I'm very green with Adagio. Can anyone tell me the difference between an account that is set up as "Balance Forward" or "Open Item"? I have a cash account that is completely out of whack. When applying a payment, it doesn't seem to know where to apply itself to. One suggestion was maybe that it is set up as a "Balance Forward" account and it should be set up as an "Open Item" account. Also, when I go to apply payment, it refers to "Unposted" instead of "Invoice". Would that be because it is set up as a "Balance Forward" account? Thank you.

Hi Ali,

The main difference with 'Balance Forward' versus 'Open Item' type customers is how invoices are paid, and how statements print. Indeed if you don't have the option to apply a payment to whichever invoices you want, the customer is likely set up as a Balance Forward customer.

- With Balance Forward type customers, one typically doesn't care which specific outstanding invoices are to be paid - if there are $5000 worth of outstanding invoices and the customer sends a check for $3000, you don't apply the payment to individual invoices but the collection as a whole. Posting the payment then pays the oldest invoices first.

You can choose to apply the entire payment to a single invoice on file or an 'unapplied payment' (UP) for an invoice number that is yet to be recorded. You cannot apply portions of the check to a group of desired set of invoices.

After each time you print statements, all unpaid invoices are lumped together into a 'Balance Forward' amount.

- With Open Item customers, all invoices are handled individually. You have to specifically pay each invoice when a payment is received, rather than applying it to the account in general. There is greater flexibility but a little extra work to pay each one. With Adagio Receivables, you only need to press the space bar to apply payment to an invoice, so it's not too difficult.

You also can apply payment to UP invoices - as many as you want, not just one.

Statements will print outstanding invoices with individual information for as long as they are outstanding. They will not be lumped together.

Hope this helps, and others reading this may have other suggestions or comments for you.

So when I revert this account back to a Open Item customer, will it "correct" everything and apply payments where they should be applied?

You first have to post/delete all batches before you are able to change this Balance Forward setting on the customer to Open Item. But once this is done and the change is made, you will see Cash Entry immediately change to allow selection of paying particular invoices.