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Administrator Guide
Last Updated: 2026-03-13
Concept: Customer Payments

Concept: Customer Payments

When you receive a customer payment, you can:
  • Record the payment and deposit it.
  • Apply it to customer invoices or invoice adjustments. During payment application, you can:
    • Apply the full amount or partial payment and place the balance on account.
    • Apply or override defaulted discount amounts.
    • Unselect all invoice and invoice adjustments in the payment application grid.
    • Write off full or partial invoice amounts.
  • Record overpayment and place it on account.
After submitting the payment, you can:
  • Unapply the full payment and edit it to make corrections.
  • Cancel the payment if it's in error before the deposit is reconciled.
  • Return the payment that's already deposited in the bank.
When you cancel payments:
  • Pending payments are no longer available for settlement.
  • Workday no longer includes those payments when you print checks or generate the bank file for completed settlement runs.
  • If you already printed the check or sent the bank file, canceling stops those payments. Ensure to void the check using the
    Record Voided Checks
     task.
When you cancel or return payments, Workday generates journal entries to reverse the original payments, unapplies them, and makes the invoice available again for payment application. You can access the
Find Payments
 report to view issued and canceled payments in a single location and reconcile your payments.
You can configure cash balance checking to prevent outbound payments from processing when you have insufficient funds. See Steps: Configure Advanced Cash Balance Checking.
You can use these tasks to perform the various actions:
  • Record Customer Payments
  • Mass Record Customer Payments
  • Apply Customer Payment
  • Auto-Apply Customer Payments
  • Create Customer Deposit
  • Create Customer Refund
When you have payments with large volumes of remittance lines, you can use the web services to upload them, and then process using the
Auto-Apply Customer Payments
 task.
On the
Auto-Apply Customer Payments
 and
Schedule Auto-Apply Customer Payments
tasks, you can processes payment applications with:
  • Customer invoice credit adjustments that include prompt payment discounts.
  • Customer invoices with negative amounts that include prompt payment discounts.

Mass Record Customer Payments

When you need to record large amounts of payments coming in at once, you can process them with the
Mass Record Customer Payment
 task. Use this task when the payments reference only 1 or a few invoices each. You can record payments for different customers as well.
Keep in mind that the task only records payments, and doesn’t apply them. Therefore, Workday doesn't create operational journals. If you want Workday to create operational journals to record the cash, you can create a deposit as part of the task. Workday then creates the journals from the deposit.

Surplus Customer Payment

When you receive excess funds from a customer, you can record the amount as:
  • On-Account Balance: on the payment header when you don’t know which invoices to apply the excessive payment amount to. This amount is recorded as a liability on your general ledger but is based on your account posting rules. You can also process a refund for the balance. The payment stays in progress with Applied On Account status. This doesn’t show the details of where the overapplication goes except for the specific customer.
  • On-Account Amount in the Payment Application grid for an invoice line which generates an On-Account Document (OAD) that is tied to the specific invoice and its associated with the bill-to-customer. For this transaction:
    • The payment is marked as complete and fully paid.
    • The amount is held as a credit for future invoices and you can apply manually, automatically, unapply, or refund it as needed.
    • Include the OAD in customer statements to communicate the credit information with the customer.
    • You can add an on-account amount for:
      • Positive customer invoices.
      • Consolidated customer invoices.
      • Customer invoice rebills.
      • Debit invoice adjustments, when the applied amount is equal to the amount due and you don’t apply write-offs or discounts to the adjustments.
      • When you over-apply an intercompany invoice, Workday automatically assigns the company from the applied invoice to the newly generated On-Account Document (OAD), ensuring accurate accounting of the credit.
    • Workday doesn’t support on-account amounts when the selected invoice:
      • Has a write-off or discount.
      • Is a negative or zero-amount customer invoice.
      • Is a credit invoice adjustment.
      • Is fully paid.
      • Is an intercompany invoice with regular or optional worktag balancing enabled.
  • Overpayments: To write off a small, immaterial credit balance that is not practical to track, apply, or refund.
    • To process overpayments, you must configure the Overpayment business process.
    • You can’t apply overpayments to future invoices.
    • The funds have to be recognized as income.
    • To reverse the write-off and return the funds to an on-account status, you must cancel the payment from the Customer Payment Overpayment related actions menu. When you cancel a customer payment, Workday automatically cancels all associated overpayments.
    • When you enter an overpayment amount, Workday uses machine learning to display recommendations for the overpayment reason, as well as the cost center and location worktags.

