Create a Cash Receipt and Payment Application

The following section describes how to make payments from cash receipts toward repayment of various loans of a borrower. You can make a payment by creating a cash receipt.

Payments Using Cash Receipts

Prerequisites

The following are the prerequisites to make a payment using cash receipt:

• CL-Loan picklist value is added to the Contract Management System field of the Payment Spread Detail object. For more information on adding this picklist value, see Add picklist value.

• The Enable Cash Receipts checkbox in the Custom Settings > CL Platform Settings is enabled.

• A payment spread is defined and is associated with the account or the contact.

Steps

Perform the following steps to make a payment using cash receipt:

1. Define a payment spread.

2. Create a cash receipt.

3. Create a payment application.

Define a Payment Spread

You must associate a payment spread with a borrower. The associated payment spread decides the order in which all the dues of a borrower are listed, but the order of payment depends on the payment methodology selected (auto allocate or manual allocate).

Steps

Perform the following steps to define a payment spread:

1. Log in to your Salesforce account.

2. Select App Launcher .

3. In the Search apps and items... box, search for Payment Spreads, and then select it.

   

4. Select New.

5. In the New Payment Spread window, provide the details as explained in the following table, and then select Save:

   Note:

   You can refer to the image following the table as an example.

   Field	Action
   Enabled	Select the option to indicate whether or not this payment spread is enabled. The options of this field are: Yes No
   Spread Description	Enter a description to easily identify the payment spread. For example, Protect Spread, or Investors Spread, or Payment Spread for Cash Receipts.
   Tax Configuration	Select the tax configuration for this payment spread. The options that you can select from are: Distribute Receivable First Tax First

   

6. Select the newly created payment spread and then select Related.

7. In the Related tab, select New to add details to this payment spread.

   

8. In the New Payment Spread Detail window that opens up, provide the details as explained in the following table and then select Save:

   Note:

   You can refer to the image following the table as an example.

   Field	Action and Information
   Contract Management System	Select the contract management system for which this payment spread is applicable. You can select from the following available options: CL-Lease CL-Loan
   Payment Spread	This field is automatically updated with the Payment Spread ID of the spread for which the details are entered here.
   Enabled	Select the option to indicate whether or not this payment spread is enabled. The options of this field are: Yes No
   Balance Type	From this Balance Type field, select the charge that you want to include in the spread. You can add multiple balance types by adding new payment spread details to the same payment spread. The balance types are charged as per the Sequence Number defined in the next row. The options for the balance types are: Lease Receivable Fees Tax Loan Receivable Loan Non Receivable Loan Written Off attorney fee
   Sequence Number	Enter the sequence number for the balance type selected in this payment spread detail.
   Fee Definition	Select the fee to be considered for this payment spread detail.

   

This creates the payment spread for the cash receipt to be applied. The Loan Payment Spread displays the list of spreads, default and user-defined, that are available in the system. 

Create a Cash Receipt

A cash receipt is to be created at the borrower's level. A payment made by the borrower first reflects in a cash receipt. 

In the following example, seven payments are made by the account (borrower) named account simple. Cash receipts corresponding to each payment made are created by the user reflecting the received amount (Receipt Amount) and the amount remaining after satisfying the dues (Unapplied Amount ). When a cash receipt is not applied, the Receipt Amount = Unapplied Amount.

Prerequisites

The following is the prerequisite to create a cash receipt:

• Payment spread to be associated with the cash receipt is defined.

Steps

Perform the following steps to create a cash receipt:

1. Log in to your Salesforce account.

2. In the ( App Launcher), search for Cash Receipts, and click it.

3. On the Cash Receipts page, click New.

4. In the New Cash Receipt window, select Cash Receipt.

5. Click Next.

6. In the Edit Cash Receiptwindow, specify the details as described in the following table:

   Note:

   You can refer to the image following this table as an example.

   Field Name	Description
   Account	The account (borrower) who has made the payment.
   Contact	The contact (borrower) who has made the payment.
   Receipt Amount	The payment received from the borrower.
   Received Date	The date on which the payment was received. This can be the check date or the transfer date.
   Payment Mode	The mode of the payment made: Cash ACH
   Master Loan	The master facility parent loan contract ID for which the cash receipt is created for an automated consolidated payment or a manual consolidated payment. Note: This lookup field is a lookup to all the master facility parent loan contracts that are associated with the preceding Account or Borrower selected. Once you have selected a master facility loan contract for a cash receipt, you cannot change it later.

7. Click Save Cash Receipt.

   Note:

   You can also create cash receipts from the Cash Receipt section on the account or the contact page.

