Clearing Transactions

The clearing transaction payment type is provided in the Payment Entry and Application Conversation to clear debit memos and credit memos.

Clearing a credit memo or a negative debit memo against an open item reduces the amount due on that open item.  The resulting amount due for the cleared negative debit memo or credit memo is zero.  You can close a negative debit memo or credit memo by clearing it against an invoice, positive debit/credit memo, or finance charge.  (Check and write-off payment types can only be applied to documents with positive balances.)

In addition, you can close negative debit memos or credit memos by netting them against positive documents when applying a check payment.  This netting of positive and negative documents is allowed as long as the overall result is still positive.

Clearing transactions are zero balance transactions; the positive amounts applied must equal the negative amounts applied.  Thus, the clearing transaction amount must be completely applied before the transaction is ended.  For this reason, clearing transaction documents have a document amount of zero.

Procedures to Enter and Apply a Clearing Transaction

A clearing transaction affects a credit memo.  A clearing transaction clears the credit memo and reduces the unpaid balance of one or more open items (invoices, debit memos, and finance charges).  Credit memos may also be applied at the same time as another payment application.

When a clearing transaction is entered on the Payment Header screen, the payment amount displayed is zero:

·      Clearing a credit memo amount (and reducing a positive open item balance by the same amount) brings the credit memo amount to zero.

With the following exceptions, the entry and application of clearing transactions are the same as the entry and application of checks.

No part of a clearing transaction can be placed on account.  Therefore, the place on-account processing control field on the Payment Header screen is invalid.  Also, F23-End Transaction/On-Account, is invalid.

The apply to oldest processing control field on the Payment Header screen is not allowed.  In addition, the write-off remainder and write-off amount fields on this screen are invalid.