Assigning Receipting Priorities to Subsidiary Codes

The Receipt Entry function allows you to type one amount and automatically credit several subsidiary accounts.

For example, Tom Wise has the subsidiary accounts and balances as shown below.

The system uses the Receipting Priority column to determine the order that payments will be applied to a student's accounts. Your organization has a policy that a payment will be applied to tuition, room and board, graduation fee, registration fee, and activities fee (shown in the table below).

The value in the Receipting Priority column can be up to three numeric characters. The lowest numbered priority in the list will receive the first payment transaction. In this case, "A/R - Tuition" receives the first transaction since it has the lowest number. It is important to note that a blank (zero) receipting priority places the subsidiary account at the end of the list . The transaction amount will be the subsidiary balance or the payment amount, whichever is lower. If there is money remaining after the first transaction, the program takes the remainder and applies it to the second subsidiary account on the list. It continues this process until it reaches the end of the list or until it has applied the entire payment to the subsidiary accounts.

The Receipt Entry program distributes the payments only to those subsidiary accounts with debit balances. The Receipting Priority column is only applicable if you want the Receipt Entry window to distribute payments to subsidiary accounts. You may choose to leave all priority codes zero and distribute payments manually.

Examples

Assume Tom Wise sends a check for $4,000. The $4,000 payment is entered, and the program attempts to apply the money to one or more subsidiary accounts. It goes to the highest priority account first--in this case, the A/R - Tuition account. The program creates a credit to the account for the payment amount or for the account balance, whichever is smaller. It makes a $3,200 credit to the A/R - Tuition account.

The program applies the payment to the subsidiary balance with the highest priority. That reduces the A/R - Tuition subsidiary balance to $0. The program takes the remaining $800 ($4,000 - $3,200) and tries to apply it to the second highest priority account. In this case, it creates an $800 credit to the A/R - Room and Board account. Now there is no money remaining from the payment, so the program has completed its task.

The program applies the rest of the payment to Tom Wise's subsidiary balances. These transactions result in the new subsidiary balances shown below.

The payment eliminated the tuition balance and reduced the balance for room and board.

The A/R Receipts program distributes the payments only to those subsidiary accounts with debit balances. Therefore, the tuition subsidiary and graduation fee subsidiary will receive no more payment transactions unless their balance goes above zero again. The next payment will be applied to the room and board subsidiary, the registration fee subsidiary, etc.

The Receipting Priority column is only applicable if you want the receipting windows to distribute payments to subsidiary accounts. You may choose to leave all priority codes zero and distribute payments manually.