Understanding the Installment Bills Process
You can use installment billing to invoice your customers in segments, with the total amount due divided equally, by percentage, or according to the configured definition. Each installment invoice includes the installment number, the total number of installments, the installment amount due, and the total invoice amount. You can also include a flat rate or percentage service charge. Taxes are applied to each installment amount at the time of billing.
Create a template for installment bills using a new bill or an existing bill. You control the schedule that controls when the system generates installment invoices. The system copies all non-amount information, such as customer, distribution of revenue, accounts receivable, and discounts and surcharges, from the template invoice to the installment billing invoices.
When you select an invoice format, you control whether or not the system displays a breakdown of the installment billing invoice amounts on the invoice. Online inquiry enables you to inquire about current and previous installment billing invoices.
PeopleSoft Billing supports three ways to define the default installment billing plan: at the business unit, bill type, or bill source level. You can create plans based on equal installments, percentage installments, or custom installments.
Each installment billing invoice carries its own information for accounting, contract liability, discounts and surcharges, and tax records. The system copies the default information, except for tax amounts, from the template for installment billing invoices to the individual installment invoices. An installment invoice functions much like a regular invoice.
When you generate an installment invoice, you charge value-added tax (VAT) for the amounts that are due on that invoice at the rate that is applicable for the tax point and date for the goods or services that are included on the invoice. However, no matter which format you use, the same basic rule is always applied: Calculate VAT on the amounts that appear on the invoice.
VAT Example
If you issue multiple invoices, one for each installment, the system calculates VAT on the installment amount because this is also the invoice amount.
Invoice 1: Due 30 March 2000.
Line Number
Description
Amount
VAT Rate
VAT Amount
1
Books
500.00
Zero
0.00
2
Stationery
250.00
Standard
43.75
3
Computer
3500.00
Standard
612.50
Net Amount = 4,250.00
VAT Amount = 656.25
Total Amount = 4906.25
Invoice 2: Due 30 April 2000.
Line Number
Description
Amount
VAT Rate
VAT Amount
1
Books
250.00
Zero
0.00
2
Stationery
125.00
Standard
21.88
3
Computer
1750.00
Standard
306.25
Net Amount = 2125.00
VAT Amount = 328.13
Total Amount = 2453.13
Invoice 3: Due 30 May 2000.
Line Number
Description
Amount
VAT Rate
VAT Amount
1
Books
250.00
Zero
0.00
2
Stationery
125.00
Standard
21.88
3
Computer
1750.00
Standard
306.25
Net Amount = 2125.00
VAT Amount = 328.13
Total Amount = 2453.13