Flexible Payment Options
Topics in this part:
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Deferred/Installment Billing Overview provides an overview of how flexible payment options work.
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Deferred/Installment Billing Setup describes the steps necessary to set up deferred or installment billing pay plans.
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Working with Flexible Payment Options (WFPO) describes the screens you use in the Work with Flexible Payment Options menu option.
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Credit Card Net Exchange Billing describes the process the system uses to net credit invoices with debit invoices before a deposit is sent to the service bureau for an invoice associated with an exchange.
Important:
There is a known issue with deferred/installment billing functionality when processing a return. If you plan to use deferred/installment billing, contact customer support to determine if your planned use of this functionality will be impacted by this issue.
Deferred/Installment Billing Overview
Pay plans are deferred payment or installment billing options you can offer to your customers. Under a pay plan, you delay billing the customer's credit card for a prearranged interval.
There are two types of pay plans:
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Deferred billing: You bill the customer for the shipment after a specific number of days has passed, based on either the order date or the shipment date; or, you bill the customer on a given day of the month following the order or shipment.
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Installment billing: You bill the balance due for a shipment in a number of equal installment payments, which are due after specific intervals or on a given day of the month.
Different credit card types: Only credit cards (as opposed to different types such as stored value card or debit card) are eligible for deferred or installment billing. If you accept any other credit card type besides a regular credit card, you should make the Paytype one of the Qualification Values for each payment plan you create to prevent these other credit card types from being accepted. You can use the Copy option at the Work with Flexible Payment Option Screen to make a copy of the payment plan for each eligible credit card pay type.
EXC flexible payment option: The system delivers the EXC Net Billing for Exchanges flexible payment option in the Working with Flexible Payment Options (WFPO) menu option to use during Credit Card Net Exchange Billing (the Use CC Net Exchange Billing (M23) system control value is selected). You cannot change or delete this flexible payment option and you cannot use this flexible payment option for deferred/installment billing. See Credit Card Net Exchange Billing for processing details.
Important:
There is a known issue with deferred/installment billing functionality when processing a return. If you plan to use deferred/installment billing, contact customer support to determine if your planned use of this functionality will be impacted by this issue.
In this topic:
Not in this topic: This topic does not include general information on setting up your company to use deferred or installment billing, or on setting up the pay plans themselves; see Deferred/Installment Billing Setup. Also, see Manage Rejected Deposits in Modern View and Printing the Deposit History Summary (PDHS) for more information.
Examples
| Pay Plan Setup | Result |
|---|---|
|
Payment deferred 30 days based on invoice date |
Order entered on 9/1 and shipment confirmed on 9/15. Deposit eligible for processing on 10/15. |
|
Payment deferred 30 days based on order date |
Order entered on 9/1 and shipment confirmed on 9/15. Deposit eligible for processing on 10/1. Note: If the shipment did not take place until 10/1 or after, the deposit would be eligible for processing immediately after shipment confirmation. |
|
Payment deferred until the 25th of the month |
Order entered on 9/1 and shipment confirmed on 9/15. Deposit eligible for processing on 9/25. |
| Pay Plan Setup | Result |
|---|---|
|
Four installments, 30 day intervals |
Order entered on 9/1 for $200.00 and shipment confirmed on 9/15. Four installments of $50.00, eligible for processing on 9/15, 10/15, 11/14, 12/14 |
|
Six installments, 1st of the month |
Order entered on 9/1 for $300.00 and shipment confirmed on 9/15. Six installments of $50.00, eligible for processing on 10/1, 11/1, 12/1, 1/1, 2/1, 3/1. Note: If the shipment did not take place until 10/1, the first installment would still be eligible for processing on that same date. |
See Deposit Release Date for more examples.
Applying a Pay Plan in Order Entry
Determining eligible orders: In order to assign a pay plan to an order, the system must first determine if the order is eligible for a pay plan.
