Deposits and Pre-Payments Management

Deposit, Pre-Payment and Payment Received Management

When dealing with invoices, CAPITAL can manage and track deposits, pre-payments and general payments under the following circumstances:

The recording of the method of payment when entering cash sales. E.g., cash, cheque, credit card, EFTPOS, voucher, etc.
The payment received for accounts with C.O.D. terms.
Deposits on cash sale orders.
Deposits and pre-payments for standard (normal) accounts. The recording of the method of payment when entering cash sales. E.g., cash, cheque, credit card, EFTPOS, voucher, etc
Receiving Payment For Cash Sales

When an account's type is set to "cash" or "credit card" CAPITAL will automatically prompt you for the payment method if this option is activated in INSTALLATION Workshop.

CAPITAL assumes that all cash sale transactions are paid as the transactions are entered. If the transaction is not paid immediately, the transaction should be assigned to a C.O.D. or standard account rather than a cash sale account. In a point-of-sale environment most sales will tend to be cash or equivalent. E.g., cheque, credit card, etc.

Transactions assigned to cash accounts are both invoices and payments. They effect sales and your cash book. The concept is similar to that of a supermarket receipt, where the items purchased are listed on the docket and also treated as paid for.

When a cash sale is totalled, you will be prompted to enter the payment method(s) used. These can include cash, cheque, credit card, EFTPOS, voucher, direct deposit, and others. Up to 10 different methods of payment can be recorded for any single transaction.

For example, if you raise a cash invoice for $100 and total the transaction, you will be prompted to indicate how the transaction was paid. This might be by $50 cash and $50 cheque. $50 would be entered in the cash field, and $50 in the cheque field. These amounts are transferred to your bank account or petty cash account. (Where the received money goes depends on how you have set-up your cash management system to redirect funds.)

In summary, running a cash account is essentially a short-cut as you don't have to reconcile or balance payments against a standard account if you use a cash account. Every transaction is assumed fully paid, so a single transaction in fact serves the purpose of both an invoice and a cash receipt in a single combined transaction. Its function is useful, but limited to the specific purpose of processing point-of-sale style transactions.

To activate payment method recording do the following:

Start INSTALLATION Workshop.
Select from the menu Install|Cash Management|Payment Methods.
Tick Record Payment Methods.
Click on Finished.
Select File|Exit & save your changes.

To set-up a cash account do the following:

Select from the main menu inside CAPITAL, Section|Customers...
Press the Find button and locate the account you wish to change or click on Add to create a new account.
Edit or add any applicable account details.
Click on the Settings tab button.
Change the Account type to Cash or Credit Card.
Save the account.

You cannot change an account's type after you have begun to assign transactions to it.

C.O.D (Cash On Delivery) Payments

A standard account with zero terms is referred to as a C.O.D. account. It is just a variation on a standard account with standard terms. The system assumes that you want the money right away, and will prompt for immediate payment. If no payment is forthcoming the payment is deferred, otherwise a separate payment transaction is generated by the system which is automatically linked to the invoice. Once the payment is created it has to be edited manually if you want to change it. This is quite different from a cash transaction, but is similar in that it provides another form of short-cut. (You don't have to go into another area of the system and enter a payment separately.)

Unlike a cash transaction, however, in a C.O.D., the payment amount does not have to equal the invoice total. It can be zero or less than the invoice total. (At times it is possible to receive no payment, even when the account is supposed to be C.O.D. At other times you will need to enter the invoice in the computer and print it, in order to present it so that you can collect payment. The payment is entered later.)

To set-up a C.O.D account do the following:

Select from the main menu inside CAPITAL, Section|Customers...
Press the Find button and locate the account you wish to change or click on Add to create a new account.
Edit or add any applicable account details.
Click on the Terms tab button.
Change the Credit amount to 0.00 (zero).
Save the account.

Only standard accounts can be set to C.O.D type. Cash accounts do not process terms and therefore ignore term settings.

Large C.O.D accounts are difficult to manage or reconcile. If you have doubts about collecting immediate payment from your customers, set each of them up as an individual C.O.D account. Try to avoid using a single generic C.O.D account for all customers who have not yet paid you!

Deposit Tracking For Cash Sales

This is a specialised form of deposit tracking for invoice based cash orders. A cash order is similar in concept to a normal sales order, however a cash order is placed through the invoicing system and not the sales order entry system. A cash order is a document that lists the items to be ordered and places those items on back order. (They appear in the Back Order Control Centre.) Any amount received on a cash order is treated as a deposit. When the back order is released, the deposit is automatically deducted from the back order invoice.

