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This text refers to program version 8.3  

Create Menu - Sales Order - Down Payment Invoice

This page describes the 'Down Payment Invoice' function on the Create menus in the Sales Order browse and record windows. If you are using iOS or Android, the 'Down Payment Invoice' function is on the + menu.

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You should raise a Down Payment Invoice when you receive a deposit against an Order or if you wish to ask for one.

A Down Payment Invoice must be connected to a Sales Order. If you need to issue a Down Payment Invoice, you must therefore create a Sales Order first.

You can create a Down Payment Invoice in two ways:

  1. Open a Sales Order and use the 'Down Payment Invoice' function. Use this method to create a Down Payment Invoice before a Customer has paid a deposit. This function is described on this page.

  2. If a Customer pays a deposit before you have issued an Invoice, you can create an Invoice as described in point 1 and then enter the payment as a normal Receipt against that Invoice. An alternative method is to enter the deposit as a Prepayment Receipt against the relevant Sales Order. After marking the Receipt as OK and saving, select 'Down Payment' from the Create (Windows/Mac OS X) or + (iOS/Android) menu. The new Invoice will immediately be treated as paid. This option is described here.
The process of creating a Down Payment Invoice from an Order is governed by the Down Payments setting. In this setting, you can compose a standard text that will be printed on Down Payment Invoices, you should specify the percentage that will be used to calculate the value of each Down Payment, and you should specify the Sales Account that is to be credited from Down Payment Invoices.

You can specify that a dedicated Debtor Account will be used in Down Payment Invoices. To do this, enter the dedicated Debtor Account in each Order Class (in the Debtors A/C field on the 'Accounts' card). If you have not specified a Debtor Account in an Order Class or an Order does not belong to an Order Class, the usual Debtor Account will be used (taken from the Customer Category or the Account Usage S/L setting).

If you need Orders to pass through an approval process before you can create Down Payment Invoices from them, you can configure such a process using the Approval Rules register in the Business Alerts module. Please refer to the description of the Approval Status field on the 'Inv. Address' card for brief details about the approval process and here for full details.

To create a Down Payment Invoice from an Order, first open the Order in a record window. If the Order is already open in a record window, ensure you have saved all changes. Then select 'Down Payment Invoice' from the Create menu (Windows/Mac OS X) or + menu (iOS/Android).

The 'Down Payment Invoice' function will behave in one of two ways, depending on whether you are using the Details on Invoice option in the Down Payments setting. The two options are described in separate sections below the illustration. After creating a Down Payment Invoice, its value including VAT will be shown in the Downpaid column in the 'Orders: Browse' window:

Details on Invoice off

If you are not using the Details on Invoice option, a Down Payment Invoice will be created immediately you select the function and opened in a window entitled 'Invoice: Inspect'. This means that it has already been saved and is being opened for checking.

The Down Payment Invoice will contain a single row with the Down Payment amount. This row will contain the following information:
  • The Invoice text ("Deposit for Order No:" in the illustration) will be taken from the Text field in the Down Payments setting. If the Text field is empty, the Description of the Item specified in the same setting will be used.

  • The Down Payment value will be calculated by multiplying the Order value by a specific percentage. The percentage will be taken from the Down Payment Percentage field in the Customer Category to which the Customer belongs or, if that is blank, from the Percentage field in the Down Payments setting. You should also specify in the Down Payments setting whether this percentage is to be applied to the Order value including or excluding VAT. You can change the default Down Payment amount in the Invoice if necessary, but not to an amount that is greater than the value of the Order.

    If you create a second Down Payment Invoice from an Order, the default Down Payment amount will be zero. Again, you can change this figure if necessary, but not to an amount that means the total of the two Down Payment Invoices is greater than the value of the Order.

  • The Account in the Down Payment row (Account 194 in the illustration above) will be chosen as follows:

    1. If the originating Order belongs to an Order Class in which you have specified a Deposits Account, that Deposits Account will be used.

    2. If this is blank or the Order does not belong to an Order Class, the Sales Account in the Item specified in the Down Payments setting will be used.

    3. If no Sales Account has been specified in that Item, the Sales Account in the Item Group to which that Item belongs will be used.

    4. If this is blank, or if you have not specified an Item in the Down Payments setting, the Sales Account specified on the 'Sales' card of the Account Usage S/L setting in the Sales Ledger will be used.

In cases 2-4, the appropriate Sales Account for the Zone of the Order will be used. You can change this Account in a particular Down Payment Invoice if necessary.

  • The VAT Code in the Down Payment row will be taken from the VAT Code field in the Down Payments setting. If you have not specified a VAT Code there, it will be chosen in the same way as the Account: it will be taken from the Item specified in the Down Payments setting, from the Item Group to which this Item belongs or from the Account Usage S/L setting in the Sales Ledger will be used. In each case, the appropriate VAT Code for the Zone of the Order will be used.When you are sure the Down Payment Invoice is correct, mark it as OK and save it. As with all Invoices, this will cause the Sales Ledger to be updated and, if so defined in the Sub Systems setting in the Nominal Ledger and in the Number Series - Invoices setting, a Nominal Ledger Transaction to be created. You can then print the Invoice and send it to the Customer.

    In the Nominal Ledger Transaction, the Account shown in the first row of the Invoice will be credited with the value of the Down Payment, while the Debtor Account will be debited as usual. It might be that you need to use a dedicated Account to hold the value of a Down Payment until you issue the final Invoice. This has been done in the illustration, using Account 194.