An order is eligible for a pay plan if the order:
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is within the pay plan's starting and ending date
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does not contain an item that is excluded from pay plans
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contains only one credit card
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has a source code that is not excluded from pay plans
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meets the minimum dollar amount requirement for the pay plan, if any
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meets the pay type requirement for the pay plan, if any
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meets the offer requirement for the pay plan, if any
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meets the item requirement for the pay plan, if any
Selection Hierarchy
Once the system determines which payment plans are eligible for the order, it determines the most appropriate plan.
The system selects the first qualifying pay plan as the primary plan based on the following hierarchy:
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The pay plan is set to apply automatically to a qualifying order.
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The pay plan is assigned to the source code on the order header.
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Selection based on the qualification values for the pay plan:
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An item on the order is the qualifying item for the pay plan and the order meets the qualifying merchandise dollar amount.
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An item on the order is the qualifying item for the pay plan but the order does not meet the qualifying merchandise dollar amount.
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The offer on the order is the qualifying offer for the pay plan and the order meets the qualifying merchandise dollar amount but does not contain the qualifying item.
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The offer on the order is the qualifying offer for the pay plan but the order does not meet the qualifying merchandise dollar amount or contain the qualifying item.
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The pay type on the order is the qualifying pay type for the pay plan and the order meets the qualifying merchandise dollar amount but does meet any other qualifying criteria.
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The pay type on the order is the qualifying pay type for the pay plan but the order does not meet any of the other qualifying criteria.
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The order meets the qualifying merchandise dollar amount but does not meet any other qualifying criteria.
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If more than one pay plan meets the same qualifications, the system then determines the primary plan as follows:
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The pay plan is the first eligible plan in descending starting date sequence (most current date), or
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The pay plan is the first alphanumerically.
Applying the plan to the order: The system can apply the pay plan to the order in three different ways, depending on how you set up the pay plan:
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Automatically apply the plan to the order, or
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Prompt the operator to select a plan, or
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Require the operator to manually assign a plan
| If the pay plan is set to.... | The system.... |
|---|---|
|
automatically apply to the order |
automatically applies the pay plan to the order when you enter payment method information |
|
prompt the operator |
displays the Select Payment Plan Window pop-up window, listing eligible payment plans, where the operator can select a plan to assign to the order |
|
not automatically apply to the order |
does not automatically apply the pay plan to the order or display a pop-up window; the operator must select a pay plan for the order |
Demand Updates
In addition to the standard demand updates made for every order, the system updates the following fields in the Flexible Payment Options table when you accept an order:
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Number of orders
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Dollars ordered
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Number of soldouts
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Dollars soldout
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Number of cancels
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Dollars canceled
You can review history for a pay plan by selecting History for the plan at the Work with Flexible Payment Option Screen.
The system also performs updates when you confirm and ship an order containing a pay plan. See Billing Updates.
Pick Slip Generation
Authorization: Unlike regular (non-pay plan) orders, deferred or installment billing orders do not automatically require an authorization for the full pickable amount of the order when you generate pick slips. The amount authorized at pick slip generation is summarized in the table:
| When you print a pick slip for... | The amount authorized is... |
|---|---|
|
a regular (non-pay plan) order |
the full pickable amount of the order (including any tax, shipping, and charges) |
|
a deferred billing pay plan order |
one dollar, unless the Authorize full amount field for the pay plan is selected |
|
an installment billing pay plan order |
the first payment of the installment plan, unless the Authorize full amount field for the pay plan is selected |
Pick messages: Any pick slip messages you have specified for the pay plan print on the customer's pick slip, provided your pick slip printing program supports it. You can enter up to three lines of messages for a pay plan.
Billing Updates
Flexible payment option: The system updates the total numbers and dollars shipped for the pay plan when you confirm shipment and bill. You can review history for a pay plan by selecting History for the plan at the Work with Flexible Payment Option Screen.
Invoice: In addition to all of the standard updates that occur during billing, the system calculates the deposit release date based on the terms of the pay plan. This date, which is stored in the Invoice Pay Method, indicates when the deposit will be eligible for processing. In the case of an installment plan, the deposit release date indicates when the first installment will be eligible for processing. Each installment has a separate Deposit Release Date.
