RIO Challenge v4 - C06.11 - Order Payment By Sequence

Every Transaction Payment record has a ‘Transaction Type’.

If multiple Transaction Payments are applied to the same Transaction Line Item at the same time, there is a sequence to determine which Transaction Payment is used first, based on the ‘Transaction Type’.

This is the default sequence as configured in the custom metadata type ‘Payment Transaction Type Config’.

This prioritizes using the Transaction Type with lower sequence numbers.

For example, you may have 2 Transaction Payment records of different ‘Transaction Type’ - Credit Note (sequence #2) and Payment (sequence #5).

If both are applied at the same time against a Transaction Line Item, the ‘Credit Note’ type will be used first to pay it off.

Only if there is still outstanding amount, then, the ‘Payment’ type will be used.
 

Follow this exercise to understand how Transaction Payments get applied in sequence, based on their ‘Transaction Type’.

Learning outcomes

1. Understand how Non-Financial Aid Payment type with specific sequence, type is applied against the Transaction Line Item. 
2.  Understand how Financial Aid Payment type with specific sequence, type is applied against the Transaction Line Item. 

What does success look like?

1. Able to apply payment based on sequence and payment setting configured in the transaction orders. 

Related challenges

• C06.10 - Order Payment Application
• C06.12 - Prepayment Transaction

Estimated time to complete

25 minutes.

Steps to complete the challenge

A student named Fred Smith has several types of Transaction Payments in his account:

• A regular Payment that he has made.
• A Credit Note, i.e. a refund given by the university which can be used to offset against future fees.
• A repayable Financial Aid.
• A non-repayable Financial Aid.

As a finance officer, you will be able to manage these Transaction Payments and which one gets applied first against new fees (Transaction Line Items).

1.  Click on the 'RIO Challenge v4' tab at the bottom left of the page. Click on 'Initiate Challenge' to generate the data required for this challenge.
   
   
    
    
2.  Go to the ‘Contacts’ tab, and select the list view ‘C06.11 - Order Payment By Sequence’ to find the record created for this challenge.
   
   
    
    
3.  Click on the ‘C06.11 - Fred Smith' contact and navigate to the ‘Transaction’ tab (If not visible click on More > Transaction).
   
   This is where you can find the Transaction Orders (i.e. fees) and the Transaction Payments related to this student.
   
   
   
    
   
    
4.  Notice that there are 4 Transaction Payment records in Fred Smith's account, each with a different ‘Transaction Type’.
   
   
   i) A regular Payment that he has made worth $500, that is applicable to all types of fees.
   
   ii) A Credit Note worth $2,000, but only applicable to tuition fees.
   
   iii) A repayable Financial Aid worth $3,000, but only applicable to tuition fees.
   
   iv) A non-repayable Financial Aid worth $2,000, but only applicable to tuition fees.
   
   
   
   
   
    
5.  Let's apply these against Fred Smith's fees.
   
   Under the same ‘Transaction’ tab on Fred Smith's Contact record, open the 1st Transaction Order record (Reference = C06.11 Order 1) and note the Transaction Order # number “TRO-000XX” as we will use that number later.
    
   
    
6. Financial aid is not to be used to pay this Transaction Order.
   
   This Transaction Order is to be settled using payments only.
   
   
   Therefore, ensure that the "Apply Payment" checkbox is set to TRUE.
   
   This means that only the Payment and Credit Note transaction types will be applied here.
   
   
   
   
   
    
7. Under the ‘Related Records’ tab, create a new Transaction Line Item to bill Fred Smith for tuition fees.
    
   
   
    

8. Then confirm the Transaction Order by updating the Status to “Confirmed”.
   Notice that once you update the Transaction Order Status to “Confirmed”, payments are applied immediately.
   
   Since this Transaction Order has only the "Apply Payment" checkbox checked, it will only use the Payment and the Credit Note.
   
   Between Payment and Credit Note, the sequence is such that the Credit Note will be used first.
   
   
   
    
   
    
9.  To review it in more detail, you may open the 2nd Transaction Line Item.
   
   Then, if you click on the ‘Transaction Payment’ field to open that record, you will see that it is the one with the ‘Credit Note’ type.
    
   
    
10. Let's create another Transaction Line Item, this time for miscellaneous fees. 
    
    Return to the Transaction Order from step 7 (Reference = C06.11 Order 1).
    
