• avb3
  • Senior Member
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  • From: Canada
  • Registered: 07/10/2009
  • Posts: 53

Topic: How to handle customer deposits on sales?

First of all, I want to thank for all the prompt answers by the administrators. I know a lot value that.

Here is the situation:

1. Customer wants to order an item that takes some time to come in. So, a "sales order entry" is performed.
2. Customer needs to make a 50% deposit on this order before the order is finalized. (Accounting entries would be DR Cash and CR Customer Deposits)

The question is, how can this be handled in FA. I tried entering a negative amount in the "sales order entry", but that did not take.

Further questions, once the order comes in, how do I clear out the customer deposit from the liability ledger and apply it to the sales invoice that will be generated?

Is this possible with FA, or do we have to figure out a work around?

  • Registered: 12/25/2007
  • Posts: 2,448

Re: How to handle customer deposits on sales?

Payments are allocated to invoices, not sales orders, so first you have to register payment with Customer Payments. Then, when final sales invoice for this SO is issued you have to allocate this payment against the invoice.

Janusz

  • rodw
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  • From: Australia
  • Registered: 03/01/2010
  • Posts: 115

Re: How to handle customer deposits on sales?

Bump. Is there any plans to allow us to enter deposits on sales orders? That would be a very habdy feature for a lot of us I am sure.

[b]RodW[/b]
Brisbane, QLD, Australia
  • Registered: 12/25/2007
  • Posts: 2,448

Re: How to handle customer deposits on sales?

You mean prompt payment? There is no relation between SO and payment implemented in FA database, but you can easily add link to customer payments on final sales order screen in sales_order_entry.php, to speedup the navigation.

Janusz

  • rodw
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  • From: Australia
  • Registered: 03/01/2010
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Re: How to handle customer deposits on sales?

I just noticed that a bank account is displayed on sales order entry screen in the V 2.4 demo.

Does this mean that V 2.4 will support accepting deposits at the time of accepting a sales order?

This remains a major omission from FA at present as I am sure there are many business that take a full or partial deposit at the time of order. It would be great if there was a payment entry section on the order entry screen that allowed a deposit to be entered and allocated against this customer transaction.

Being able to add an unallocated payment at time of taking an order is not really the best approach as there is no link at th etime of invoiceing that the credit exists on the customer's account.

I think this feature is a worthy addition to the Wishlist on the Wiki.

[b]RodW[/b]
Brisbane, QLD, Australia
  • ed10
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  • From: USA
  • Registered: 08/26/2010
  • Posts: 132

Re: How to handle customer deposits on sales?

I agree with Rodw.  We get paid in full on all special orders and they may not be invoiced for a few days.

ed

  • Registered: 12/25/2007
  • Posts: 2,448

Re: How to handle customer deposits on sales?

Nothing changed yet in 2.4 regarding sales orders. The account you see on 2.4 demo is used later at invoicing. We will consider prepayments against sales orders again.
Janusz

  • rodw
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  • Registered: 03/01/2010
  • Posts: 115

Re: How to handle customer deposits on sales?

Janusz, It would be great to see this added to the 2.4 release. There are many businesses who accept deposits and it is not sound practice to have them floating around the system as unallocated customer payments. Here is a short list of businesses I know that routinely accept deposits becasue I have paid deposits when making an order.

Me -  becasue I don't trust all my customers smile
ed10 on special orders above
Commercial Printers
Custom Manufacturers of all kinds who make to order
Builders
Cabinet makers
New and Used car sales
Car accessories
Caravan sales
Appliance sales

In many instances, it is considered sound busness practice to ask for a deposit to confirm the order and sales staff are trained to do this. FA needs to be able to support  these business practices.

You can't invoice at the time of order becasue that wil incurr tax liabilities and you also loose the  order tracking abilities of FA which is really fantastic.

I am surprised there was not more support from users over this, maybe those that really need this feature have moved on and chosen another accounting package?

