Processing Orders with Deposits

These sections provide some examples of how sales orders that contain deposits are processed.

Deposit Payment Scenario

Suppose you have a sales order for 125 USD. The customer is unable to take the goods with them at the time of the order. Perhaps the goods are on backorder or special order. The customer is required to pay a 50 USD deposit for the order. In this example the invoice is sent to Accounts Receivable first.

1. The order is entered and a deposit payment of 50 USD is recorded in the Counter Sale component.

   Note:

   A deposit can also be recorded in the regular sales order entry component.

2. OM_BILL sends an invoice for the 50 USD deposit to Billing.

3. Billing creates a pending item in Accounts Receivable.

4. An open item is created for 50 USD for the invoice that contains the deposit.

5. The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 50 USD to Accounts Receivable which references the sales order.

6. The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 50 USD which references the sales order.

7. The Accounts Receivable Payment Predictor finds an open item to which it should apply the payment.

8. The payment is applied to the open item and the item is closed.

9. A balance of 50 USD, the deposit, is shown under Deposits on the Customer Account Overview in Accounts Receivable.

   Event	Accounts Receivable Open Item	Accounts Receivable Payment	Customer Balance	Accounting Entries
   Invoice creates Open Item IT-01	50 USD		50 USD	Dr AR 50 USD Cr Customer Deposits 50 USD
   Cash Payment (AR_PAYLOAD)		50 USD		Dr Cash 50 USD
   Cash Payment applied to Invoice WS-01	Closed	Applied	0 USD	Cr Accounts Receivable 50 USD

Sales Order Is Fulfilled, Deposit Was Taken When Order Placed- Balance To Be Billed

Continuing with the previous example, where you had a sales order for 125 USD and the customer paid with a deposit of 50 USD, suppose the sales order is shipped and customer is billed for the balance on the sales order.

1. OM_BILL sends an invoice for 125 USD to Billing.

2. OM_BILL also sends an invoice line for the deposit applied of -50 USD. The total due on the invoice is 75 USD.

3. Billing creates pending item in Accounts Receivable for 75 USD.

4. The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 75 USD.

   The open item references both the invoice and the sales order.

5. The customer balance will have 75 USD open as a result of this transaction.

   Event	Accounts Receivable Open Item	Accounts Receivable Payment	Customer Balance	Accounting Entries
   Invoice creates Open Item IT-01	75 USD (invoice)		75 USD	Dr Accounts Receivable 75 USD Cr Revenue 125 USD Cr Customer Deposits -50 USD

Sales Order Is Fulfilled, Deposit Was Taken When Order Placed - Balance Paid When Goods Are Picked Up

Suppose you have a sales order for 125 USD where the customer paid with a deposit of 50 USD, however in this example the sales order is picked up and paid for by the customer at time of pick up. In this example the invoice is sent to Accounts Receivable first. Also in this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.

1. The customer returns to pick up the goods.

   The 50 USD deposit is applied to the order and the balance of 75 USD is paid for and recorded in the counter sale component.

2. OM_BILL sends an invoice for 125 USD to Billing.

3. OM_BILL also sends an invoice line for the deposit applied of -50 USD. The total due on the invoice is 75 USD.

4. Billing creates a pending item in Accounts Receivable for 75 USD.

5. The Accounts Receivable Update process creates an open item from the invoice and updates the customer balance by 75 USD. The open item references both the invoice and the sales order.

6. The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 75 USD to Accounts Receivable which references the sales order.

7. The Accounts Receivable Payment Interface process (AR_Payload) creates a payment for 75 USD which references the sales order.

8. The Accounts Receivable Payment Predictor applies the payment to the open item by matching the payment sales order reference to the open item invoice reference.

9. The Accounts Receivable Update process updates open item activity and updates the customer balance by -75 USD.

10. The Accounts Receivable Update process closes open items.

    Event	Accounts Receivable Open Item	Accounts Receivable Payment	Customer Balance	Accounting Entries
    Invoice creates Open Item IT-01	75 USD		75 USD	Dr AR 75 USD Cr Revenue 125 USD Cr Customer Deposits –50 USD
    Cash Payment (AR_PAYLOAD)		75 USD		Dr Cash 75 USD
    Cash Payment applied to Invoice WS-01	Closed	Applied	0 USD	Cr Accounts Receivable 75 USD

Payment Plus Deposit Scenario

A sales order is created for 200 USD. This sales order is partially fulfilled. The customer paid for 100 USD worth of goods taken and left a 50 USD deposit for backordered goods. In this case the invoice was sent to Accounts Receivable first. Also in this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.

