Commercial Payments and Accounts
ARL Webinar: Open Payment Credits on Statement of Account (SOA)
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Date: Wednesday May 10 and 17, 2017
Time: 12:30 pm – 2:00 pm, Eastern Daylight Time
Meeting Number: 550 071 281
SOA Credit History Context
- Introduction of Offsetting
- Initial Introduction of Payment Credits
- Current State
- Reasons Why Payment Credits Might Exist
Introduction of Offsetting
- Prior to August 20th 2016 cheques were issued for adjustments and drawbacks.
- On August 20th, offsetting was introduced. Two pools of credits were available for reconciliation:
- Refund credits displayed in the other transactions section
- Payment credits not displayed on the SOA
- This resulted in an incomplete reconciliation on the SOA
Re-Introduction of credits on August 25, 2016
- As part of the offsetting changes and to avoid an incomplete reconciliation, payment credits were added to the SOA.
- The changes were not sufficiently communicated and many Trade Chain Partners were confused.
- An amended SOA was sent August 26th where the payment credits were again supressed.
August 25 Payment Credits Included | August 26 Payment Credits Suppressed |
---|---|
Transactions: ($-329.18) | Transactions: $2,434.12 |
Other Charges (due): $0.00 | Other Charges (due): $0.00 |
Total Payable: ($-329.18) | Total Payable: $2,434.12 |
Current State
- Calculated Grand Total added to SOA
- Opening Balance added to Broker SOA
- Broker Clarification list activities conducted to balance accounts
- Improvements to payment processing, payment allocation and reconciliation procedures
- Improved understanding and documentation on PAS and RES documents
- Reconciliation of importer payments where possible.
- Account Balance Overview Reports
- Remaining credits require trade chain partner input/consultation
Reasons Why Payment Credits Might Exist
- Payment of K84 or payment of reference K84
- GST and Importer Direct Security (IDS) amounts were included in SOA totals however B2s were not.
- Confusion re: RES and PAS resulting in payments being misapplied
- Importer payments for GST or IDS debt may have been incorrectly indicated on the RES and applied as a broker payment.
- Overpayment of broker to not "use credits on importer accounts"
- Payments for the period's transaction total and not the total payable were made
- Totals for SOA incorrectly calculated (pre-Grand total field)
- Summed the totals due for all importers resulting in a net overpayment.
- Cashiers couldn't allocate the residual
Impacts on the SOA
- Clearing Rules Overview
- Reconciliation Timeline
- Scenarios
Clearing Rules Overview
Generally speaking, payments will be applied against an account in the following order:
- Dishonored payment fees (NSFs) of $25 and other charges;
- Administrative K23 charges;
- Penalties (K9, LAP and NPA);
- Interest charges for overdue accounts; and
- All other transactions due during the month.
Debit - Broker A | Debit - Broker B | Debit - Importer/Consultant/ G or I tagged |
---|---|---|
Credit - Broker A Clears |
Credit - Broker A Does not clear |
Credit - Broker A Does not clear |
Credit - Broker B Does not clear |
Credit - Broker B Clears |
Credit - Broker B Does not clear |
Credit - Importer/Consultant Does not clear |
Credit - Importer/Consultant Does not clear |
Credit - Importer/Consultant Clears |
Reconciliation Timeline
Day of Month | ARL Activity |
---|---|
25 (Start of New Period 1) | Statement of Account (SOA) is generated for previous period |
31 | SOA Payment is due for previous period (last day of the month) |
16 | Manual disbursements are processed |
17 | Large/inactive credit report is run |
18 | Auto disbursement job is run |
19 | Manual review of disbursement exception list |
15 – 23 | Clearing run for previous periods transactions, up to and including the last day of the previous month and must occur before all disbursement runs |
