Customer Credit Applications
Customer credit applications let you offset a customer's existing documents against each other, without any new money coming in or out: use a credit note, a cash receipt or an advance/prepayment to cover one or more open invoices, or cross an invoice against a debit or credit note that cancels it out. It's the tool for "squaring up" a customer's account statement when the balance is already sitting in different documents, in your favor or theirs.
What is it and what is it for?
Unlike a Cash Receipt, which records new money coming into your company, a credit application doesn't move money: it only reclassifies balances that already exist across a customer's documents. Use it, for example, when the customer has a pending advance or credit note and you want to apply it against one or more invoices, or when two of the customer's documents cancel each other out (for instance, an invoice and a credit note for the same amount).
You can apply one document's credit across several documents at once, and in different proportions: for example, cover part of an invoice with an advance and the rest with a credit note. Each line indicates the amount you want to move: a positive value increases what's already applied to that document (reducing its open balance), and a negative value decreases it (increasing its open balance). The sum of every amount on the application must be exactly zero, because you aren't creating or destroying balance — only moving it from one document to another.
When you save it, and if your company uses the Accounting module, the system automatically posts the accounting entry with the corresponding movement on the customer's receivable account, including any exchange-rate or rounding difference when the applied documents are in different currencies.
Screens in this area
| Screen | What it does |
|---|---|
| Application list | Lists every registered credit application, with filters by customer, date, subsidiary and sales rep. You can customize the visible columns and save your configuration. From here you create, delete or open the applications report. |
| Create / Edit | The application form: customer, subsidiary, date and reference, followed by the table of the customer's open documents where you check which ones to offset and for how much. It includes the file-attachments tab. |
| Details | The same application in read-only mode, with the list of affected documents, their original amounts, their balance and the amount applied to each, plus the action buttons: edit, duplicate, void, delete, print and view the accounting entry. |
| The printable format of the application, with your company's and the customer's data, the table of offset documents and space for signatures. |
How to record an application step by step
- Open the list and click Create. You need the "add" level of the Cash Receipts permission; if you don't see the button, ask your administrator for access.
- Select the customer and, if your company has subsidiaries enabled, the matching subsidiary. The system defaults the date to today and, if your company uses a single cash account or currency, fills it in automatically.
- Enter the period to search and click Refresh to load the customer's open documents (invoices, credit or debit notes, cash receipts and advances) within that range. Period is a single date-range control: when you open it you can pick a relative period such as "This month" or set the from/to dates on the calendars, and leave it empty to see documents from all dates.
- Check the documents you want to offset. When you check a document, the system automatically proposes its open balance as the amount to apply; you can edit it if you only want to apply part of it.
- Adjust the amounts until the Difference field reaches zero. Use positive amounts on the documents you want to settle (or partially pay down) and negative amounts on the ones you want to leave with more open balance.
- Save. The system validates the data, updates the open balance of every affected document, and posts the corresponding accounting entry.
Key fields
| Field | What it's for |
|---|---|
| Customer | Whose documents you're offsetting against each other. It can't be changed once the application has active accounting records linked to it. |
| Subsidiary | Which subsidiary the application belongs to, with subsidiaries enabled. Every document being offset must belong to the same subsidiary as the header, and it can't be changed when editing. |
| Date | The application's date. It must fall within an open accounting period and cannot be earlier than the date of any document being applied. |
| Document search range | A temporary filter used only when creating or duplicating, to narrow down which of the customer's open documents show up in the table before you check them. |
| Documents to apply | The table where you check each invoice, credit or debit note, cash receipt or advance to offset, along with its reference open balance. |
| Amount to apply | How much of that document's balance you want to move. Positive to reduce its open balance, negative to increase it; the sum of every line must be zero. |
| Currency and exchange rate | If the applied documents are in different currencies, the system converts each amount to the main currency using its exchange rate to validate that the total sums to zero. |
| Reference | Free-form text to note the reason for the offset; it can be filtered on the list. |
| Internal notes | Free-form information visible only to your team, useful to explain why the offset was made. |
| Attachments | Supporting documents for the offset, subject to your plan's file limit. |
Validations when saving
- Customer required.
- At least one document with a non-zero amount.
- The sum of the applied amounts must be exactly zero (converted to the main currency when the applied documents are in different currencies).
- Each applied document must exist and not be void, and must be a document type valid for Accounts Receivable.
- Each document's subsidiary must match the application's subsidiary.
- Each document's customer must match the application's customer, except when the document is a journal entry posted to the customer's receivable account.
- Each applied document's date cannot be later than the application's date.
- The applied amount cannot exceed the document's open balance, if your company enabled that additional validation.
- Open accounting period for Accounts Receivable on the application's date.
- The document number cannot repeat within the same document type.
- The customer, currency and exchange rate cannot be changed when editing if the application has active linked records.
- Ledger accounts must not be reconciled yet for the application to be editable, if your company uses bank reconciliation on those accounts.
Managing the document
From the details of an already-saved application you can, depending on your permissions:
- Edit it: you can add or remove documents and adjust amounts, but not change the customer or the subsidiary.
- Duplicate it to create a new application from its data.
- Void it: reverses the effect on the open balance of every document it had offset, leaving them as they were before.
- Delete it: just like voiding, it releases the balance of the affected documents; it can't be deleted if it has active linked records.
- Print it, using the default format or a custom template.
- View the associated accounting entry, if your company uses the Accounting module.
Additional features depending on your setup
- Subsidiary column on the list and subsidiary field on the form, if your company has subsidiaries enabled.
- Fiscal document (NCF) column on the documents table, if your country uses electronic invoicing.
- Custom fields on the form, if your company configured them for this screen; you can also create new fields directly from the form.
- Form customization (adding, moving or removing fields), if you have the matching permission.
Availability and permissions
- Access is controlled by the "Cash Receipts" permission of the user group, with separate levels for view, add, edit, delete and void.
- Available on AdmCloud plans that include the Sales / Accounts Receivable module. On the Enterprise plan, it requires the Sales module to be active.
- With subsidiaries enabled, each application is tied to a subsidiary and can only offset documents belonging to that same subsidiary.
- The fiscal document (NCF) column only shows up if your country handles fiscal documents for the documents you're offsetting.
Tips and common mistakes
If the "Difference" doesn't reach zero, you won't be able to save. Check that the positive and negative amounts you entered offset each other exactly; with multiple currencies, remember the validation is done in the company's main currency.
Don't confuse this screen with Cash Receipts. No new money comes in here — you are only reclassifying balances between documents that already exist. If the customer is paying you, record a Cash Receipt instead.
Voiding or deleting an application releases the balance of every document it had offset, which go back to being open for the amount they had before the application.