This article is relevant if you seek to apply customer payment amounts that have been previously unapplied.

Background

A reader contacted me asking for help with modifying the customer payment screen. They wanted to have inline edits for invoices and credits. As I asked more questions about the requests, I learned they had trouble editing customer payment records and applying funds further.

The situation emerges when a customer sends a payment, but the recipient (accounting staff) is having trouble determining how to apply the cash to open transactions. I spoke about these situations in previous articles. In my
Early Warning NetSuite Past Due Invoice Notifications article, I reference Out of Sequence, Unidentified Invoices and Partial Payments as general cash receipt patterns. And there is the NetSuite Practice to Account for Unknown Customer Cash Receipts article.

Yet, this request was different. The user simply wanted to edit the existing Customer Payment (cash receipt) and continue to apply cash. That seems reasonable, given how NetSuite appears to work on other transactions.

NetSuite’s Customer Payment Record Idiosyncrasies

The Customer Payment record behaves in ways that are not necessarily intuitive. Yet, once you understand what it can do, it opens opportunities for cash receipt processing.

NetSuite’s Customer Payment record applies cash receipt logic against open debits (typically invoices) and open credits (typically credit memos) without respect to whether you have fresh money in hand. Let me explain.

Unapplied Customer Payments are Open Credits

Using this Customer Payment record, we get one shot to apply cash against other transactions (non-debits or credits and deposits) as we intend. When we accept cash receipts and do not apply the full amount to open debits (e.g., invoices), the amounts that were not applied (unapplied) fall into the open credit category.

This means that the unapplied amount as a credit can now be applied again to open debits (e.g., invoices) in a new payment transaction.

Zero Dollar Customer Payment to Apply Credits to Debits

Once you understand that you can use the Customer Payment record, you can strategize an approach. If you now know how you want to apply the previously unapplied cash receipt, here is what to do (click related images for additional guidance):

1. Create Zero Dollar Customer Payment: create a new zero-dollar customer payment record. Make sure that the Payment Amount field stays at zero ($0.00) as you work the record; be careful because clicking on sublist transactions may modify the Payment Amount field without you realizing it.
2. Apply Invoices, Credits, and Deposits: use the sublists to take amounts in the Invoices (debits), Credits and Deposits (another form or credit) sublists to apply to each other. The goal is that the sum of the applications nets to zero.
3. Commit the Customer Payment Form: now commit the customer payment form. You may need to reference a bogus payment method and check number. Not to fear, so long as the Payment Amount is zero, NetSuite will NOT create another payment record.  Note, the below consideration about taking discounts and zero payment amounts.
4. Review Net Result: you can double-check your work. Your invoices and credits should now be applied to each other — verify by referencing the respective invoice-related records. Furthermore, if you search for the Customer Payment record that you thought you created, it should not exist; if it does exist, the Payment Amount likely has a non-zero dollar value.

Considerations for NetSuite Customer Cash Receipt Processing

When I shared how to solve this with the reader, they responded wanting to delete the Customer Payment record and apply it again. While it is possible to do this, consider that a) the accounting period may be closed properly locking the record, and b) the Customer Payment record may already sit as part of a Bank Deposit record. Hence, I don’t recommend the delete record method.

Zero Payment Amounts and Discounts Taken

Our consultant, Jenn M., pointed out that there are times when a Zero Payment Amount will create a payment record.  If you take discounts, even if the payment amount is zero, there will be a record.  This may confuse some folks where sometimes there is a record and other times there is not.  The real consideration for a record being saved is if the effort will result in GL impact.  Click the image for an example.

Contemplate Customer Deposits for Unknown Cash Receipt Challenges

An alternative for handling incomplete cash receipts is using the Customer Deposit record. If you realize that you can’t apply cash according to how the customer paid you, create a floating Customer Deposit record — floating means that you do not reference a sales order as it will lock that customer deposit payment to be paid only with invoices generated from the sales order. You can then perform the procedure above separately when you have the full story for applying the cash.  Or you can use the Deposit Application record to apply the customer deposit to other transactions.

For the uninitiated, using customer deposits may be troublesome as it credits a liability account, not the accounts receivable account.  Thus it has different financial presentation aspects.   I have written many articles on NetSuite customer deposit processing.

CSV and Scripted NetSuite Cash Receipt and Customer Payments

NetSuite will allow you to import CSV files to apply cash. But it won’t allow you to access that unapplied amount easily. The CSV import approach appears limited to only apply to invoices. When you try to reference credit memos and other transactions, you likely will get the “Unable to find a matching line for sublist apply with key: [doc,line]” error message. My team has been frustrated by this — and others in the community have expressed similar sentiments.

That naturally leads us to consider using SuiteScript. We can do this from scratch. But why? In my 2020 article, Fully Automate Complex NetSuite Data Imports, I discuss a free-of-license-charge framework (called Record Import / Export Manager — RIEM) that is perfect for this challenge. In other words, according to our liking, we can shape the CSV file to reference all the respective invoices, credits and deposits and effectively apply cash.

This same CSV import technique can help when you desire to apply cash where you have many invoices, and the user interface is simply too cumbersome to work with.  Think of this when you are using a cash lock box approach or when our approach for How To Apply Cash from Excel Directly to NetSuite just won’t cut it.

Finally, for those that want to roll their own NetSuite script, see my article, Get SuiteScript 2.0 to Apply NetSuite Credit Memos to Invoices for inspiration as it uses the Customer Payment Record to do the work to apply those credits and link those transactions together.

Work with NetSuite Accounting and Scripting Leadership

This article is a great example of how, since 2008, we have developed specialized NetSuite knowledge in accounting practices [yes, having CPAs on staff does make a difference].  Yet, we go further by helping our clients leverage our specialized no-cost tools to enhance productivity. These tools are developed by a group of NetSuite technology experts that are deep on the platform — our clients repeatedly share that our solutions are elegant and offer genius.

If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you have a NetSuite cash receipt challenge that needs to be solved, let’s have a conversation.

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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