Applying Payments

If a person has multiple subsidiary accounts and sends in a payment, you must decide how to apply that payment.

The illustration below shows three subsidiary accounts.

If this student sends a check for $4,000, how would the payment be recorded? A policy might be chosen (such as receipting priority) that says the undergraduate subsidiary is paid first, the graduate subsidiary is second, and the continuing education subsidiary is last. In that case, the check would be recorded with a $3,200 credit to the AU subsidiary and an $800 credit to the AG subsidiary (shown below).

By specifying a payment priority, the system knows how to apply payments automatically. (The Receipt Entry window will distribute a payment if you enter the entire check amount.) The payment priority allows you to easily create credits to multiple subsidiary accounts. As you consider using multiple subsidiary accounts, consider the "pecking order" for your payments. If the payment priorities are complex (i.e., they contain many conditions or exceptions), you may want to reconsider the structure of your subsidiary control accounts.