Intercompany Payments

Workday enables you to centralize the receipt of customer payments so that a single company can pay invoices for its related companies. A company can receive payments from a customer on behalf of other related companies, and pay their invoices. This functionality makes it faster and easier for you to recognize the receipt of payments and accelerates the cash remittance to banks. However, Workday doesn't support payment application for on-behalf-of payments and write-off transactions that include invoices with term discount.
Setup for intercompany payments:
  • Use the
    Process: Customer Invoice
     domain security policy to enable your accounts receivable specialist to see more details of another company invoice.
  • For companies to have intercompany relationships, select
    Initiate Allowed
     in the
    Edit Company Intercompany Profile
     task.
Other areas of Workday that support intercompany payments include:
  • The
    View Accounting for Customer Transaction
     report contains an
    Intercompany
     tab that displays intercompany accounting lines, including payables and receivables.
  • Customer statements give a description of payments to or from another company, if applicable.
  • To process intercompany payments when worktag balancing is active for either company, ensure that the company paying on your behalf uses the same currency as your company, invoice, and payment currency.
  • To find invoices in other companies, use
    Same Bill-To
     or
    Remit-From - By Company
     prompt categories on these tasks:
    • Record Customer Payment
    • Apply Customer Payment

Zero-Amount Payments

You can record and apply customer payments with a payment amount of 0. This helps you clear multiple open invoices and adjustments that aren't tied in a single transaction.
When you apply an amount of 0, Workday creates a customer payment with a payment status of
Complete
 and application status of
Fully Applied
.
When you record zero-amount customer payments, you can't:
  • Record a deposit.
  • Have a different payment and invoice currency.
  • Enter the remittance advice information.
  • Select the payment for auto-apply.
When you apply zero-amount customer payments, you can't:
  • Record overpayments.
  • Place an amount on account.
If you don't want to record customer payments with a payment amount of 0, you can create custom validations for
Customer Payment
 on the
Maintain Custom Validations
 report.
Workday doesn't support this functionality on the
Put Customer Payment
 web service.

Customer Payments and Deposits from Bank Statements

You can also record customer payments and deposits directly from bank statement lines. You must configure customer payment rule sets to define the criteria for mapping the bank statement line to the customer payment. You can then link the rule sets to a bank account. When you record a bank statement, and run the
Schedule Customer Payment from Bank Statement Line
 job, it checks if the bank statement line matches the defined rules.
  • Each bank statement line creates 1 payment and 1 deposit.
  • When a company is enabled for gapless sequencing for customer invoices, you can define a customer payment rule set to identify a Remit-From Customer found in the bank statement line based on either an exact match or from invoice prefixes.
  • Exceptions for gapless payment matching:
    • If remittance advice text excludes leading zeros, the matching job will fail to find the gapless invoice number.
    • If multiple invoices with different Bill-To Customers are found, the invoices will populate but the customer field will remain blank for manual entry.
    • Enabling gapless sequencing causes the system to ignore standard invoices during the bank statement matching process.

Payment Transfers

Payment transfers record the customer payment application activity and don’t generate accounting. Workday saves these transactions as either
Payment transfer In
 or
Payment transfer Out
 depending on the customer that you run the report for. You can access the
Customer Activity Details
 or the
Customer Activity Summary
 report to view the details. Intercompany invoices don't generate payment transfers.
Payment transfers happen when the payment application is for invoices where:
  • The
    Remit-From Customer
     is different from the payment customer.
    • For example, under Company A, you record a customer payment where the
      Remit-From Customer
       is
      John Doe
       but you apply this payment to
      Customer
      Bluemoon
      .
    • Payment Transfer Out
      : When you access the
      Customer Activity Summary
       report for John Doe and click the value in the
      Payment Total
       column, Workday displays a transaction details grid with 2 rows for each payment transaction. One row displays the
      Transaction Type
       of
      Payment
      , including
      Payment Amount
       and the associated
      Decrease
       value. The second row displays the
      Transaction Type
       of
      Payment Transfer Out
       and the associated
      Increase
       value for the removal of the payment amount.
    • Payment Transfer In
      : When you access the
      Customer Activity Summary
       report for Bluemoon and click the value in the
      Payment Total
       column, Workday displays a transaction details grid with only 1 row for each payment transaction. The row displays the
      Transaction Type
       of
      Payment Transfer In
      , and the associated
      Decrease
       value as it reduces the receivables.
  • The payment company is different from the invoice company.
    • For example, you record a customer payment for
      Company
      A
       to customer John Doe, but apply it to an invoice for
      Company
      B
       to customer John Doe.
    • Payment Transfer Out
      : When you access the
      Customer Activity Summary
       report for Company A and click the value in the
      Payment Total
       column for customer John Doe, Workday displays a transaction details grid with 2 rows for each payment transaction. One row displays the
      Transaction Type
       of
      Payment
      , including the
      Payment Amount
       and the associated
      Decrease
       value. The second row displays the
      Transaction Type
       of
      Payment Transfer Out
       and the associated
      Increase
       value for the removal of the payment amount.
    • Payment Transfer In
      : When you access the
      Customer Activity Summary
       report for Company B and click on the value in the
      Payment Total
       column for customer John Doe, Workday displays a transaction details grid with only 1 transaction row. The row displays the
      Transaction Type
       of
      Payment Transfer In
      , and the associated
      Decrease
       value as it reduces the receivables.

