How to Use Customer Transaction Knock Off

Overview:

In accounting, "knocking off" customer transactions means applying payments, credit notes, or
advances to outstanding invoices, effectively reducing the amount owed. This process ensures that
your customer accounts are up-to-date and accurately reflect payments received, avoiding any
confusion or errors in accounts receivable.

QNE Software provides a Customer Transaction Knock Off feature that allows users to reconcile
customer payments against open invoices, credit notes, and advances. This helps businesses
maintain accurate records, improve cash flow, and keep track of outstanding balances.

Scenario:

Let's say your company receives a payment of ₱3,500 from a customer, ADVANCE TRADING
CORPORATION, who has several outstanding invoices. You need to apply this payment to the open
invoices while also using a credit note worth ₱500. The goal is to clear the customer’s outstanding
balance and ensure their account is up-to-date.

Procedure:

Follow these steps to use the Customer Transaction Knock Off feature in QNE Software:

Example 1: Partial Payment with Credit Note

ADVANCE TRADING CORPORATION has the following outstanding transactions:

• Invoice #1501: ₱4,000

• Invoice #1502: ₱2,500

• Credit Note: ₱500

• Payment Received: ₱3,500

1. Access Customer Transactions Knock Off

• Form the Navigation Pane, go to Account Receivable > Customer Knockoff
  
  
  

2. Select the Customer

• In the Customer dropdown, select the customer whose transactions you want to reconcile
  (e.g., ADVANCE TRADING CORPORATION).

• The system will display all open invoices, credit notes, and advance payments related to this
  customer.
  
  

3. Choose the Payment and Allocate Payments to Invoices

• Find the payments that the customer has made. These will typically show up as a list of payments that
  have been recorded.

• Select the payment you want to apply to the outstanding invoices.

• Start by selecting the first invoice that you want to settle.

• Enter the payment amount that should be applied to this invoice.

• If the payment is less than the full invoice amount, the remaining balance will remain open.

1. First, apply ₱2,500 to fully settle Invoice #1502.

2. Use the remaining ₱1,000 to pay off part of Invoice #1501.
   
   
   
   

• Repeat this for all relevant invoices until all payments are allocated.

4. Apply Credit Notes

• If the customer has an available credit note, you can use it to reduce the amount owed.

• Select the available credit note from the list and allocate the amount to the open invoice.

1. Apply the ₱500 credit note to reduce the remaining balance of Invoice #1501.

2. The final outstanding balance for Invoice #1501 is ₱2,500.
   
   

5. Review and Adjust Balances

• Double-check the amounts applied to ensure they match the outstanding invoices.

• Any remaining balance after the knock-off will either stay open (for future payments) or be
  cleared if no further action is needed.

6. Confirm and Save

• Once you're satisfied with the allocations, click Save to complete the process.

• The system will update the customer’s account, showing the cleared transactions and updated balances.
  
  
  
  

Example 2: Full Payment Without Credit Note

Another customer, BEST TECH ENGINEERING, INC, has the following:

• Invoice #2010: ₱7,000

• Payment Received: ₱7,000

1. Open the Customer Transactions Knock Off

2. Select the Customer

3. Choose the Payment and Allocate Payment to Invoice

• To knock off the payment:

1. Apply the full ₱7,000 to Invoice #2010.

2. Invoice #2010 is now fully settled, and no balance remains.
   
   

4. Review and Adjust Balances

5. Confirm and Save
   
   

Application:

By using the Customer Transaction Knock Off feature, you ensure that customer accounts are always
accurate, payments are correctly applied, and any credit notes or advances are used efficiently,
keeping your accounts receivable process streamlined and error-free.