Open Items, Allocation and Ageing

An open item is an invoice, debit note, payment or credit note on a receivables or payables control account that has not yet been fully settled. Allocation records which payment cleared which invoice; ageing shows how long what is still owed has been due. Both are on Ledger & Finance, and both read the same allocations, so they always agree.

Where to find it

Admin Panel → Finance:

Ledger & Finance — the Open items tab (allocate and change due dates) and the Ageing tab (aged debtors and creditors)

Architect Panel → ERP - Finance:

Allocations — which payment settled which invoice, as a datastore

How items get there

An item appears when something posts to an account whose Control account for is Sales ledger control (AR) or Purchase ledger control (AP), with the customer's or supplier's reference as counterparty. Sales invoices, supplier bills, receipts recorded from the bank feed and manual journals with a counterparty all qualify. Customer receipts and supplier payment runs are covered with order to cash and purchase to pay; this tab is the ledger's own view of them.

Allocating a payment

Open Open items. Under Ledger choose Receivables (customers) or Payables (suppliers), and pick the Counterparty (or Everyone).
Under Payments and credits waiting to be allocated, press Use this payment on the receipt, payment or credit note.
Under Invoices and debit notes still open, press Settle on each invoice it pays. The amount to allocate is filled in; change it for a part payment.
Read the summary: what is being allocated, and what is left on the payment.
Press Allocate. Allocation records which payment cleared which invoice. It never moves money.

When a foreign-currency invoice is settled at a different rate from the one it was raised at, the summary shows the realised exchange difference, and it is posted to the account with the Realised exchange gains and losses role. Without that role the allocation is refused, naming the role.

Undoing and due dates

Recent allocations lists the 50 most recent. Undo makes both the payment and the invoice open again and reverses any realised exchange difference posted with it.
Press Change beside an open item's due date when terms are renegotiated. Give the New due date and a Reason (recorded). The amounts never change; payment runs, reminders and the ageing follow the new date.

Ageing

Open Ageing and choose Aged debtors or Aged creditors.
Set Buckets (days past due), ascending and comma-separated, for example 30,60,90.
Read each customer or supplier across Not yet due and the buckets, with the total and the oldest due date. Ageing is by days past the due date, as at the date at the top of the console.
Select a row to see its open items, and export when you need the list elsewhere.

What goes wrong

A receipt not listed: it was posted without the customer's reference, or to an account that is not a receivables control account.
The ageing has no due dates: items posted without a due date age from nowhere. Set the due date, or make sure your document binding supplies one.
Allocation refused for exchange: give an account the Realised exchange gains and losses role on the chart.

Worked example

A customer pays 3,000.00 against two invoices of 1,800.00 and 1,500.00. The credit controller chooses the customer, presses Use this payment, settles the first invoice in full and 1,200.00 of the second, and allocates. The ageing now shows 300.00 on the second invoice in the 30 days bucket. The customer then agrees to pay the balance at month end, so they change its due date with the reason "Customer agreed to pay at month end".

Recommendations

Allocate as receipts arrive. An unallocated receipt leaves invoices looking unpaid and the ageing wrong.
Record the reason for every due-date change; it is the audit trail for the change of terms.
Agree bucket boundaries with credit control and keep them the same month to month.
Set the realised exchange role before the first foreign-currency settlement.