Rod

[b]RodW[/b]
Brisbane, QLD, Australia

9 Reply by mrbgoch (edited by mrbgoch 02/26/2011 03:44:18 am)

  • From: NC, USA
  • Registered: 09/22/2007
  • Posts: 15

Re: How to handle customer deposits on sales?

I agree with rodw 100%.

At this time it's standard practice to ask for a "down payment" before you generate an invoice to a customer. The parts will be shipped much later to the customer, but before you initiate the complete order/sales process you do  want to get a certain promise from your customer, that he will pay the parts and not vanish in the meantime.

Right now, we are using a "out of FA" pro forma invoice for the down payment and when we receive the payment it will be booked in FA as prepayments from customers (unallocated). When the actual part will be shipped and invoiced the full  amount of the part should be invoiced (as normal), but then you should be able to add the unallocated downpayment to the gross invoice and ask the customer for the Net payment.

All the information is already available somewhere in FA, but you need to be able to combine the down payment to the sales invoice.

  • Registered: 12/25/2007
  • Posts: 2,448

Re: How to handle customer deposits on sales?

Ok, seems there is some wider interest in this feature, so we will have to give it higher priority . Thanks you all for clarifications. 

Janusz

  • rodw
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  • From: Australia
  • Registered: 03/01/2010
  • Posts: 115

Re: How to handle customer deposits on sales?

itronics wrote:

Ok, seems there is some wider interest in this feature, so we will have to give it higher priority . Thanks you all for clarifications. 

Janusz

Thank you Januz, we will look forward to it.

[b]RodW[/b]
Brisbane, QLD, Australia
  • From: Indonesia
  • Registered: 12/27/2011
  • Posts: 18

Re: How to handle customer deposits on sales?

Hi Joe,

I try to register customer deposit in customer payment menu. But the problem is Journal entry to GL made by this entry is (Dr Cash/Bank; Cr Account Receivable (Customer) this is wrong. The Journal should show Dr Bank/Cash ; Cr Customer Deposit account (Liabilities).

  • joe
  • Administrator
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: How to handle customer deposits on sales?

I would rather use the Bank Deposit form in Banking and General Ledger for doing that. here you can select which credit account you want to use.

/Joe

  • From: NC, USA
  • Registered: 09/22/2007
  • Posts: 15

Re: How to handle customer deposits on sales?

itronics wrote:

Ok, seems there is some wider interest in this feature, so we will have to give it higher priority . Thanks you all for clarifications. 

Janusz

... bump ....

any updates on this issue?

  • Registered: 12/25/2007
  • Posts: 2,448

Re: How to handle customer deposits on sales?

This is planned to be inally implemented in FA 2.4 i.e. next major release.
Janusz

  • pbro
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  • Registered: 05/19/2012
  • Posts: 2

Re: How to handle customer deposits on sales?

In job shop manufacturing we always require a down payment before starting work on any project. We typically go 50% when the order is placed and 50% when delivered, but many alternatives are also used, 50% prior, 25% at delivery, 25% a month later. We need to purchase materials when the project starts, and need to assurance that the customer will pay.

Atte.,
PBB

  • From: South Africa
  • Registered: 11/24/2009
  • Posts: 275

Re: How to handle customer deposits on sales?

I found a way to work around this.

1. Go to Banking and general ledger.
2. Select deposit
3. Select correct bank account receiving the deposit
4. Select customer
5. Use debtors control account
6. Add Deposit details in the memo section with order reference number. Add line and process
7. Process the deposit.

The age analysis as well as the statement will now show that the debtor has a credit.
Once you have completed the invoice, go to SALES and Allocate Customer Payments or Credit Adjustment Notes and allocate the deposit to the specific invoice.

The same can be done for a supplier wher you made a deposit to acquire or reserve something.

Hope this helps.

Wynand

seahawk's Website

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: How to handle customer deposits on sales?

@seahawk: Thanks. Wiki-ed it.

apmuthu's Website