022 -12345 1800000402

9.Invoice No 740 13.10.2022 -12345 1800000403

Payment :12345: hdfc bank: dont have payment remittance

F-32 cutimer clearing

F-28, on account,reach to cust for remittance, F-32 Clear cust account

Unapplied Account:-

Means when we receive the payment but we dont have the payment remittance or

the invoice in the payment remittance is not reflecting in the open item of

the customer in that case we put the transaction in ON Account & this ON Account

transaction is called Unapplied Credit & it will be shown in the open item of

the customer account. Our next step is to reach to the cust and ask

him to share the payment remittance. Once we receive the payment

remittance, then we have to clear the customer account by F-32.

Partial Payment