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Sparkrock's Customer Success Center

Setting Up Payment Tolerance

Overview

There are instances when the amount paid to a vendor differs slightly from the amount invoiced. This is often the case when applying currencies against each other. The difference in payment can be either an underpayment or an overpayment. These amounts may often remain open and eventually have to be canceled out by other means.

Your system can be set up to handle these small differences automatically, rather than requiring manual clearing.

  • Using payment tolerance allows the closing of an entry even if there is a difference between the amount owed and the amount paid.
  • Payment tolerance percentage, payment discount grace period, and the maximum payment tolerance amount can be set. It can be set so that you receive a warning when making an application within the payment tolerance parameters that have been set.
  • These differences can be set to different amounts or percentages, to keep track of amounts and the frequency. Different payment tolerances can be set up for different currencies.
  • Payment tolerances can be set on the receivables side as well as the payables side. Thus, payment tolerance can apply to invoices and payments as well as credit memos and refunds. Customers and vendors can be blocked for payment tolerances.

In Sparkrock 365, two types of payment tolerance exist.

  • Payment Discount Tolerance – Taking a payment discount even though the payment discount date has passed.
  • Payment Amount Tolerance – Paying a slightly greater or smaller amount as full settlement of an outstanding invoice. In the program, payment amount tolerance is called Payment Tolerance.

Set Up Tolerance

As a default, payment tolerance is allowed for all customers and vendors.

General Tolerance Settings

If you do not want to allow payment tolerance for specific accounts:

  1. Turn on the Block Payment Tolerance slider on the Payments FastTab of the Customer and Vendor cards and this will disable payment tolerance for those accounts.
  2. You can reactivate payment tolerance for any previously blocked customer or vendor by turning off the Block Payment Tolerance slider on the Customer or Vendor cards.
    Note: In each instance, you will be prompted to choose whether to apply or remove payment tolerance on open entries.

Setting Specific Tolerance Settings

To set up payment tolerances:

  1. Log in to Sparkrock 365.
  2. Click Tell Me and search for General Ledger Setup. Select the page from the drop-down list.
    The General Ledger Setup page displays.

    general_ledger_setup.png
  3. From the Action Bar, click (More Options) then Actions > Functions > Change Payment Tolerance.
    The Change Payment Tolerance page displays.

    change_payment_tolerance.png
  4. To allow payment in multiple currencies, turn on the All Currencies slider.
  5. Alternately, to configure payments for a particular currency, select the currency from the Currency Code list.
  6. Specify the payment tolerance percentage in the Payment Tolerance % field.
    The system will allow a tolerance % specified up to the max tolerance amount.
    Note: The Payment Tolerance Warning slider on the General Ledger Setup page's Application FastTab determines whether you receive a warning when posting tolerances, and where the tolerance amounts post to.
  7. Click OK.

Setting the Payment Grace Period

To set a payment grace period:

  1. Click Tell Me and search for General Ledger Setup. Select the page from the drop-down list.
    The General Ledger Setup page displays.
  2. Expand the Application FastTab.
    General_Ledger_Setup_Application_FastTab.png
  3. In the Payment Discount Grace Period field, specify the number of days that a payment or refund can pass the payment discount due date and still receive a payment discount.
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