Regular (non-pay plan) orders also have a deposit release date; however, it is always the same as the invoice date.
Deposit Release Date
The system assigns a deposit release date to all orders at billing. The deposit release date indicates when the deposit is eligible for processing. In the case of a regular (non-pay plan) order, the deposit release date is always the same as the invoice date, because the deposit is eligible for processing immediately. Examples of deposit release date calculation for pay plan orders are:
| Pay Plan Settings | Deposit Release Date Calculation | Examples | |
|---|---|---|---|
| fixed date | Use the fixed date; however, if this date has already passed, use the invoice date | Standard calculation: |
Order date = 9/1 Fixed date = 10/1 Invoice date = 9/15 Deposit release date = 10/1 |
| If the fixed date has already passed: |
Order date = 9/1 Fixed date = 10/1 Invoice date = 10/5 Deposit release date = 10/5 |
||
| number of days and order date | Add the number of days to the order date; however, if the resulting date has already passed, use the invoice date; or, if the pay plan expiration date is sooner than the resulting date, use the expiration date or invoice date (whichever is later) | Standard calculation: |
Order date = 9/1 Number of days = 30 Invoice date = 9/15 Deposit release date = 10/1 |
| If deposit release date based on standard calculation is earlier than current (invoice) date but before the pay plan expiration date |
Order date = 9/1 Number of days = 30 Invoice date = 10/5 Expiration date = 10/15 Deposit release date = 10/5 |
||
| If deposit release date based on standard calculation is later than the pay plan expiration date: |
Order date = 9/1 Number of days = 30 Invoice date = 9/15 Expiration date = 9/30 Deposit release date = 9/30 |
||
| number of days and invoice date | Add the number of days to the invoice date; however, if the pay plan expiration date is sooner than the resulting date, use the expiration date | Standard calculation: |
Order date = 9/1 Number of days = 30 Invoice date = 9/15 Deposit release date = 10/14 |
| If deposit release date based on standard calculation is later than the pay plan expiration date: |
Order date = 9/1 Number of days = 30 Invoice date = 9/15 Expiration date = 9/30 Deposit release date = 9/30 |
||
| fixed date | Use the next occurrence of the fixed day of the month and continue on that date for the number of installments; however, if the pay plan expiration date has occurred when you bill the order, use the invoice date | Standard calculation: |
Order date = 9/1 Fixed date = 10 (10th of the month) Number of installments = 4 Invoice date = 9/15 Installment deposit release dates = 10/10, 11/10, 12/10, 1/10 |
| If expiration date has already occurred when you bill the order: |
Order date = 9/1 Fixed date = 10 (10th of the month) Number of installments = 4 Invoice date = 9/15 Expiration date = 9/10 Deposit release date = 9/15 (no installments) |
||
| interval | Use the current date and add the number of interval days to each installment date to calculate the remaining installments; however, if the pay plan expiration date has occurred when you bill the order, use the invoice date | Standard calculation: |
Order date = 9/1 Interval number of days = 30 Number of installments = 4 Invoice date = 9/15 Installment deposit release dates = 9/15, 10/15, 11/14, 12/14 |
| If expiration date has already occurred when you bill the order: |
Order date = 9/1 Interval number of days = 30 Number of installments = 4 Invoice date = 9/15 Expiration date = 9/10 Deposit release date = 9/15 (no installments) |
||
Processing Deposits
Authorization required: Unlike a regular (non-pay plan) credit card order, a pay plan order might not have a full, valid authorization at the time you process the deposit. Regular orders normally receive a full authorization at the time you generate the pick slip, and deposit processing normally occurs soon enough after pick slip generation for the authorization to still be valid. However, deposits for pay plan orders occur at intervals after pick slip generation, and authorizations from that time may no longer be valid, or may have been for less than the full deposit amount. See Pick Slip Generation.
Action codes: The system sends an action code of B to the deposit service for any pay plan deposits that require authorization. The conditions under which the system sends an action code of B are described in Processing Auto Deposits (SDEP).