Student Sponsor Contract Payments

Student sponsor contracts enable educational institutions, corporations, and governmental bodies to pay educational expenses for 1 or more students. Access the
Record Student Sponsor Payment
 task to record student sponsor payments and apply them specifically to invoices for student sponsor contracts.

VAT on Payments

In certain countries, companies can elect to pay Value Added Taxes (VAT) on payments instead of on invoices. Upon configuration, you can record VAT pending upon invoice and VAT payable upon collection of payment. Workday calculates and posts VAT on payment automatically. When you configure VAT on payments for a company:
  • Customer invoices that you haven't paid will still use the original accounting. Workday doesn't apply the tax accounting to the payment.
  • Customer invoices you create after configuring VAT, will use the VAT on payment accounting.
VAT considerations in Workday include:
  • Customer invoice and customer invoice adjustments support different rates per invoice line.
  • Support for prorated tax amounts for partial payments.
  • On-Account payments use the default tax rate of a company.
  • On-Account payments apply to a customer invoice.
Workday does not support VAT on payments for direct intercompany transactions when Worktag Balancing is enabled for intercompany receipts.

Payment Terms

You can configure payment terms in Workday to define:
  • Due dates for a customer invoice.
  • Discounts based on when your customer pays the invoice.
  • Customer-specific payment terms.

Payment Overrides

When recording or editing customer payments, you can override the system calculated payment discount amount directly on the customer payment remittance advice and specify the actual discount amount taken by the customer if the discount taken differs from the payment terms. This capability applies only when you select a single invoice. The functionality doesn’t apply when:
  • You have multiple invoices in each row.
  • The amount in the Discount Taken and Amount to Pay fields is more than the amount due.
  • There are references on the right-hand side (RHS) of the remittance line.
  • You select unsupported document types on the left hand side, such as consolidated invoice, on-account document, or on-behalf of payments.
  • The sign of the discount amount doesn’t match the supported document.

Payment Methods

Payment methods determine the account that Workday uses for various transactions. Workday provides several payment methods that you can use to configure payment types in your environment using the
Maintain Payment Types
 task. Some of the payment methods are electronic, which have additional processing considerations. You can use payment method of direct debit for electronic payment types.
When you use a third-party vendor to process payments outside of Workday, we recommend mapping your payment type to
Payment Method
 of
Manual
.

Payment Types

A payment type is a valid form of payment that you use to make payments. Workday enables you to configure each Payment Type and map it to a valid Workday delivered Payment Method. Electronic payment types, such as direct debit or credit card, process through settlement runs. Workday automatically creates a combined deposit and payment. Once the settlement engine completes the payments, it generates the accounting entries associated with each payment.
For other payment types, record the payments with the
Record Customer Payment
 task and apply them to the associated invoices. Example: You can map a
Credit Card
Payment Method
 to the
Visa
Payment Type
.

Payment Reporting

Workday provides several reports to give you a clear view of the payment process, including:
  • Customer Accounts Requiring Action
  • Customer Activity Detail
  • Customer Activity Summary
  • Customer Balance Detail
  • Customer Balance Summary
  • Customer Deposits Requiring Action
  • Customer Open Items
  • Customer Payments Requiring Action
  • Find Payments
  • View On-Account Document
To view customers payment transactions details, you can create an advanced custom report. Use the
Customer Transaction History
 business object from the
Customer Payment for Invoices Report
 data source and select relevant report fields:
  • Accounting Date
  • Customer Payment Applications
  • Invoice Currency
  • On-Account Amount
  • Overpayment Amount
  • Overpayment Reason
  • Overpayment Worktags
  • Total Payment Applied
  • Transaction Date
You can create an advanced custom report to view customers payment and relevant transaction details.
  1. Access the
    Create Custom Report
     task.
    • Select
      Advanced
       for Report Type.
    • Select
      Customer Payment for Invoices
       for
      Data Source
      .
  2. Access the
    Customer Payment for Invoices
     business object and select relevant reporting columns.
  3. Access the
    Customer Transaction History
     business object and select relevant reporting columns, including these fields and select
    OK
    :
    • Accounting Date
      : Retrieves the accounting date for the customer transaction.
    • Customer Payment Applications
      : Retrieves the customer payment applications for the customer transaction.
    • Invoice Currency
      : Retrieves the invoice currency used in the customer transaction.
    • Overpayment Reason
      : Retrieves the reason used for the overpayment customer transaction.
    • Overpayment Worktags
      : Retrieves the worktags used for the overpayment customer transaction.
    • Transaction Date
      : Retrieves the transaction date for the customer transaction.
Workday also supports reporting on all customer transactions, including customer payments, cash sales, and write-offs, from a single
Customer Transactions
 report data source.