When a customer deducts bank charges from a payment, Cash Application automatically accounts for the difference while ensuring the invoice is settled for its full value.

Example

• Invoice Amount: $1,000.00

• Payment Received: $998.00

• Bank Charges Detected: $2.00

In this example, the customer has deducted $2.00 as bank charges before making the payment.

Configuration

Before Bank Charges can be posted, the following configuration is required.

Configure the Chart of Account that should be used for bank charges.Example:Bank Charges Account: Bank Charges 001

Journal Entries can include ERP segments. For example, the following segments may be configured:

• Location

• Class

Segment values are determined for each payment using business logic (for example, based on the receiving bank account or legal entity). If a value cannot be determined for a segment, that segment is left blank in the Journal Entry.

ERP posting behavior

When the payment is posted, Zuora Billing performs the following actions:

A customer payment for $1,000.00 is created and applied to the invoice. Although only $998.00 was received, the payment is created for the full invoice amount so that the invoice is completely settled.

A separate Journal Entry is created for the bank charges. The Journal Entry:

• Posts $2.00 to the configured Bank Charges Chart of Account.

• Includes the configured segment values, if available.

• Uses the exchange rate effective on the payment date.

• Uses the same exchange rate source configured in the ERP's Billing module.

Result

The following records are created in the ERP:

• A Customer Payment for $1,000.00, applied to the invoice.

• A Journal Entry for $2.00 against the configured Bank Charges account.

This ensures that:

• The invoice is fully paid.

• Bank charges are recognized as an expense.

• No residual balance remains on the invoice.

• Exchange rates remain consistent with the ERP's Billing configuration.