Force deposit: If a pay plan deposit fails authorization, the system will “force” the deposit if you have set up the vendor response code to do so. Forcing a deposit means that the system performs all the same updates as if the authorization had been approved. For example, the invoice payment method for the order will be updated, and the deposit will not be included on reports that list unconfirmed deposits, or be available through the Resubmit Rejected Deposits function.
Rejected Deposits
Overview: Rejected or unconfirmed deposits appear on the Unconfirmed Deposits Listing when you process deposits. You can use the Resubmit Rejected Deposits Screen to work with these deposits, including:
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changing the credit card number or the deposit release date
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writing off or deleting the deposit
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entering a cash payment amount
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confirming the deposit interactively
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reviewing deposit history
You can also work with rejected deposits through standard order inquiry. See Order Inquiry.
Order Inquiry
Purpose: Use standard order inquiry to review information associated with a pay plan. The information and options listed below are not available in streamlined order inquiry.
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the total amount to deposit, the amount deposited, and the remaining amount to deposit
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credit card information
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the deposit release date
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installment schedule if the order uses an installment pay plan, such as:
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the total number of installments
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the number of installments remaining to deposit
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the installment interval
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the fixed installment day
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the installment amount
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rejected deposit amount
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prepaid amount
Change options: You can also change this information related to the invoice payment method:
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the deposit release date
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installment information, such as:
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the number of remaining installments
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the installment interval
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the fixed installment day
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the prepaid check or cash amount
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credit card information, such as:
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the pay type
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the credit card number
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the credit card's expiration date
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the authorization number
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the authorization date
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Rejected deposit options: If the invoice payment method is associated with a rejected deposit amount, you can perform the following updates through order inquiry:
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resubmit the rejected deposit
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write off the remaining amount to deposit for the invoice or write off a specified amount
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delete the rejected deposit
Deposit history: You can also review invoice deposit attempts and responses for each invoice payment method in order inquiry. Deposit history includes whether the invoice was associated with a pay plan, the deposit amount, and the response code received from the deposit service.
Order payment history: The system records messages describing invoice activity associated with the order payment method or invoice payment method, such as:
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deposits made
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invoices netted against each other
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changes made in order inquiry
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when a pay type is deactivated
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when you add, change, or delete the pay plan associated with the payment type on the order
Returns
Purpose: When you perform a return against an order containing a payment plan, the system does not credit a customer's credit card until a deposit amount equal to or greater than the credit amount has been processed. This check ensures that the customer does not receive a credit for the return before paying for the shipment.
For deferred payment plans, the system processes the credit invoice after the debit invoice has been deposited.
For installment payment plans, the system processes the credit invoice once the debit invoice amount deposited is equal to or greater than the credit invoice amount.
Netting Credits
You can net credit invoices against debit invoices before processing the deposit on a pay plan order. The Net Credit Card Credits for Deferred and Installment Billing (F55) system control value controls whether you net credits.
If you net credits:
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For deferred payment plans, the system subtracts the credit invoice amount from the debit invoice amount and sends only the net amount to the service bureau for deposit.
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For installment payment plans, the system subtracts the credit invoice amount from the debit invoice amount. The system then divides the remaining amount to deposit for the debit invoice by the number of remaining installments to determine the amount due for each remaining installment.
If you do not net credits, each credit deposit is processed separately from the related debit deposit.
See Processing Auto Deposits (SDEP) for more information on netting credits and examples.
Deposit release date: A credit invoice uses the deposit release date from the original (debit) invoice as long as that date is not earlier than the current date. If the deposit release date of the original invoice is earlier than the current date, the credit invoice uses the current date. This date assignment ensures that the customer is not credited until the deposit is processed; but if the customer has been billed, the credit will be released immediately.
Reporting
Related reports: The following reports may be useful in reviewing pay plan activity and status:
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Sales Journal by Pay Type (fast path = PSJP): breaks out totals billed by date, including deferred, installment, and regular (non-pay plan) orders for each pay type
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Deposit History Summary Report (fast path = PDHS): breaks out totals deposited by date, including deferred, installment, and regular (non-pay plan) orders
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Credit Card Deposit Schedule (fast path = PCCD): lists the pay plan totals scheduled for deposit for a range of dates
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Pending Payment Plan Deposits Report (fast path = PP, PD): lists pending pay plan orders for a range of invoice dates
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Deposit History Detail Report (fast path = PDHD): lists deposits processed during a specific date range. Within this date range, you can select to include only deposits for a specific authorization service, pay type, and status.
