When the bank sends a bank file to notify you that it has received payment from your customers, the system creates a new payment with the status For Collection or Paid. If you select the Create New Payments as Paid field in Process Incoming Bank Files, and then process the bank file, the payment is created as Paid. Otherwise, the system creates the payment with the status For Collection. When the payment status is For Collection, the banking entry process is used to set the payment status to Paid.

The system allocates the payment to the relevant invoice or invoice stage using the unique 10-digit internal reference number. The system creates journal entries for the full payment allocated to the invoice.