Difference between unapplied receipts and receipts on account

First lets start with Unapplied. An Unapplied receipt is one where the customer who submitted payment has been identified but the receipt has not been applied to a specific transaction or placed On Account. From a technical perspective, the status of the receipt remains open and the amount_applied NULL in AR_PAYMENT_SCHEDULES because the amount has not been applied to a customer balance. Furthermore, the applied_payment_schedule_id and applied_customer_trx_id are NULL in AR_RECEIVABLES_APPLICATIONS table because the receipt has not been applied to a specific transaction. There is no GL transaction in this case to reduce the amount of the Receivables account.

When you place a receipt On Account, you are then reflecting a credit for the receipt amount and subsequently debiting a Receivables account and crediting a Revenue account. You would supply the distribution lines for On Account credit since these would not be provide by any specific transaction. The appropriate lines are then created in RA_CUST_TRX_LINE_GL_DIST for these distributions.

The advantages to either scenario just depend on your business need to include or exclude receipts that have not been linked to a specific transaction, in your Receivables account balance.

Also, most reports that include receipt information give you the option to include or exclude both Unapplied and On Account receipts. This assists with reconciliation of account balances. There are also various places in the application where you can choose to include Unapplied amounts. For example, when printing dunning letters, Include Unapplied Receipts check box in the Dunning Letter Sets window, affects whether these receipts are actually printed on your dunning letters. In relation to printing statements, if there are on?account or unapplied receipts that are not associated with a specific customer location, Receivables summarizes these receipts as credits on consolidated statements that you produce by defining a statement site.