Payments

Processing Payments in Bench

The Payments feature in Bench allows you to record and track all incoming and outgoing payments for your business. This is a central hub for managing money received from customers and money paid to suppliers, ensuring your accounts are always reconciled and up-to-date.

Key Features

• Sequential Numbering: All payments are assigned a unique, sequential ID (e.g., PMT-0001) for easy tracking and reference.
• Payment Methods: You can define various payment methods, such as cash, bank transfers, or mobile payments, and link them to specific accounts in your chart of accounts.
• Automatic Allocation: When you apply a payment to an invoice or other voucher, the system automatically allocates the amount and updates the outstanding balance on the voucher.
• Multi-Currency Support: Payments can be made in a different currency from the company's base currency. Bench handles the currency conversion and exchange rate calculations automatically.
• Unallocated Amounts: If a payment is larger than the amount due on the allocated vouchers, the excess amount remains unallocated. You can later reconcile this amount or apply it to future vouchers.

The Payments Form

The payments form is divided into several sections to capture all the necessary details of a transaction.

Payment Details

This section records the fundamental information about the payment.

• Date: The date the payment was made or received.
• Method: The payment method used (e.g., Bank Transfer, Cash). This is a required field.
• Currency: The currency of the payment. This is automatically set based on the selected payment method.
• Amount: The total value of the payment.
• Supplier/Customer: The party (supplier or customer) involved in the transaction. You must select one or the other.
• Party Currency: The currency in which the party's account is maintained.

Vouchers

This is where you allocate the payment to specific outstanding documents.

• Payment Type: This field determines whether the transaction is an outgoing payment (Pay) or an incoming payment (Receive).
• Exchange Rate: If the payment currency and the party's currency are different, this field will show the exchange rate used for the conversion.
• Voucher Table: A list of vouchers (invoices, credit notes, etc.) to which you are allocating the payment.
  • Payment For: The type of document being paid (e.g., Sales Invoice, Purchase Invoice).
  • Voucher ID: The ID of the specific document.
  • Due: The amount currently outstanding on the document.
  • Allocated Amount: The portion of the payment being applied to this specific voucher.
  • Unallocated Amount: The remaining amount on the voucher after the payment is applied.

References

• Reference Number: A unique reference number for the payment, such as a check number or transaction ID.
• Memo: A text field for any additional notes or details about the payment.

How it Works

When you submit a payment, Bench performs the following actions:

1. General Ledger (GL) Entry: A general ledger entry is created automatically to record the transaction. For example, when you receive a payment from a customer, Bench debits your selected payment method account and credits the customer's account.
2. Voucher Updates: The allocated amount is subtracted from the outstanding balance of the corresponding voucher.
3. Unallocated Balance Tracking: Any amount not allocated to a voucher is tracked as an unallocated balance, which you can later apply to other documents or reconcile.

Unallocated Payments

If a payment is not fully allocated to a voucher, you can create a Payment Reconciliation record to manage the remaining unallocated amount. This is useful for dealing with prepayments, overpayments, or payments that cover multiple future invoices.