1. The order is entered and the payment of 150 USD is recorded in the Counter Sale component.

2. The Order Management Billing process (OM_BILL) sends an invoice to Billing for 100 USD for the goods taken.

3. This same process creates a separate invoice for the deposit taken for 50 USD.

4. Billing creates two pending items in Accounts Receivable: one for the 100 USD goods invoice and one for 50 USD deposit invoice.

5. The Accounts Receivable Update process creates open items from invoices, and updates the customer balance by 150 USD. The open items reference both the invoice and the sales order.

6. The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends payment of 150 USD to Accounts Receivable and references the sales order.

7. The Accounts Receivable Payment Interface process creates a payment for 150 USD which references the sales order.

8. The Accounts Receivable Payment Predictor applies the payment to one of the open items by matching the payment sales order reference to the open item sales order reference.

9. The Accounts Receivable Update process closes one of the open items.

   Event	Accounts Receivable Open Item	Accounts Receivable Payment	Customer Balance	Accounting Entries
   Invoice creates Open Item IT-01	100 USD		100 USD	Dr AR 100 USD Cr Revenue 100 USD
   Invoice creates Open Item IT-01	50 USD		150 USD	Dr AR 50 USD Cr Customer Deposit 50 USD
   Cash Payment		150 USD		Dr Cash 150 USD
   Cash Payment applied to Invoice WS-01	Closed (one of the items gets closed, for example, the 50 USD)	Applied	100 USD	Cr Accounts Receivable 50 USD
   Cash Payment applied to Invoice WS-01	Closed (the other item)	Applied	0	Cr Accounts Receivable 100

Partial Payment Plus Deposit Scenario

Similar to the previous scenario, suppose the customer orders 200 USD worth of goods. A portion of the goods can be taken immediately and a portion is backordered. The customer pays a partial payment of 25 USD for 100 USD worth of goods taken. The customer also pays a 50 USD deposit for backordered goods. In this example the invoice is sent to Accounts Receivable first. For this example, assume the Accounts Receivable Payment Predictor matches payments with open items using the #REFS algorithm group.

1. The order is entered and the payment of 75 USD is recorded in the Counter Sale component.

2. The Order Management Billing process (OM_BILL) sends an invoice to Billing for 100 USD.

3. This same process also creates a separate invoice for the deposit taken for 50 USD.

4. Billing creates pending items in Accounts Receivable: for the 100 USD goods invoice and one for 50 USD deposit invoice.

5. The Accounts Receivable Update process creates open items from the invoices and updates the customer balance by 150 USD.

   The open items reference both the invoice and the sales order.

6. The Cash Drawer is reconciled and the Cash Drawer Receipts (CDR_LOADPMT) process sends a payment of 75 USD to Accounts Receivable which references the sales order.

7. The Accounts Receivable Payment Interface process creates a payment for 75 USD which references the sales order.

8. The Accounts Receivable Payment Predictor applies the payment to one of the open items by matching the payment sales order reference to the open item sales order reference.

9. Because both open items reference the same sales order it is difficult to predict which of the two invoices will be credited.

   For this example, the 75 payment was applied to the deposit invoice to close the item

10. The Accounts Receivable Update process closes one of the open items, in this case the Deposit invoice.

    Event	Accounts Receivable Open Item	Accounts Receivable Payment	Customer Balance	Accounting Entries
    Invoice creates Open Item IT-01	100 USD		100 USD	Dr Accounts Receivable 100 USD Cr Revenue 100 USD
    Invoice creates Open Item IT-01	50		150 USD	Dr Accounts Receivable 50 USD Cr Customer Deposit 50 USD
    Cash Payment (AR_PAYLOAD)		75 USD	--	Dr Cash 75 USD
    Cash Payment applied to Invoice WS-01	Closed the 50 USD payment	Applied	75 USD	Cr Accounts Receivable 75 USD