Allow Over application simply means "You are asking the system to over apply the amount than what is actually due on the invoice"
Here is Reader query :
What hapens if credit memo is applied after the receipt is applied full for an AR Invoice .
Billing is done via third application ( Billing data is interfaced to AR) and cash application is done via Oracle AR. What-if i creat a credit memo against that invoice in source Billing system and interfacing that to AR, ...
Can credit memo be applied to AR invoiced which are already applied with receipt fully?
Two scenario likely to happen :
We can not credit an invoice which is fully applied, if "Allow Overapplication" is not checked.
If it can be applied how is the accounting treatment happens in this case i.e. what
When we over apply an invoice then invoice will be left with a negative balance (in case allow overapplication is checked"
Allow Overr aplication checked means it will allow uys to attach a receipt more than the invoice amount.
Eg: If the invoice amount is 100 and the receipt associated with the invoice is 120.If the allow overapplication is checked it will allow us to attach this invoice against the receipt .
The invoice amount will be changed to negative from Positive in this case once the receipt is applied