Understanding Prepayment Processing

When you enter orders for customers, you send out invoices to the customers for the goods they received. Occasionally, customers can make a form of payment in advance, which is immediately after order entry. With prepayment processing, you can generate an invoice as a customer receipt, with the order total noted as prepaid on the invoice.

Prepayment of an order takes place when a seller receives a form of payment from the customer at the time of order entry. Many types of prepayments are available for a customer to use, such as cash, check, and credit card. When you make any type of prepayment, the system records transaction information for each order detail line, and indicates the payment on the invoice.

Two types of prepayment transactions exist:

• Two-party prepayment

  Two-party prepayments are typically cash or check transactions, which occur between you and the customer. When an order is prepaid with cash or a check, the system indicates the prepayment form, transaction, and total on the invoice.

• Three-party prepayment

  Three-party prepayments are typically credit card transactions, which occur between you, the customer, and the credit card company.

  In the system, the transaction is an electronic transmission of transaction information between the bank, the credit card company, and the credit card processor.

  During order entry, you can validate credit information when you accept a credit card payment. By way of the middleware solution, the system retrieves authorization and updates the prepayment transaction in the system. If the authorization is unsuccessful, then the order is put on authorization hold and the system does not enable further order processing.

  When a settlement is performed, the middleware solution releases funds from a customer's account to the merchant account. If the settlement transactions contain errors, the order is put on settlement hold and the system does not enable further order processing.

  For either hold to be removed, the authorization or settlement process must be successfully run in batch mode of the appropriate prepayment transaction version.

  If an order detail line is over shipped, or an additional order detail line is added to the order, you must receive a new authorization.

The prepayment processing system provides an interface between JD Edwards EnterpriseOne programs, such as the Sales Order Entry programs (P42101 and P4210), and a seller's designated credit card processor. With prepayment processing, you can integrate credit card authorizations and final settlements with the company's business processes, such as order entry and invoicing procedures.

For three-party prepayment transactions, the system does not include middleware or credit card transaction processors. To complete credit card prepayment processes, you must select a credit card processor, a third-party vendor, or a middleware solution with which you can transmit information between JD Edwards EnterpriseOne, the credit card company, and the company's bank.