Additionally, the Submit Auto Deposits menu option produces the following reports:
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Unconfirmed Deposits Listing Report: lists each deposit that was not confirmed and processed, breaking out totals by deferred, installment, and regular (non-pay plan) invoices
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Auto Deposit Confirmation Report: breaks out totals sent and confirmed by deferred, installment, and regular (non-pay plan) orders for each pay type
More Information
Related to pay plans:
| See | For information on... |
|---|---|
|
Setting up order hold reason codes related to pay plans |
|
|
The screens you can use to review financial information on an order related to pay plans or to make changes to pay plan information in order inquiry |
|
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The changes you can make in order maintenance related to pay plans |
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Pay plan information on the Sales Journal by Pay Type |
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System control values related to pay plans |
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Secured features related to pay plans |
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Assigning a pay plan to a source code |
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Restricting an item from pay plans |
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Entering orders for pay plans |
| See | For information on... |
|---|---|
|
billing updates |
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order updates |
|
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authorization and deposit services |
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setup related to pay plans |
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setting up the pay plans themselves |
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processing deposits, handling rejected deposits, and reports related to pay plans |
Deferred/Installment Billing Setup
Purpose: Before you can used deferred or installment billing pay plans in your company, you must perform the necessary setup. Information requiring creation and setup includes:
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system control values
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secured features
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authorization service settings, including response codes and currency codes
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order hold reason codes
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source codes that point to specific pay plans
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items that would be exempt from pay plans
Set up pay plans: Additionally, you must set up the pay plans themselves using the Work with Flexible Payment Option Screen.
EXC flexible payment option: The system delivers the EXC Net Billing for Exchanges flexible payment option in the Working with Flexible Payment Options (WFPO) menu option to use during Credit Card Net Exchange Billing (the Use CC Net Exchange Billing (M23) system control value is selected). You cannot change or delete this flexible payment option and you cannot use this flexible payment option for deferred/installment billing. See Credit Card Net Exchange Billing for processing details.
In this topic:
System Control Values
| System Control Value | Description |
|---|---|
|
Select this field to be able to apply pay plans to orders. If this field is unselected, you will not be able to apply pay plans in order entry or order maintenance. |
|
|
Enter the number of times the same credit card number can be applied against a pay plan order before being evaluated for PV hold. This system control value works together with the Number of Days Flexible Payment Option is Used (F53) field, below. |
|
|
Enter the number of days the system should use for evaluating a credit card against the Number of Times Flexible Payment Option is Used (F52) field, above. If the same credit card number appears on orders more than the specified number of times within this number of days, the order goes on PV hold. Example: You set the Number of Times Flexible Payment Option is Used (F52) field to 5, and the Number of Days Flexible Payment Option is Used (F53) field to 14. If the same credit card number appears on pay plan orders more than 5 times in 14 days, the sixth and subsequent orders for the credit card go on PV hold. |
|
|
Dollar Threshold for Sold To Customer Orders with Flexible Payments (F54) |
Enter the total dollar amount a customer can have in pay plan orders before the system puts new orders on $P hold. Example: You set this field to 500.00. If a customer has 3 pay plan orders for a total of $450.00, and you take a new pay plan order for $75.00, the new order goes on $P hold. |
Note:
You must also create the Order Hold Reason Codes.
Each of these fields is available at the Edit Deferred/Installment Billing screen.
