Methods of Distributing Receipts Among Open Items

When payments are receipted and your organization is using Open Items, you have several methods of distributing the amount of the payment among those items with a balance due:

Manual Distribution

The manual method of distributing receipts among open items allows you to select the open item(s) to which you want the payment applied rather than having the monies distributed automatically.

A right-click option (Select Open Item ) on the Receipt Entry Detail window opens the Select Open Item window where you can select an open item to which the payment can be applied. The total amount applied to the open items must equal the Cash Tendered amount in order to Save.

Priority Distribution

The payment is divided among charges based on a pre-defined Receipting Priority assigned to the fee codes, indicating which charges should first be paid, etc.

The amounts are calculated as follows:

1.    The amount due of the fee with the lowest numbered receipting priority is subtracted from the receipt amount (Cash Tendered).

2.    The amount of the transaction will be the charge balance or the payment amount, whichever is lower.

3.    If there is money remaining after the first transaction, the program takes the remainder and applies it to the second fee.

4.    It continues this process until it reaches the end of the list or until it has applied the entire payment to the charges.

For example, assume that a student has the following three charges outstanding: $1200, $2250, and $35. You have set your receipting priorities to have Tuition paid first (10), Room and Board second (20), Graduation Fee third (30), and Library Fine fourth (40). The following table details the student's open items with the receipting priority.

The student sends a check for $3200. According to the receipting priority, the Tuition of $2250 is paid first, which leaves a balance of $950. The remainder of the payment ($950) is applied to the Room and Board of $1200. The new balances of the open items are as follows:

Proportional Distribution

The payment is divided and applied to charges in the same proportion as the charge amount to the net amount due.

Each payment amount is calculated as follows:

1.    The total amount due for the fees is divided by the receipt amount (Cash Tendered) to arrive at a percentage.

2.    This percentage is then multiplied by the receipt amount to get the proportional distribution amount for that charge.

For example, assume that a student has the following three charges outstanding totaling $80: $20, $25, and $35. The student sent a check for $70. The following table details how the payment amount for each item is calculated:

The new balances of the open items are as follows: