Managing Prepayments of Deposits in the Customer Order Process

Introduction

A deposit payment is defined as a payment that must be placed before releasing the acquisition of goods. Stock supplied through hard-coded order-initiated acquisition orders or supply chain orders is blocked from release until the deposit is paid by the customer.

This is similar to the prepayment solution for customer orders connected to advance invoicing processes activated with the 'Adv invoicing' setting type 3-'Adv invoicing allowed. Prepayment calculated' in 'CO Type. Open' (OIS010).

Use of deposit

During customer order entry, a check for deposit is performed. If there is a valid setup in 'Advance Invoice Selection Table. Open' (OIS121), the deposit amount is automatically calculated and assigned to the order.

When leaving the order header, 'Customer Order Deposit. Open' (OIS157) is started automatically, where a list of deposit and remaining balance amounts per planned payment date is displayed including VAT amounts. The deposit amount displayed in (OIS157) at order level is the sum of its calculated value per its order lines as displayed in 'Customer Order Deposit Lines. Open' (OIS158).

For an existing order, the deposit program can be launched by selecting the 71='Customer Order Deposit. Open' option in 'Customer Order. Open Toolbox' (OIS300).

Note: The payment date is not a legally agreed payment date, as the payment term, etc. Its only purpose is to indicate when the different payments are expected. For the deposit entry, the expectation is that the customer pays the same day; the remaining balance is to be paid once the goods are expected to arrive at inventory, that is, the order lines planning date.

Setup

These criteria must be fulfilled for the deposit to be valid for a customer order:

Use a customer order type with the 'Adv invoicing' setting set up with the 5-'Deposit' alternative in (OIS010).
Use a payment term with the 'Payment prop' setting selected in 'Payment Term. Open' (CRS075).
If the 'Payment prop' check box is not selected, the order is treated as if 'Adv invoicing' is set to 1-'Advance invoicing allowed'.
To launch the cash desk for payment of the deposit, the 'Cash dsk active' setting must be selected in (OIS010).
To have specific payment terms for the deposit, the 'Deposit payterm' field must be defined in (OIS010).

Change a deposit amount connected to the customer order

A manual change of the deposit amount is made on the order line level in (OIS158).

The deposit line program can be launched by selecting the 11='Prepayment lines' option in (OIS157) or 72='Customer Order Deposit Line. Open' option in (OIS300).

The advance invoice type controls if a manual change of the deposit is allowed and defines a tolerance percentage for the change, per setup in 'Advance Invoice Type. Open' (OIS122).

Print of advance payment document and order confirmation

When you are ready with the customer order, you must print an advance payment document and hand it to the customer for the deposit payment.

In addition, you can print an order confirmation document if an overview of the entire order is requested by the customer, that is, all order lines including order totals.

Use the 6-'Print' option in (OIS157) to print the advance payment document for the deposit and the F14-'Customer Order. Print Confirmation' action in (OIS157) to print the order confirmation.

There is deposit information available on both documents in these XML sections:

Order confirmation document, both at the order line level (XML section type PREPAY_LIN on level 5) and on the order level (XML section type PREPAY and PPAY_TAX on level 3).
Advance payment document (OIS199PF variant 04) at the order line level (XML section type PREPAY_LIN on level 5).

Payment of the deposit

Payment of the deposit creates an advance invoice per VAT code. The advanced invoices are automatically reconciled with the payment, as for 'Adv invoicing' type 3. The difference from 'Adv invoicing' type 3 is that the payment of the deposit does not create one advance invoice with a default VAT code.

The advance invoices can be configured not to be printed, as the customer instead gains a receipt upon payment of the deposit against the advance payment document.

The 'No printout' setting on 'Settings - Customer Order Invoicing' (CRS722/F) controls if the advance invoice is printed. If selected, the advance invoice is not printed, and the delivery invoice references the advance payment document instead of the advance invoice.

Release for delivery and invoice

Once the goods have arrived in inventory, there are several ways to manage the delivery and invoice process to the customer.

A customer payment before delivery is not required in this solution, even though it might be a best practice within the company.

Note: The removal of this prerequisite is different from processing orders with CO types configured for 'Adv invoicing' type 3.

You can release the goods for delivery from (OIS157) if everything on a 'Remaining balance' record is allocated and is to be delivered at the same time. (There are several 'Remaining balance' records if the order lines have different planning dates.) Use the 21-'Release for delivery' related option to process the delivery through the normal dispatch flow.

Use the 22-'Deliver and invoice' related option to bypass the normal dispatch flow and directly invoice the delivery.

You can also release the goods for delivery from (OIS158). Here you can also release the goods if not all the goods for a 'Remaining balance' record should be delivered simultaneously.

Use sorting order 1 when releasing goods for delivery in (OIS158). This is the default sorting order when called from the menu or from (OIS300). The F14-'Propose quantity' action proposes the allocated quantity for release. You can enter or change the quantity manually. Use the F17-'Release for delivery' action to process the entered quantities through the normal dispatch flow. Use the F18-'Deliver and invoice' action to bypass the normal dispatch flow and directly invoice the delivery.

There is deposit information available on the delivery invoice at the order line level (XML section type PREPAY_LIN on level 5).

Note: Both '040 Released for picking' on 'Dispatch Policy. Open' (MWS010/E) and '320 Next delivery released for picking' on (MWS010/G) should be selected. If they are not selected, you still need to manually release the delivery for picking and process the delivery through the normal dispatch flow and invoicing.

Cancellation of order and refund of the deposit

A deposit refund can be manually created in 'Customer Order. Invoice in Advance' (OIS105) when an order is cancelled.

Note: Advance invoices that are created manually in (OIS105) are not settled against the delivery invoice (in case it was not the complete order that was cancelled). Therefore, they also remain in the 70-'Adv invoiced' status. You can update them to the 80-'Inv and settled' status with 'Correction ID' OI04 in 'Program Problem. Solve' (CRS418) if it is important to get them in status 80.

Limitations

You cannot use a deposit customer order type (when you create a customer order in OIS100) in a Sales Tax Division. That is, in a division where the 'Tax method' > 1 on 'Company. Connect Division' (MNS100/G).
The prepayment deduct method 1='Offset as credit note' in (CRS722) is not supported.
Different payment terms per order line are not supported. The reason for this is that it is the 'Payment prop' check box on the 'Payment terms' on the customer order header that dictates whether the order is executed as a deposit order or a normal order.
Order total discount is not considered when calculating the deposit and the remaining balance. This means that the delivery invoice becomes negative if the order total discount is greater than the deposit.
Discount in kind is not supported.
Charge calculation methods 1-'Fct*gross prc' and 2-'Fct*net prc' are not supported.
Kit items are not supported.
Core items are not supported.
Warranty management is not supported.
Copy from a normal order to a deposit managed order is not supported.
Quotes through EQM are not supported.
Automatic closing of payment proposal through 'CO Delivery. Close Payment Proposal' (OIS952) is not supported.
Rounding applied to the deposit ('Rnd-off cat' on (OIS010/K)) is not settled on the delivery invoice. Example: If a $0.25 rounding is paid on the deposit amount $99.75 (pay $100.00), only $99.75 is deducted on the delivery invoice.
Note: The rounding amount creates a separate advance invoice record.
'VAT sum method' 2-'Base mult rate' gives rounding differences since the VAT calculation is split up on two smaller base amounts (a deposit and a remaining balance) compared to when calculating the VAT for the full order amount.
Amount charges with 'Debit frequency' 1-'First delivery' and using 'Release for delivery' are not supported. The charge is incorrectly included in the amount for the new remaining balance too. The invoiced amount is however correct.