PAYMENTS
1. Overview of Payment Management
The Payments section in Bylon EMS is used to manage and track all payments received from customers. It allows users to record payments, allocate payments to invoices, manage advance payments, track bounced cheques, process refunds and payment reversals, and manage payment approvals.
The main functions under Payment Management include:
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Record Payments
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Manage Advanced Payments
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Track Bounced Cheques
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Process Refunds
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Process Payment Reversals
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Payment Approvals
These functions help ensure that customer payments are accurately recorded, properly allocated, and reflected in customer accounts and financial reports.
2. Record Payments
What is a Payment?
A payment is an amount of money received from a customer against an invoice or as an advance payment.
For example:
A customer has an invoice of KES 50,000 and pays KES 30,000. The KES 30,000 received should be recorded as a payment and allocated to the customer's invoice.
The payment can be:
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Fully allocated to an invoice.
-
Partially allocated to an invoice.
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Kept as an advance payment for future allocation.
How to Record a Payment
Step 1: Open Payments
Go to:
Payments → Payment Management → Record Payments
Click Make Payment to start recording a new payment.
Step 2: Fill in the Payment Details
The payment form contains several fields that must be completed.
Customer
Select the customer who has made the payment.
This is important because the payment will be recorded against the selected customer's account.
Example:
Customer: ABC Hardware Ltd
The payment will therefore appear in ABC Hardware Ltd's payment records.
Payment Mode
Select the method through which the customer made the payment.
Examples may include:
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M-Pesa
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Cash
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Bank
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Cheque
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Other available payment methods
Selecting the correct payment mode helps the company track how payments are being received.
Currency
Select the currency in which the payment was received.
For example:
KES – Kenyan Shilling
The currency should correspond with the currency used for the payment.
Branch
Select the branch associated with the payment.
This is especially important for companies operating multiple branches.
For example, if a company has:
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Nairobi Branch
-
Mombasa Branch
-
Kisumu Branch
The user should select the branch where the transaction belongs.
This helps ensure that payments are correctly reflected in branch-level records and reports.
Amount Received
Enter the actual amount received from the customer.
Example:
Invoice amount: KES 50,000
Customer pays: KES 30,000
Amount Received: KES 30,000
The amount entered should match the actual amount received.
Date
Enter the date on which the payment was received.
This is important for accurate financial records, payment tracking, and reporting.
Transaction
Enter the transaction reference or transaction details where applicable.
For example:
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M-Pesa transaction code
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Bank transaction reference
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Cheque number
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Receipt reference
Example:
Transaction: QK12345678
This makes it easier to trace and verify the payment later.
Notes
Use the Notes field to enter any additional information about the payment.
For example:
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Payment received through customer representative.
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Part payment for Invoice INV-00125.
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Customer paid through bank transfer.
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Payment received for multiple invoices.
Notes provide additional information that may be useful when reviewing the transaction.
3. Invoice Allocation
Invoice allocation determines which customer invoice the payment should be applied to.
After entering the payment details, the system provides an Invoice Allocation section.
This section may display information such as:
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Invoice Number
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Balance Due
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Amount Paid
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Action
Manually Allocating a Payment
A payment can be manually allocated to a specific invoice.
For example:
Customer payment: KES 40,000
Customer has:
| Invoice | Balance Due |
|---|---|
| INV-001 | KES 25,000 |
| INV-002 | KES 30,000 |
The user can decide how the KES 40,000 should be allocated.
For example:
-
INV-001 → KES 25,000
-
INV-002 → KES 15,000
This leaves:
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INV-001 → Fully paid
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INV-002 → KES 15,000 remaining
Invoice Number
The invoice number identifies the invoice to which the payment will be allocated.
Always verify that the correct invoice is selected before applying the payment.
Balance Due
The Balance Due shows the outstanding amount on the invoice.
For example:
Invoice total: KES 50,000
Amount already paid: KES 20,000
Balance Due: KES 30,000
The amount allocated should not exceed the amount that is available for allocation or the applicable invoice balance.
Amount Paid
Enter the amount of the payment that should be allocated to the selected invoice.
The payment can be allocated fully or partially depending on the customer's payment and outstanding balance.
Action
The Action option is used to select or apply the payment allocation to the relevant invoice.
Always review the allocation before applying it.
4. Notification Options
Bylon provides notification options that can be used to notify customers when a payment has been recorded.
