Accounts Receivable > Processing Receivables > Customer Payment Statuses
  
Customer Payment Statuses
Payment processing is controlled by payment status codes. Different payment instruments follow different status sequences.The number of statuses you need depends on your particular implementation. At a minimum, you must have two statuses: Paid and Bounced. Typically, you also use a For Collection status for payments sent to the bank. The Initial status is used if you want to do an initial payment registration.
You can define an account for each status through which the payment is processed, or use one GL account to record the transitions. For example, if you are processing a draft through the Initial, Allocated, Accepted, For Collection, and Paid statuses, you can define a GL account of type Customer Payment for each status. This approach supports detailed reporting requirements.
Each status transition usually generates a posting, which updates the account associated with the status and bank or payment accounts. The posting information, including account and daybook details, is contained in the payment status definition.
While you can move a payment directly to the Paid status on creating it, this is not a typical approach. Note also that you cannot undo a Paid document. You must reopen the invoice manually with Open Item Adjustment.
Customer Payments Status Flow illustrates the status flows through which you can process the payment.

Customer Payments Status Flow
It is not mandatory to process a payment through all of the statuses described. Some European and South American companies use the interim statuses and customer and supplier payment accounts to log the progress of the payment. In this process, the last step constitutes creating a banking entry based on a bank statement. This step sets the payment to Paid and debits the bank account.
US organizations, however, generally do not require interim statuses, and sometimes use Initial, For Collection, and Paid statuses only. You can use Customer Payment Mass Change (27.6.4.5) to select payments with a For Collection status and change their status directly to Paid. This status change immediately updates your bank account, without the need to create a banking entry. See Customer Payment Mass Change.
You can also use Customer Payment Mass Change (27.6.4.5) to change any payment at any stage in the flow to Bounced or back to Initial. This is useful for payments that are sent directly to the bank once they are accepted, and are then refused by the bank.
You can also change a customer payment status to Paid automatically by importing a bank file using EDI Document Import and using Process Incoming Bank File. See Banking and Cash Management.
Customer Payment Statuses and Account Activity describes each payment status, and lists the postings created by status transitions.

Customer Payment Statuses and Account Activity
 
Status
Description
Account Activity
Debit
Credit
Initial
Initial payment status. The payment is in your system but does not generate any postings.
Not applicable
Not applicable
Allocated
The payment is received and is linked to open items. The transition to Allocated generates postings and sub-ledger updates.
Allocated Customer Payment account
Customer Control account
Accepted
The payment is signed by the relevant parties. When a draft is signed by a customer, you change the status of the associated customer payment to Accepted.
Accepted Customer Payment account
Customer Control account, if this is the first posting for the payment
Otherwise, the account associated with the previous payment status
For Collection
The payment is presented to the bank for immediate payment. Some examples of payments for collection include a check, a payment selection that is transferred directly to the bank, and paper transfers to the bank. A selection is automatically created when a payment status is changed to For Collection.
For Collection Customer Payment account
Customer Control account, if this is the first posting for the payment
Otherwise, the account associated with the previous payment status
Conditional Collection
The payment is presented to the bank conditionally, the condition being that a draft is honored by the bank before the draft due date. This status is followed by the Paid Conditionally status in banking entry.
The Conditional Collection status is also referred to as Discounted Draft.
Conditional Collection Customer Payment account
Customer Control account, if this is the first posting for the payment
Otherwise, the account associated with the previous payment status
Paid Conditionally
When a draft is discounted to the bank and the payment is conditionally received, change the payment status to Paid Conditionally. Payments are automatically be assigned this status when they are marked as Paid during banking entry and when their previous status was Conditional Collection.
Unlike other statuses, the Paid Conditionally posting does not transfer the amount from the control account linked to the previous status to the control account of the current status. Instead, it credits a liability account, which is backed out again when the status of the payment is changed from Paid Conditionally to Paid (final).
Bank account
Liability account associated with Paid Conditionally status
Paid
For payments coming from any status, except Paid Conditionally
The incoming payment amount has been paid. Individual Payments are either fully paid or not paid at all. The payments cannot be partially paid. A Payment Selection can be said to be partially paid if individual payments within it are bounced.
Bank account
Customer Control account, if this is the first posting for the payment
Otherwise, the account associated with the previous payment status
Paid
For payments coming from Paid Conditionally
The incoming payment was already posted on the bank account with the previous status Paid Conditionally and is now confirmed as final.
Liability account associated with the Paid Conditionally status
Conditional Collection Customer Payment account
Bounced
For payments coming from any status, except Paid Conditionally
 
The incoming payment, which was sent to the bank for collection, has been refused by the bank. The linked open items are re-opened and the invoice payment links are deleted.
Customer Control account
For Collection Customer Payment account
Bounced
For payments coming from Paid Conditionally
The incoming payment, which was sent to the bank for collection, has been refused by the bank. The linked open items are re-opened and the invoice payment links are deleted.
Liability account and Customer Control account
Conditional Collection Customer Payment account and Bounced Customer Payment account
For each of the different payment statuses, a specific GL account representing the status can be defined.