When setting up Accounts Receivable options from the System Options table, you can choose to have the system automatically net a credit balance against open collections or receivables within the same customer account (customer code + billing profile). Advantage Financial maintains credit balance at the customer account level.
There are two types of credit balances:
Unreserved Credit Balance (normally from overpayment), and,
Reserved Credit Balance (normally from prepayment).
Only the unreserved credit balance can be automatically netted by the system. If the automatic netting option is turned on, unreserved credit balances will be automatically netted against outstanding receivables and collections when the automatic netting process is run. If the automatic netting option is not turned on, all credit balances are treated as reserved credit balances and no automatic netting occurs.
Since reserved credit balance, by definition, is a result of a payment that must be applied against a specific obligation, it should be maintained manually. You can also enter a Cash Receipt (CR) modification manually to reduce credit balance and reapply overpayment or prepayment.
If you want to reduce or eliminate a credit balance to a customer, you can also use a General Accounting Expenditure (GAX) transaction to issue a refund. Refunds can be done automatically or manually.
Depending on the options set on the System Options table, unreserved credit balances are refunded to customers automatically after a certain waiting period. When that period is up, the system automatically updates the Pending Credit Refund table with the customer’s information and their unreserved credit balance, and automatically creates General Accounting Expenditure (GAX) transactions that will generate payments for these customers. NOTE: This process generates transactions for refunds of unreserved credit balances only. Any other refund must be handled manually using this transaction.