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Administrator Guide
Last Updated: 2023-06-23
Setup Considerations: Overpayments

Setup Considerations: Overpayments

You can use this topic to help make decisions when planning your configuration and use of overpayment functionality. It explains:
  • Why to set it up.
  • How it fits into the rest of Workday.
  • Downstream impacts and cross-product interactions.
  • Security requirements and business process configurations.
  • Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.

What It Is

Overpayment functionality enables you to write off small balances when:
  • When you apply a payment.
  • After you apply a payment that has on-account balance.
When you record an overpayment Workday creates a new journal entry to credit the ledger account defined in the account posting rule with the on-account amount.
This feature doesn't track overpayment by invoices.

Business Benefits

The overpayment functionality:
  • Eliminates the manual steps to record and apply invoice debit adjustment.
  • Improves global tax compliance and auditing capabilities.
  • Enables you to identify customer overpayments easily.

Use Cases

When you receive a payment that is greater than the invoice amount, the overpayment functionality enables you to:
  • Record, apply, and put the additional amount on account in 1 single step during the payment application.
  • Record an overpayment by accessing the
    Record Overpayment
     task from the related actions menu of the payment.
You can also:
  • Cancel an overpayment.
  • Add an approval step to the overpayment event business process to limit the overpayment amount. When you record only a portion of the on-account amount as overpayment, after the overpayment event completes, the on-account amount reduces.
  • When an on-account amount reaches zero:
    • Payment status changes to
      Complete
      .
    • Application status changes to
      Fully Applied
      .

Questions to Consider

Question
Considerations
Do you want to write off an overpayment at the payment level?
When you have an existing payment with an on-account amount, then you can use the
Record Overpayment
 task to write off the amount.
How do you calculate an overpayment on a transaction where the payment currency and company currency are different?
Workday uses the transaction currency to calculate the overpayment amount. When the company and customer payment currencies are different, Workday populates the
Overpayment Currency Rate
 for the overpayment date on the
Record Customer Overpayment
 task.
You can override the rate but doing so can cause a foreign exchange gain or loss.
What happens if you cancel or unapply a customer payment?
Workday cancels all associated overpayments.

Recommendations

  • Add attachments or notes when you're recording an overpayment because you can't change or edit overpayment information afterward.
  • Click
    Submit
     to record an overpayment on the
    Apply Customer Payment
     task.
  • Configure condition rules on the overpayment business process to set approvals based on the overpayment amount.

Requirements

  • Create at least 1 overpayment reason.
  • Configure the
    Receivables Overpayment
     account posting rule (APR) to set up the ledger account to record overpayments. You can configure the APR using these dimensions:
    • Company
    • Company Hierarchy
    • Receivables Overpayment Reason
  • Specify a worktag while recording an overpayment on the
    Apply Customer Payment
     task if you've worktag balancing.
In addition, ensure:
  • The total overpayment amount is less than the on-account amount.
  • The Payment status is
    In Progress
     and application status is
    Applied with On-Account
     for you to record an overpayment.
  • Overpayment date is on or after the customer payment date.

Limitations

You can't process overpayments for:
  • Credit adjustments.
  • Write-offs at invoice level.
  • In flight refunds with full on-account amount.
  • Canceled payments.
  • Payments with journal in error.
When an approver denies a payment application, any associated overpayment event terminates and you have to create a new overpayment.
When you cancel or unapply a customer payment, all associated overpayments also cancel.
You can't cancel an overpayment if:
  • The approver denies the overpayment.
  • The associated payment is returned or unapplied.

Tenant Setup

No impact.

Security

Users with access to these domains can set up, manage, and record overpayments:
Domains
Considerations
Set Up: Receivable Overpayment
 in the Common Financial Management functional area.
These domains enable you to use the:
  • Maintain Receivables Overpayment Reasons
     task.
  • View Receivables Overpayment Reason
     report.
  • Get Receivables Overpayment Reasons
     web service.
  • Put Receivables Overpayment Reason
     web service.
Process: Customer Overpayment (Parent Domain)
 in Customer Accounts functional area.
Process: Customer Overpayment - Cancel
 in Customer Accounts functional area.
Process: Customer Overpayment - Core
 in Customer Accounts functional area.
Process: Customer Overpayment - View
 in Customer Accounts functional area.
These domains enable you to access these tasks and reports:
  • Cancel Customer Overpayment
  • Edit Customer Overpayment
  • View Accounting for Customer Overpayments
  • View Customer Payment Overpayment
Reports: Customer Overpayment
 in Customer Accounts functional area.
Enables you to access the:
Customer Overpayment
 report data source.
Customer Overpayment for Company Filter
 data source filter.

Business Processes

Business Process
Considerations
Customer Overpayment Event
To enable approvals for specific overpayment amounts, you can add the
Customer Overpayment Event
 business process step to the existing
Customer Payment Event
 business process.
If the approver denies the overpayment event, the overpayment status updates to
Rejected
. Restart the process and create a new overpayment.
Customer Payment Application Event
Workday cancels all associated overpayments when you:
  • Cancel a customer payment.
  • Unapply a customer payment.
Consider these as you configure the
Customer Overpayment Event
 business process:
  • When an approver denies the
    Customer Payment Application Event
     business process, and you've recorded overpayments, the
    Customer Overpayment Event
     business process also terminates.
  • When both the business processes have the same approver, Workday approves the overpayment and the customer payment application in 1 single step.

Reporting

You can use these Workday delivered reports to view the overpayment data:
Reports
Considerations
View Customer Payment for Invoices
Enables you to view the overpayment information on the
Customer Overpayment Activity
 and the
Payment History
 tabs.
Customer Activity Details
Enables you to view a
Customer Overpayment
 transaction at the line level.
Customer Activity Summary
Includes a
Customer Overpayment Total
 column that you can click to drill down for overpayment details.
Customer Balance Details
Includes a
Total Approved Overpayment
 column that enables you to view the sum of all overpayment amounts.
Customer Balance Summary
Includes an
On-Account Payments
column that includes overpayments in the calculated amount.
You can drill down on the column to view the total overpayment amount.
Find Customer Payments
Includes an
Overpayment Amount
 column.
Receivables Financial Aging Detail Report
Enables you to view:
  • Balance in the transaction currency.
  • Balance in the company currency.
  • Customer overpayment.
  • On-account amount.
  • Original payment amount in the transaction currency.
When the customer payment status is
Complete
 and the application status is
Fully Applied
, the payment doesn't display on the report.
Receivables Aging Summary by Financial Aging for Accounting Period
Enables you to view the overpayment amount when you drill down on the
On-account Payments
 column.
Receivables to Customer Balances Reconciliation
Includes customer overpayment amount in the On-Account Payments drill down column.
Receivables to Customer Balances Reconciliation Exception Summary
Includes a
Difference in Company Currency
 column that automatically calculates customer overpayments.
You can use the
Customer Overpayment
 report data source in custom reports to view attachments for customer overpayments and determine:
  • An Overpayment currency conversion rate.
  • Remaining amount on account when you record an overpayment.
  • Total amount of the approved customer overpayments.
  • Whether an overpayment exists for a customer payment.

Integrations

Use these web services to upload, retrieve, or edit overpayment reasons data and view customer activity:
  • Get Overpayment Reasons
  • Put Overpayment Reason
  • Get Customer Activity
Use these web services to retrieve, record, or cancel multiple overpayments at once:
  • Cancel Overpayment
  • Get Customer Overpayments
  • Submit Customer Overpayment

Connections and Touchpoints

Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.