How does the Uncollected Payment Type work?

Overview

In situations where you need to process a rental return from a cash customer without immediately receiving the payment due, you can use a payment type code of U for Uncollected in the rental return program. When the payment is actually received, use the Uncollected Account Payment program to enter it.

Setup

There are several control records to setup so that you can use this functionality:

CSHSTS

Use this control record to set the default code that a cash customer's status changes to when you enter a payment type of U for Uncollected during a rental return transaction. When payment is eventually received from the customer and entered via the Uncollected Account Payment program, the customer's status changes back to what it was before the uncollected transaction.

For example, you could use the control record to have the system set a cash customer's status to H for Hold or B for Bad Debt (recommended) when a payment type code of U is entered at the time that customer returns equipment.

RACCIP

Use this control record to indicate what type of test the system should perform for cash customers with regards to uncollected amounts. You can set the system to warn you that a cash customer has an uncollected amount when you are using Create Rental or Update Rental. A message displays at the bottom of the screen, but you can still process the transaction for the customer. You can set the system to display the same message, but perform a hard halt (the recommended setting) and not allow processing of rental-out transactions for a cash customer with an uncollected amount. You can also set the control record to not perform a test at all for uncollected amounts. You would not receive any message when creating or updating a rental-out transaction for a cash customer with an uncollected amount.

CASHAR

Use this control record to enter the number of the Accounts Receivable customer account the system posts to when an uncollected cash transaction is processed. A separate account number is typically set up for each location, so that A/R personnel who only have access to information in their location can review uncollected amounts that are only related to their location.

For example, for location 0001, you could enter a customer account number of 9900001 with the last four digits being the location designation. When a payment method code of U-Uncollected is entered during a rental return for a cash customer at location 0001, the amount that was not collected is posted to customer 9900001. All uncollected amounts for location 0001 can be viewed via Customer Invoice Inquiry for customer 9900001.

Use Customer Master Maintenance to create the customer master record for the account number you enter in the CASHAR control record.

NXTUPB

Use this control record to set the starting and ending batch numbers for the system to use when it automatically creates a cash receipt batch after the Uncollected Account Payment program is used to process a cash receipt from a customer for an existing uncollected amount.

The Process

When a cash customer returns equipment on a rental contract, and they do not pay the amount due immediately upon return, you can process an uncollected amount for that customer and contract so that the equipment can be made available for other rentals. On the final screen of the rental return, enter a payment type of U for Uncollected and complete the return. Entering the U payment method code causes a debit to the Accounts Receivable account for the uncollected amount, and it credits the applicable revenue accounts such as, equipment, damage waiver, environmental fee, and so on.

Depending on how you have set the control records discussed above, the transaction might cause that cash customer to go on hold or show as a bad debt customer (recommended setting), and users might see warning or error messages when attempting to process further rental transactions for that customer. Also, the uncollected amount posts to the A/R customer account number you set up in control record CASHAR.

When the cash customer sends payment for the uncollected amount, use the Uncollected Account Payment program to enter the cash receipt. The system automatically creates and posts a cash receipts batch in Accounts Receivable for the amount received. When the system posts the batch, the Accounts Receivable account is credited and your Cash on Hand account is debited. The system also marks the appropriate invoice as paid on the uncollected customer account (9900001 in our example).

The cash customer's status returns to what is was before the payment method code of U was used. The cash receipt from the customer displays as a payment for the A/R customer account number set in CASHAR when viewed via Customer Invoice Inquiry.