Send SMS Notification
Select Send SMS Notification when you want the customer to receive an SMS confirming the payment.
The customer can receive an automatic thank-you/payment confirmation SMS after the payment is recorded.
This helps:
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Confirm receipt of payment.
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Keep the customer informed.
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Improve communication.
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Provide immediate payment acknowledgement.
5. Close vs Apply
After entering payment information, the user may see options such as Close and Apply.
Close
Click Close when you do not want to proceed with the payment allocation at that moment.
This is useful when you want to exit the allocation section without applying the payment.
For example, if you need to verify an invoice before allocating the payment, you can close the allocation window and review the information first.
Apply
Click Apply when you are satisfied with the allocation and want to apply the payment to the selected invoice(s).
Always confirm:
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Customer
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Payment amount
-
Invoice number
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Amount allocated
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Balance due
before clicking Apply.
6. Advanced Payments
What is an Advanced Payment?
An Advanced Payment is money received from a customer before it has been allocated to a specific invoice.
It is also commonly referred to as an advance payment or customer deposit.
For example:
A customer pays KES 100,000 before an invoice is created.
Since there is no invoice to allocate the money to yet, the payment can be recorded as an advanced payment.
The amount remains available for allocation to the customer's invoice when the invoice is created.
Why Use Advanced Payments?
Advanced payments are useful when:
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A customer pays before an invoice is issued.
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A customer deposits money in advance.
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A customer pays for goods that have not yet been invoiced.
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The payment needs to be allocated to a future invoice.
7. Managing Advanced Payments
After recording an advanced payment, go to the Advanced Payment tab.
Find the relevant customer.
Under the customer's name, you will see the Manage option.
Click Manage.
The system provides several actions, including:
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View
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Edit
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Allocate
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Discard
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Delete
Each option has a different purpose.
View
The View option allows you to review the details of the advanced payment.
You can use it to confirm information such as:
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Customer
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Payment amount
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Payment date
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Payment mode
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Transaction reference
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Other payment details
Use View when you only need to inspect the payment without making changes.
Edit
The Edit option allows you to modify the advanced payment details where editing is permitted.
For example, you may need to correct certain payment information.
Always verify the changes before saving.
Allocate
The Allocate option is used when you want to apply an advanced payment to a customer's invoice.
This is especially useful when an invoice has now been created after the customer had already made an advance payment.
Discard
The Discard option is used when the advanced payment should no longer be considered for allocation, depending on the system workflow and applicable permissions.
Use this option carefully because it affects the status of the payment.
Delete
The Delete option removes the advanced payment record where the system permits deletion.
Deletion should only be performed when you are certain the payment record should not remain in the system.
Always verify the transaction before deleting it.
8. Allocating an Advanced Payment
When an invoice has been created and you want to use the customer's advanced payment:
Step 1
Go to:
Payments → Advanced Payments
Step 2
Find the customer's advanced payment.
Step 3
Click:
Manage → Allocate
The system will take you to the Advanced Payment Summary.
Advanced Payment Summary
The customer's invoices will appear in the summary.
The system may display:
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Invoice Number
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Date
-
Due Date
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Total Amount
-
Balance Due
-
Allocation Amount
Invoice Number
Shows the specific invoice that the advanced payment can be allocated to.
Always confirm that you have selected the correct customer and invoice.
Date
Shows the date on which the invoice was created.
This helps distinguish between different invoices belonging to the same customer.
Due Date
Shows the date by which the invoice is expected to be paid.
This can help the user determine which outstanding invoice should receive the payment.
Total Amount
Shows the original total value of the invoice.
For example:
Invoice Total: KES 80,000
Balance Due
Shows the amount that remains unpaid on the invoice.
For example:
Invoice Total: KES 80,000
Already Paid: KES 30,000
Balance Due: KES 50,000
Allocation Amount
This is the amount of the advanced payment that you want to apply to the invoice.
The user can manually enter the amount to allocate.
For example:
Advanced Payment: KES 100,000
Invoice Balance: KES 60,000
Allocation Amount: KES 60,000
After allocation, the invoice should have no remaining balance, subject to the system's accounting rules.
The remaining KES 40,000 can remain available for another invoice if applicable.
Allocation Note
Use the Allocation Note field to record additional information about the allocation.