Cash orders can only be assigned to cash accounts. If you wish to track deposits for regular (standard) accounts, see the next section.

To set-up cash order transactions to track deposits do the following:

Start INSTALLATION Workshop.
Select from the menu Install|Invoicing|Transaction Behaviour.
You must assign a transaction type to the system that will generate invoice cash orders. Ensure that you select a transaction type that is not used for any other purpose. Under Order Invoice 1 select this transaction. This ensures that any stock items assigned to this transaction are automatically back ordered.
Under Sales Orders select the same transaction type as selected in step 3.
Click on Finished.
Select File|Exit & save changes.

Now go to invoicing to create cash orders. Be sure to select the transaction type you specified in steps 3 and 4 above. Any stock entered on the transaction will not be charged on the cash order transaction. However, any item you enter without a product code will be treated as a deposit amount.

When you are ready to deliver the goods to the customer, go to the Back Order Control Centre and release the back ordered items. The deposit amount will automatically be deducted from the invoice total.

Deposits/Pre-Payments For Standard Accounts

You may enter deposits or pre-payments for standard accounts (accounts that are not internal or cash type) via the order entry or invoicing system. To record a deposit or pre-payment amount select Payment Received from the transaction's File menu.

When back ordered items are released, or when further invoices are raised, the deposit or pre-payment amount can be recorded against the new transaction. CAPITAL will advise you that pre-payments are assigned to the account and will offer to allocate them to your new transactions, automatically.

For example, a sales order for $1000 might be entered in the system. At the time of entering the sales order it is possible to select Payment Received from the File menu and enter an amount of, say, $100. (It is also possible to set the system to automatically prompt you for a deposit amount when saving the transaction. See INSTALLATION Workshop, Install|Cash Management|Deposits & Pre-payments for more details.)

The sales order is then sent to the Back Order Control Centre. When the goods are released and the final invoice produced, the amount of the original deposit or pre-payment can be noted on the transaction. CAPITAL will remind you that pre-payments are sitting under the customer's account and will give you the option to offset the pre-payment against the invoice raised.

If you opt to offset the pre-payment against the invoice raised, CAPITAL will automatically allocate (assign) the pre-payment to the invoice after you save it.

It is also possible to show the payment amount originally received by placing the PAID field on your invoice transaction (using the Visual Builder form editor). You can also optionally include the UNPAID field on the transaction. This amount is the invoice total less the amount not yet paid. This can be useful in helping your customer determine the balance owed.

For a tutorial on working with the Deposits/Pre-payments system see the topic: Deposit & Pre-Payments Tutorial.

Deposits/Pre-Payments & The General Ledger

When a deposit/pre-payment is created for a sales order or an invoice, the value of the deposit/pre-payment can be directed to an account controlled by the general ledger set of the cash book that the payment is assigned to. (That is to say, the cash book where the payment will be deposited.)

In CAPITAL GL Controller specify under Pre-payments, the account you want deposits/pre-payments posted to. (See Maintenance|General Ledger Sets on the CAPITAL GL Controller main menu.)

For example, if the Pre-payment account field is set to "Customer Deposits" in the liabilities section of your chart of accounts, the journal posting after the creation of the deposit/pre-payment would be:

Credit Customer Deposits
Debit Bank Account

When a deposit/pre-payment is allocated to an invoice, the journal posting is:

Debit Customer Deposits
Credit Debtors

Hints & Tips For Deposits & Pre-Payments On Standard Accounts

If the invoice raised is less than the deposit or pre-payment amount, only the amount up to the invoice total will be offset against the pre-payment(s) pending.
You must activate payment method recording in INSTALLATION Workshop in order to be able to automatically track deposits/pre-payments.
You cannot track deposits/pre-payments for cash or internal accounts or C.O.D. accounts when invoicing.
Under INSTALLATION Workshop the suggested amount of the deposit/pre-payment can be set to calculate automatically. However, this will occur only if the deposit/pre-payment is equal to or more than $10. The calculated amount is always rounded down to the nearest whole dollar.
Add PAID to your invoice form using Visual Builder to show how much of the deposit/pre-payment has been allocated against an invoice. You can use UNPAID to show the amount left to pay.
All transactions entered through sales orders are considered by the system to be pre-payments. You can only enter C.O.D. payments when invoicing.
Credit limit warnings do not consider C.O.D. or deposit/pre-payment transactions. These types of transactions are only created after the sales order or invoice is saved. Until that occurs, credit limit warnings refer to the current status of the account.

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