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• Deposits: Create a deposit to record a customer's prepayment for goods or services that you will provide in the future.

• Guarantees: Create a guarantee to record a contractual agreement with your customer to conduct business over a specified period of time.

You define a commitment and then specify the debit and credit accounts. When your customers invoice or credit against their commitments, Receivables automatically adjusts the commitment balance and generates reversing accounting entries.

You can assign sales revenue and non-revenue credit as a percentage of the commitment total. If you do assign sales revenue credit, Receivables ensures that you assign 100% of your commitment total. To assign additional or bonus credit for certain sales, use non-revenue sales credits.

Note: Commitments do not include tax or freight charges.

Prerequisites

   Define payment terms

   Define transaction types

   Define transaction batch sources

   Define salespersons

   To enter a customer commitment:

1. Navigate to the Transaction window.

2. If your batch source does not specify Automatic Invoice Numbering, enter a commitment Number. Otherwise, Receivables assigns a number when you save.

3. Enter the Date and Currency of this commitment. The default date is either the batch date or, if there is no batch information, the current date. The default currency is either the currency entered at the batch level or your functional currency, but you can change it to any currency defined in the system. If the currency is different from your functional currency, and you have not defined daily conversion rates, enter exchange rate information. See: Foreign Currency Transactions.

4. Enter the transaction Source for this commitment. The default is the source you entered at the batch level. If there is no batch information, you must enter a source. The transaction source specifies automatic or manual batch and invoice numbering and the standard transaction Type.

5. If the transaction source you entered has Post to GL set to Yes, enter the GL Date for this commitment. The default GL Date is the current date. However, if the current date is not in an open period, the default is the last date of the most recent open period. The GL Date you enter must be in an Open or Future period.

6. Choose a transaction Class of Deposit or Guarantee.

7. Enter the customer Bill To Name and Location for this commitment.

8. Enter the payment Terms for this commitment. Receivables calculates the Due Date based on the payment terms and date of this commitment. The default is the payment term assigned to the transaction type you entered for this commitment.

Receivables uses the following hierarchy to determine the default payment terms, stopping when one is found:

• customer Bill-To site level

• customer address level

• customer level

• Transaction Type

9. If you do not want to assign sales credit for this commitment, enter 'No Credit' in the Salesperson field.

10. If you are using manual sequence numbering, open the More alternative region, then enter a unique Document Number. Otherwise, Receivables assigns a document number when you save. See: Implementing Document Sequences.

11. Open the Remit To alternative region, then enter the Remit To Address for this transaction. The default is the remit-to address assigned to the country, state, and postal code combination for this customer's address.

12. Open the Commitment alternative region.

13. Enter a range of Effective Dates for this commitment (optional). If you do not assign an end date, Receivables lets you enter invoices and credit memos against this commitment indefinitely until the amount due becomes zero. If you enter an end date, Receivables verifies that all existing invoices against this commitment are included in this date range.

14. Enter the Amount and a brief Description of this commitment.

15. To review or update Sales Credit information, choose Sales Credits. See: Entering Sales Credits.

To review or update accounting information, choose Accounting. See: Reviewing Accounting Information.

16. Save your work. If you are ready to complete this commitment, see: Completing Transactions.

See Also

Technical Perspective: Transactions

Commitment Balance Report