Allocate Credits

uCollect works to automatically initiate payments on your due invoices.  One of the scenarios that can complicate this nice automation is credits.  If a client has a credit on file uCollect does not know whether it is allowed to apply the credit to the invoice before we process payment.  This can result in the full invoice amount being collected even though there was a credit available that could have reduced the amount of the collection.

You need to tell us whether to automatically apply credits when processing collections.  This feature is switched off until activated by you.  You can set this as a default value in the Payment Gateway settings (each gateway can have different options set) as well as as controlling this in the contact settings.

Xero Handling

In Xero there are three different types of credits.  You must specify which types of credits you want to automatically apply:

• Prepayments
• Overpayments
• Credit Notes

It is not uncommon to receive an advance payment for a particular invoice, and you would not want this to be applied against other invoices.  We recommend using Xero's Prepayment feature to record this type of payment, and to NOT activate the Allocate Credits for Prepayments in uCollect.  This way we will not automatically allocate these credits, but you will have to remember to do so before the payment is due (or we will collect the entire amount).

Quickbooks Online Handling

Quockbooks online already has an option to automatically allocate credits when invoices are created (Settings, Advanced, Automation).  In uCollect you can switch on Adjustment Notes handling, but not Unallocated Payments.

Setting up your default handling

You can set your default handling in the Payment Gateway settings.  As each contact can only be assigned to a single gateway, it will automatically inherit the allocate credits setting from the gateway when initially assigned.  The gateway default settings will also affect the Pay Now screen for that payment type (if applicable).

To set your default settings:

1. Go to Edit, Payment Gateways, and click the edit icon for the desired gateway.
2. Find the "Automatically Allocate Credits (default for new customers)" toggle and switch it on.
3. For Xero users, select which credit types you want to automatically apply (they are all on by default).
4. As you set/unset each option you will be asked whether you want this to be applied to all existing contacts.  If you click "OK" then this setting will be pushed to all contacts currently assigned to this gateway.

Contacts will inherit the gateway setting for Allocate Credits when they are assigned to the gateway.  If you want to override these settings you can do so in the Edit Contact dialog, gateway tab.  Find the "Automatically Allocate Credits" section.  It the toggle is off you can switch it on and choose which credits (for Xero users) you want to allow or disallow.

If you have Automatic Collection switched on for API gateways, then the Allocate Credits routines runs at the very start of the batch process.  If we detect that there are eligible credits (based on the allowed credit types for that contact) AND invoices eligible for collection for that contact, then we will automatically allocate that credit to the oldest eligible invoice first (based on invoice date), moving to the newest.  If this results in the eligible invoice(s) being fully paid then those invoices will not be processed for collection. Here are some technical details on how we do this:

• You must have invoices due for collection to trigger the allocation process.  We won't allocate credits unless you have invoices eligible for collection.  But once the allocation process has been triggered all invoice (unless suspended) are eligible to be offset.
• If an invoice is suspended it will not participate in the credit allocation process.
• If you are using Reminders, we will not send a reminder if it there is an eligible credit that will offset this invoice.  If that changes (i.e., the credit is allocated against another invoice) then the reminder will be sent in the next cycle and the reminder window will be enforced.
• If you have any Installment Plans setup for invoices and there are credits available to allocate, any available credits will be allocated first, and then installment plan will be executed.  If the invoice is now fully paid then the installment plan will be cancelled.  If there is still a balance due then the installment plan will be executed (to the lower of the planned installment amount or the balance due) as normal.
• If you have Automatic Payments enabled for a contact that has credits available then credits will be allocated first, and then the Automatic Payment rules will be implemented. If the credit results in no balance due for the contact then the ending rules will be executed.

How Credits are handled during Process Now

When you manually run a collection batch using Process Now you get a bit more control over the process.  

if you choose "Include All invoices" then the routine will run and allocate credits following the rules above for Automatic Collection.  Please note that Batch Upload gateways are always processed under the Process Now rules so credits will not be allocated until the Process Now function is activated.

If you choose "Selected" then credits will be included in the list of invoices.  If you select a credit and an invoice then the credit will be offset against the selected invoice(s) (oldest first).  If you select invoices and no credits, then the credit will not be allocated and will remain available for the next batch.

Currently credits do not impact the Pay Now screen.  Users will be presented with only invoices available for payment and credits are not displayed.