For example:
Advance payment allocated to Invoice INV-00235.
This provides a clear record of why the payment was allocated.
Allocate Payment
After confirming all the details, click Allocate Payment.
The system will apply the selected amount of the advanced payment to the selected invoice.
Always review the invoice balance after allocation to confirm that the payment was applied correctly.
9. Example of Advanced Payment Allocation
A customer pays:
KES 100,000
before receiving an invoice.
The payment is recorded as an advanced payment.
Later, the customer receives:
Invoice INV-0050 – KES 70,000
The user goes to:
Advanced Payments → Customer → Manage → Allocate
The invoice appears with:
-
Total Amount: KES 70,000
-
Balance Due: KES 70,000
The user enters:
Allocation Amount: KES 70,000
Then enters an allocation note and clicks:
Allocate Payment
The KES 70,000 is applied to the invoice.
The remaining:
KES 30,000
can remain as an available advance payment for future allocation, depending on the system workflow.
10. Bounced Cheques
What is a Bounced Cheque?
A bounced cheque is a cheque that was presented for payment but was rejected by the bank and therefore the money was not successfully received.
This can happen for several reasons, such as:
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Insufficient funds in the customer's bank account.
-
Incorrect cheque details.
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Closed or blocked account.
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Stop-payment instruction.
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Other banking-related reasons.
Example
A customer gives the company a cheque of:
KES 50,000
The company records the payment.
Later, the bank rejects the cheque because the customer's account does not have sufficient funds.
The cheque has therefore bounced.
The company should not continue treating the KES 50,000 as successfully received cash.
Why Track Bounced Cheques?
Tracking bounced cheques helps the business:
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Identify failed payments.
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Maintain accurate customer balances.
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Reverse the effect of an unsuccessful payment where required.
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Follow up with customers for replacement payment.
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Maintain accurate financial records.
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Prevent invoices from incorrectly appearing as fully paid.
Bounced Cheque Process
When a cheque bounces:
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Identify the original payment.
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Confirm the cheque transaction details.
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Verify the bank's rejection/return information.
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Mark or process the bounced cheque according to the Bylon workflow.
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Ensure the customer's outstanding balance is accurately reflected.
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Follow up with the customer for replacement payment.
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Record the replacement payment when received.
Important
A bounced cheque should not be treated as a successful payment simply because the original payment was entered into the system.
The final accounting treatment should follow the company's approved financial procedure.
11. Payment Refunds
What is a Refund?
A refund is money returned to a customer after the customer has already made a payment.
A refund may be required when:
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The customer overpaid.
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An order was cancelled.
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Goods were returned.
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A payment was made incorrectly.
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The company needs to return money to the customer.
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A customer deposit needs to be refunded.
Example
A customer pays:
KES 100,000
but the amount that should have been paid is:
KES 80,000
The excess:
KES 20,000
may need to be refunded to the customer, depending on the company's policy.
Refund Process
Before processing a refund, verify:
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Customer name.
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Original payment.
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Amount paid.
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Reason for refund.
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Amount to be refunded.
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Payment method.
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Relevant invoice or transaction.
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Required approval.
The refund should be processed using the appropriate refund function in Bylon.
Always ensure that the refund is properly recorded so that the customer's account and financial records remain accurate.
12. Payment Reversals
What is a Payment Reversal?
A payment reversal is the process of cancelling or reversing a payment that was previously recorded in the system.
A reversal may be required when:
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A payment was recorded incorrectly.
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The wrong customer was selected.
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The wrong amount was entered.
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The wrong payment mode was selected.
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A payment was duplicated.
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A cheque bounced.
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A transaction was entered but was later found to be invalid.
Example
A user accidentally records:
KES 100,000
instead of:
KES 10,000
The incorrect payment may need to be reversed and the correct payment recorded.
Refund vs Reversal
It is important to understand the difference.
Refund
A refund means money is being returned to the customer.
Example:
Customer paid KES 50,000 and the company needs to return KES 10,000.
Reversal
A reversal means an incorrect or invalid payment transaction is being cancelled/reversed in the system.
Example:
A payment was entered against the wrong customer and needs to be reversed.
A reversal does not necessarily mean that money is being physically returned to the customer.
13. Payment Approvals
What are Payment Approvals?
Payment approvals provide a control mechanism where certain payment transactions may require authorization before they are finalized or processed.