The following image depicts a new cash receipt being created:

Create a Payment Application

From the amount received in a cash receipt, multiple payments can be made until the available amount gets exhausted. For each payment, a payment application is created so multiple payment applications can be created from one cash receipt. Each payment application is used to make a payment for the amount less than or equal to what is available in the cash receipt. This is called applying a payment application. The amount remaining after applying is the unused amount and is used to create the next payment application.

Example

As shown in the following image, the user has created four payment applications to make made four payments from the cash receipt (CRT-0000000040). All the payment applications that are created are listed in the Payment Applicationssection.

Prerequisites

The following are the prerequisites to create a payment application:

• A cash receipt for the payment made is created.

  Note:

  To know about how to create a cash receipt, refer to Create a Cash Receipt.

• There is some unapplied amount in the cash receipt.

Steps 

Perform the following steps to create a payment application:

1. Click on the cash receipt from which the payment has to be made.

2. Scroll down to Payment Applicationssection, click New Payment Application.

   The New Payment Application page is displayed with the sections and their details described in the following table:

   Field Name	Description
   Borrower Details
   Account Name	Borrower's account or contact name for whom this cash receipt is created.
   Default Payment Spread	The default payment spread that you associated with this cash receipt.
   Cash Receipts and Payment Application
   Cash Receipt Id	The unique identification of cash receipt.
   Receipt Status	The status of the cash receipt. Options Supported: CREATED: Cash receipt is just created. CANCELED: Cash receipt is canceled. APPLIED: All the amount of the cash receipt is used and the Unapplied Amount becomes zero. PARTIALLY APPLIED: Cash receipt amount is not fully used and the Unapplied Amount is not zero. REVERSAL_STARTED: Reversal process of the cash receipt has just started. When you click Reverse Cash Receipt on the cash receipt page, a batch job in the background starts the reversal process. As soon as this batch job starts, the Receipt status changes to REVERSAL_STARTED. REVERSED: After the cash receipt is completely reversed and the Unapplied Amount = Receipt Amount, then the status changes to REVERSED. REFUND: Cash receipt is refunded.
   Receipt Amount	The received amount or the payment amount.
   Unapplied Amount	The unapplied (unallocated) amount that is used to make payments.

3. Scroll down to the Receivables Duesection, and select Auto Allocate or Manual Allocate.

   Note:

   For the next steps on the payment methodologies, refer to Payment methodologies.

4. Click Apply.

   • The Payments section in the Payment Application page shows a list of corresponding LPTs and their contracts for which the payments are made through this Payment Application.

   • In the Cash Receiptsection, if the Unapplied Amount field is zero, then the Receipt Status is APPLIED, otherwise, the Receipt Status is PARTIALLY APPLIED.

   • In the Payment Applicationsection, if the LPT is Cleared, then the Receipt Application Status is APPLIED.

The following image is an example of a payment application created:

Payment Methodologies

The payment methodology that you select for a payment application decides the order in which the dues are satisfied. CL loan supports the following payment methodologies:

• Manual Allocate

• Auto Allocate

Manual Allocate

You can manually allocate the amounts across the various loan receivables and loan non-receivables. However, it is not possible to allocate the amount toward a loan non-receivable without totally satisfying the balance of the receivables.

Steps

Perform the following step to manually allocate the amounts to the listed dues:

• Use the Filter in the Manual Allocate section to search for the dues toward which you want to allocate the amounts, and then allocate the required amount to each.

  Note:

  To know about the fields of the Filtersection, refer to the following table:

Auto Allocate

The system allocates the amounts using one of the following algorithms:

• Payment Spread

• Oldest First

Payment Spread

Using the Payment Spread algorithm, the order in which the dues are satisfied is as follows:

1. Receivables across all the loans in the order of their due dates (oldest to newest).

2. Non-receivables across all the loans in the order of their due dates (oldest to newest).

Example: Payment Spread

Suppose a cash receipt of $4000 is created which is auto allocated to two loans.  The allocation of the amounts is done in the order shown in the following table:

After paying all the bills (receivables) the remainder amount (4000- 3900) is used to satisfy the non-receivables.

Oldest First

Using the Oldest Firstalgorithm, the order in which the dues are satisfied is as follows:

1. Receivables across all the loans in the order of their maturity dates (oldest to newest).

2. Non-receivables across all the loans in the order of their maturity dates (oldest to newest).

Example: Oldest First

Suppose a cash receipt of $9000 is created which is auto allocated to two loans.  The allocation of the amounts is done in the order shown in the following table:

Out of $9000, $3900 is used to satisfy the receivables of both the loans. Loan 2 has the older maturity date so all the receivables of Loan 2 are satisfied before the receivables of Loan 1.

The remainder amount ($9000-$3900) is used to satisfy the non-receivables of Loan 2, and then the non-receivables of Loan 1.