24 (End of Period 1) | Clearing run for all transactions up to and including the last day of the current period |
25 (Start of new Period 2) | Statement of Account (SOA) is generated for previous period |
SOA Headings | Pre May Logic | Post May Logic |
---|---|---|
Month 1 – Opening Balance | $0 | ($5,000) |
Month 1 – Transactions | $3,000 | $3,000 |
Month 1 – Other Transactions | ($2,000) | ($2,000) |
Month 1 – Total Payable | $1,000 | ($4,000) |
Payment | ($1,000) | $0 |
Month 2 – Opening Balance | $0 | ($4,000) |
Month 2 – Transactions | $4,000 | $4,000 |
Month 2 – Other Transactions | ($2,000) | ($2,000) |
Month 2 – Total Payable | $2,000 | ($2,000) |
SOA Headings | Pre May Logic | Post May Logic |
---|---|---|
Month 1 – Opening Balance | $0 | ($5,000) |
Month 1 – Transactions | $3,000 | $3,000 |
Month 1 – Other Transactions | ($2,000) | ($2,000) |
Month 1 – Total Payable | $1,000 | ($4,000) |
Payment | ($1,000) | $0 |
Disbursement | $2,000 | $2,000 |
Month 2 – Opening Balance | $0 | ($2,000) |
Month 2 – Transactions | $4,000 | $4,000 |
Month 2 – Other Transactions | $0 | $0 |
Month 2 – Total Payable | $2,000 | $2,000 |
SOA Headings | Pre May Logic | Post May Logic |
---|---|---|
B2 – Due May 26 | $2,000 | $2,000 |
Payment – May 24 | ($2,000) | ($2,000) |
Opening Balance | $0 | ($2,000) |
Transactions | $4,000 | $4,000 |
Other Transactions | $2,000 | $2,000 |
Total Payable | $6,000 | $4,000 |
SOA Headings | Pre May Logic | Post May Logic |
---|---|---|
Security | $250,000 | $250,000 |
Payment – May 15 | ($250,000) | ($250,000) |
Opening Balance | $0 | ($250,000) |
Transactions | $500,000 | $500,000 |
Other Transactions | $0 | $0 |
Total Payable | $500,000 | $250,000 |
SOA Headings | Pre May Logic | Post May Logic |
---|---|---|
Month 1 Broker SOA Total Payable | $6,700 | $6,700 |
Broker Payment | ($6,700) | ($6,700) |
Importer Payment (for Broker Transactions) | ($6,700) | ($6,700) |
Month 1 – Total Payable | $1,000 | ($4,000) |
Month 2 – Opening Balance | $0 | ($6,700) |
Month 2 – Transactions | $10,000 | $10,000 |
Month 2 – Other Transactions | ($2,000) | ($2,000) |
Month 2 – Total Payable | $8,000 | $1,300 |
May 25th SOA Scenarios
- Large Credit on GST or IDS Importer
- Large Credit on Standard Importer
- Large Credit on Broker ASEC
Scenario 1 - Large Credit on Broker SOA for GST or IDS Importer
- Likely caused by K84 or PAS issues
- Send email to CARM inbox identifying:
- Broker ASEC
- Importer RM number
- GST or Importer Direct status
- Use the Subject line: OPENING BALANCE\[ASEC]\MAY 2017
- Resolution may require copies of the PAS/RES as well as importer cheque numbers.
- Remit the total payable for the importer.
- If post payment adjustments result in past-due amounts, associated penalties and interest will be waived.
Scenario 2 - Large Credit balance on Broker SOA for a 'standard' importer
- Generally caused by overpayments to importer accounts
- Send email to CARM inbox for verification
- Use the Subject line: OPENING BALANCE\[ACCOUNT #]\MAY 2017
- Once the cause of the credit is determined corrective actions can be proposed.
- Remit the total payable for the importer.
- If post payment adjustments result in past-due amounts, associated penalties and interest will be waived.
Scenario 3 - Large Credit Balance on Broker ASEC account
- Account identified at the top of Broker SOA with a Blank RM or 000000000RM0000
- Result of an incorrect grand total calculation.
- Submit email to CARM inbox with the ASEC # and total credit amount
- Clarification may be required to determine cause of overpayment.
- Post clarification the amount may be applied against grand total
- Remitting payment for a net credit balance in scenario 1 may trigger this in a subsequent month.
Contact Information
Contact us online : Client support contact form
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