This helps prevent unauthorized or incorrect transactions.
Payment approvals can be useful for:
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Large-value payments.
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Refunds.
-
Payment reversals.
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Sensitive financial transactions.
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Transactions requiring management authorization.
Payment Approval Process
A typical approval workflow may involve:
Step 1: Create the Transaction
The user records the payment, refund, reversal, or other applicable transaction.
Step 2: Submit for Approval
Where approval is required, the transaction is submitted to the authorized approver.
Step 3: Review
The approver reviews:
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Customer
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Amount
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Payment mode
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Transaction reference
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Invoice
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Reason
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Notes
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Supporting information
Step 4: Approve or Reject
The authorized user can approve or reject the transaction according to the company's approval process.
Step 5: Final Processing
Once approved, the transaction proceeds according to the Bylon workflow.
If rejected, the transaction should be corrected or cancelled as appropriate.
14. Recommended Payment Management Workflow
For a normal customer payment:
Customer makes payment
↓
Open Payment Management
↓
Click Make Payment
↓
Select Customer
↓
Select Payment Mode
↓
Select Currency
↓
Select Branch
↓
Enter Amount Received
↓
Enter Date
↓
Enter Transaction Reference
↓
Add Notes if Necessary
↓
Review Invoice Allocation
↓
Select Invoice
↓
Enter Amount to Allocate
↓
Select SMS Notification if required
↓
Review all details
↓
Click Apply
↓
Payment is allocated to the invoice
15. Advanced Payment Workflow
When a customer pays before an invoice exists:
Customer makes advance payment
↓
Record Payment
↓
Keep payment as Advanced Payment
↓
Invoice is created later
↓
Open Advanced Payments
↓
Select Customer
↓
Click Manage
↓
Click Allocate
↓
Review Advanced Payment Summary
↓
Select Invoice
↓
Check Total Amount and Balance Due
↓
Enter Allocation Amount
↓
Enter Allocation Note
↓
Click Allocate Payment
↓
Payment is applied to the invoice
16. Payment Management Best Practices
To maintain accurate payment records:
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Always select the correct customer.
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Confirm the payment mode before saving.
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Enter the exact amount received.
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Use the correct transaction reference.
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Select the correct branch for multi-branch organizations.
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Review invoice allocation before applying a payment.
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Do not allocate an advance payment to the wrong customer.
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Use notes when additional explanation is required.
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Verify bounced cheques and update the customer's balance appropriately.
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Do not process refunds without confirming the original transaction and applicable approval.
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Use payment reversals for incorrect or invalid transactions rather than creating confusing duplicate entries.
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Review transactions carefully before approving them.
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Use SMS notifications where customer confirmation is required.
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Regularly reconcile recorded payments against bank, M-Pesa, cash, and other payment records.
17. Quick Reference
| Function | Purpose |
|---|---|
| Record Payment | Records money received from a customer |
| Invoice Allocation | Applies a payment to a specific invoice |
| Advanced Payment | Records money received before it can be allocated to an invoice |
| Allocate Advanced Payment | Applies an advance payment to an invoice |
| Bounced Cheque | Tracks a cheque that was rejected by the bank |
| Refund | Returns money to the customer |
| Payment Reversal | Reverses an incorrect or invalid payment transaction |
| Payment Approval | Allows authorized users to review and approve applicable transactions |
18. Key Difference Between Payment Functions
Normal Payment
Used when money has been received and can be applied to an existing invoice.
Advanced Payment
Used when money has been received but there is no invoice to allocate it to yet.
Bounced Cheque
Used when a cheque that was previously presented as payment is rejected by the bank.
Refund
Used when money needs to be returned to the customer.
Payment Reversal
Used to reverse an incorrect, duplicate, or invalid payment transaction.
Payment Approval
Used to ensure that applicable financial transactions are reviewed and authorized before final processing.
19. Final Verification Before Completing a Payment
Before clicking Apply, allocating an advanced payment, processing a refund, or approving a transaction, always verify:
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Customer name
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Payment amount
-
Payment mode
-
Currency
-
Branch
-
Payment date
-
Transaction/reference number
-
Invoice number
-
Invoice balance
-
Allocation amount
-
Notes
-
Notification option
-
Approval requirements
This verification helps prevent incorrect customer balances, duplicate transactions, wrong invoice allocations, and inaccurate financial reports.