Secured Features
| Secured Feature | Description |
|---|---|
|
Controls the ability to select a pay plan other than the primary, system-selected plan in order entry |
|
|
Controls the ability to change information on an invoice once the order has been billed but before the invoice amount is fully deposited. The Change Invoice Pay Method Screen allows you to change the deposit release date, credit card information, the number of remaining installments; apply a cash payment; or writeoff, resubmit, or delete the deposit. This screen is available in order inquiry and Submit Rejected Deposits. |
Authorization Service Settings
When you are setting up an authorization service that supports deferred/installment billing, please note the following additional required settings:
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Industry code: enter your DBA number
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Deferred merchant ID
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Installment merchant ID
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Exclude from FPO: unselected
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Pay type cross reference Paytypes at the Work with Authorization Services Screen): Create a cross-reference for each pay type code you will allow on pay plan orders, using the vendor pay code information supplied by the authorization service.
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Currency cross reference (Currency at the Work with Authorization Services Screen): Create a cross-reference for each currency code you will use on pay plan orders, using the vendor currency code information supplied by the authorization service.
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Vendor responses (Responses at the Work with Authorization Services Screen): Optionally, you can select the Force deposit for FPO field.
You can also set up merchant ID overrides by entity.
Pay types: Each pay type eligible for deferred or installment billing should have the authorization service set up as its authorization and deposit service.
More information: See Working with Currency (WCUR) for more information on setting up pay types or currency codes.
Order Hold Reason Codes
The order hold reason codes you should set up in Establishing Order Hold Reason Codes (WOHR) as part of credit checking pay plan orders are described in this table:
| Hold Reason Code | Used When... |
|---|---|
|
P$ |
You enter an order that makes the sold to customer's total undeposited pay plan orders exceeds the amount specified in the Dollar Threshold for Sold To Customer Orders with Flexible Payments (F54) system control value; see System Control Values for an example. |
|
PV |
You enter an order that makes the sold to customer's total pay plan orders exceed the limit specified in the Number of Times Flexible Payment Option is Used (F52) system control value, for the period specified in the Number of Days Flexible Payment Option is Used (F53) system control value; see System Control Values for an example. |
|
SB |
Any open orders for the same sold to customer are put on hold because a deposit for this customer was rejected at the Auto Deposit Screen. |
|
CB |
Any open orders for the same credit card number are put on hold because a deposit for this credit card number was rejected at the Auto Deposit Screen. |
Additional and Recommended Setup
Optionally, you can set up the fields described below for use in deferred or installment pay plans.
Source code: You can use the following fields to control how pay plans apply in order entry if this source code is on the order header:
-
Flex pay code: If you enter a pay plan code, it gives the pay plan priority in the evaluation hierarchy the system uses when selecting the plans that apply to an order.
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Exclude FPO: If you select this field, orders for this source code are excluded from pay plans.
See Working with Source Codes (WSRC) for more information on setting up source codes.
Item: Select the Exclude FPO field to exclude any order containing the item from pay plans.
See Performing Initial Item Entry (MITM) for more information on setting up items.
Consolidate invoice: Selecting the Consolidated Invoice (B49) system control value if you use deferred or installment billing will simplify pay plan management considerably by limiting the number of invoices for an order.
Note:
In Order Management System 21.0 or higher, or Order Administration, you cannot select the Consolidated Invoice system control value if it is not already selected. If the system control value is currently selected (set to Y) and you deselect it (change it to N or blank), you cannot then change it back to selected. The option to consolidate invoices will be removed at a later date.
Pay plan settings: Using the following settings for each pay plan you create will simplify pay plan management:
-
Auto apply: Set this field alike for all pay plans that might apply to an order to simplify the pay plan selection hierarchy in order entry.
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Ship complete: Select this field to simplify pay plan management by limiting the number of invoices for an order.
See Working with Flexible Payment Options (WFPO).
Pay type setting for CyberSource: Use the Notify of installment setting for the payment method to control whether to send a commerceIndicator set to install in the subsequent authorization and deposit request to CyberSource for an order using a deferred or installment pay plan, or to have the information passed in the ccAuthService element similar to other subsequent authorizations, such as a split shipment.
For more information: See Working with Pay Types (WPAY) for more information on setting up pay types.
Important:
In order to determine how to set this flag if you offer deferred or installment billing and use CyberSource, you need to confirm the information required by the end processor for deferred or installment payment plans for each payment type.