    Update the Transaction Order Status back to “Submitted” as we would not be able to create new Transaction Line Items while it's in “Confirmed” status.
    
    Then, create a new Transaction Line Item as follows.
    
    
     

11. Then confirm the Transaction Order by updating the Status to “Confirmed”.
     After updating theTransaction Order status, payment is applied automatically.
    
    However, the Credit Note is not used to pay it off this time.
    
    Instead, the regular Payment was used, even though Credit Note is meant to be used first according to the sequence.
    
    
     
    
    This is because the Transaction Line Item you recently created was of the ‘Miscellaneous’ type.
    
    
    So, even though the Credit Note is meant to be used first, it cannot be used since it's only applicable to ‘Tuition’ type.
    
    Therefore, the Payment is used instead, since it is applicable to all types.
    
    
    
    
    
    This means that even though there is a sequence in which Transaction Payments are to be applied, it will also depend on whether it can be applied to the particular item types.
    
    
    
     
12.  Let's create another new Transaction line Item for tuition fees again. 
    
    Make sure you are viewing the Transaction Order (Reference = C06.11 Order 1).
    
    And once again, update the Transaction Order Status back to “Submitted” as we would not be able to create new Transaction Line Items while it's in “Confirmed” status.
    
    Then, create a new Transaction Line Item as follows.
    
    
     

13. Then confirm the Transaction Order by updating the Status to “Confirmed”.
    Again, payment is automatically applied once the Transaction Order status is updated.
    
    This time, the Credit Note is used, because it can be applied towards tuition.
    
    Since the Credit Note still has a balance of $1,000 remaining (the other $1,000 was already used in step 8), it is applied here.
    
    
    
    
    
    
     
14. We have seen how Payments and Credit Notes are automatically applied to pay off Transaction Line Items, according to their sequence.
    
    Now, let's see how Financial Aid are automatically applied according to their sequence.
    
    
    Return to the Contact for ‘C06.11 - Fred Smith’ and navigate to the ‘Transaction’ tab.
    
    
    
    
    
    
     
15. Open the 2nd Transaction Order record (Reference = C06.11 - Order 2) .
    
    Then, under the ‘Related Records’ tab, create a new Transaction Line Item for tuition fee. 
     
    
    
     

16. Then confirm the Transaction Order by updating the Status to “Confirmed”.
    Notice that even after updating Transaction Order status, no payment is automatically applied.
    
    This is because the Transaction Order does not have any payment settings defined.
    
    Therefore, flag both the ‘Apply Non Repayable FA’ and the ‘Apply Repayable FA’ checkboxes as TRUE together. 
    
    
    In other words, all types of Financial Aid are to be applied at the same time.
    
    
     
    
     
17. Notice that payments are automatically applied in sequence.
    
    Based on the record number, you will notice that the Non-Repayable Financial Aid ($2,000) is applied first, since it is higher in priority following the sequence.
    
    Only once it is fully used, then, the Repayable Financial Aid ($3,000) will be used.
    
    
    
    
    
    This means that when it comes to Financial Aid, non repayable ones will be used first as long as there is still remaining balance.
    
    
    
     
18. In conclusion, the application of Transaction Payments depends on these factors:
    
    
    i) The Transaction Payment's  ‘Applicable Item Type’
    
       - A Transaction Payment can either apply to all item types, or, can only be used against specific item types.
    
       - See this exercise here.
    
    
    
    
    
    ii) The Transaction Payment's  ‘Transaction Type’    +    ‘Prepayment Transaction Type Config’ custom metadata type
    
       - Each Transaction Payment record will have a ‘Transaction Type’ value that can be set.
    
    
    
    
    
       - The custom metadata type ‘Prepayment Transaction Type Config’ will define the sequence of each ‘Transaction Type’ to use first.
    
          By default, the sequence is as seen below here, but you can modify this according to your requirement.
    
    
    
    
    
    iii) The ‘Payment Settings’ configured on the Transaction Order.
    
       - These 3 checkboxes on the Transaction Order allows you to decide what types of Transaction Payments should be applied here.
    
    
    
    
    
    
     
19. Congratulations, you have completed the challenge! Click on the 'RIO Challenge v4' tab at the bottom left of the page, and click on 'Complete Challenge'.