    The postings illustrated above are not correct for some countries (e.g. Slovenia). As there has not yet been a Delivery or sales event, the postings to the Debtors and Sales Accounts should not occur. Instead, only the VAT should be posted. If you need such a Transaction from a Down Payment Invoice, select the Post VAT Only from Down Payments option on the 'VAT / Tax' card in the Account Usage S/L setting. The VAT will be credited to the Output VAT Account and debited to the VAT (A/C) Account, also specified on the 'VAT / Tax' card in the Account Usage S/L setting.

    After delivering the Items on the Order, raise the final Invoice from the Order in the usual way (e.g. from the Create menu in the Order or Delivery or using a Maintenance function such as 'Invoice Delivered Orders'). This Invoice will contain a row deducting the Down Payment amount. The effect will be that the aggregate total of the Down Payment Invoice and the final Invoice will equal the Order total.

    In the resulting Nominal Ledger Transaction, the Down Payment Account will be debited with the Down Payment amount.

    Details on Invoice on

    If you are using the Details on Invoice option in the Down Payments setting, a 'Specify Down Payment Invoice' window will open when you select the function:

    Enter the percentage that is to be used to calculate the value of the Down Payment Invoice (the default is the standard percentage from the Customer Category or from the Down Payments setting, and you cannot enter a figure greater than 100%).

    If you have already created at least one Down Payment Invoice from an Order and you want to create a new Invoice for the remaining Order amount, enter 100 as the Percentage and select the Use Remaining % option. If you do not select this option while entering a Percentage that is too high, the new Invoice will not be created. A Percentage is too high if it means that the total value of the existing Down Payment Invoices plus the new one would be greater than the value of the Order.

    When you press [Run], a Down Payment Invoice will be created:

    The Order Items will be listed individually in the Down Payment Invoice, the Down Payment percentage having been applied to the Sum of each one. The choice in the Down Payments setting whether to apply the percentage to sums including or excluding VAT will not be used.

    The Account in the Down Payment row (Account 194 in the illustration above) will be chosen as follows:

    1. If the originating Order belongs to an Order Class in which you have specified a Deposits Account, that Deposits Account will be used.

    2. If this is blank or the Order does not belong to an Order Class, the Sales Account in the Item specified in the Down Payments setting will be used.

    3. If no Sales Account has been specified in that Item, the Sales Account in the Item Group to which that Item belongs will be used.

    4. If this is blank, or if you have not specified an Item in the Down Payments setting, the Sales Account specified on the 'Sales' card of the Account Usage S/L setting in the Sales Ledger will be used.
    In cases 2-4, the appropriate Sales Account for the Zone of the Order will be used. You can change this Account in a particular Down Payment Invoice row if necessary.

    One reason for using the Details on Invoice option is so that VAT in a Down Payment can be calculated using the VAT Codes of each Item in the Order instead of an overall VAT Code. The VAT Code in each Order row will therefore be copied to the corresponding row in the Down Payment. If you are using the Details on Invoice option for this reason, do not specify a VAT Code in the Down Payments setting. If you do, this VAT Code will be used in each row in the Down Payment, which would defeat the purpose of the Details on Invoice option.

    When you are sure the Down Payment Invoice is correct, mark it as OK and save it. As with all Invoices, this will cause the Sales Ledger to be updated and, if so defined in the Sub Systems setting in the Nominal Ledger and in the Number Series - Invoices setting, a Nominal Ledger Transaction to be created. You can then print the Invoice and send it to the Customer.

    In the Nominal Ledger Transaction, the Account in the each row in the Invoice will be credited with the Down Payment value in that row, while the Debtor Account will be debited as usual. It might be that you need to use a dedicated Account to hold the value of a Down Payment until you issue the final Invoice. This has been done in the illustration, using Account 194.

    The postings illustrated above are not correct for some countries (e.g. Slovenia). As there has not yet been a Delivery or sales event, the postings to the Debtors and Sales Accounts should not occur. Instead, only the VAT should be posted. If you need such a Transaction from a Down Payment Invoice, select the Post VAT Only from Down Payments option on the 'VAT / Tax' card in the Account Usage S/L setting. The VAT will be credited to the Output VAT Account and debited to the VAT (A/C) Account, also specified on the 'VAT / Tax' card in the Account Usage S/L setting.

    After delivering the Items on the Order, raise the final Invoice from the Order in the usual way (e.g. from the Create menu in the Order or Delivery or using a Maintenance function such as ''Invoice Delivered Orders'). This Invoice will contain rows deducting the Down Payment amounts. The effect will be that the aggregate total of the Down Payment Invoice and the final Invoice will equal the Order total.

    In the resulting Nominal Ledger Transaction, the Down Payment Accounts in each row will be debited with the relevant Down Payment amounts.

    Deleting a Down Payment Invoice

    If you create a Down Payment Invoice by mistake using this function, you can delete it using this procedure, providing you haven't saved it after marking it as OK:
    1. Set the value of the Invoice to zero. Do this by removing every row from the Invoice or by changing all quantities to zero.

    2. Save the Invoice.

    3. Delete the Invoice using the 'Delete' command on the Record menu.

    Crediting a Down Payment Invoice

    If you need to reverse a Down Payment Invoice, follow the standard crediting procedure. Open the Down Payment Invoice and select 'Credit Note' from the Create menu, then mark the resulting Credit Note as OK and save. Using the 'Credit Note' function will ensure that Downpaid figure in the 'Orders: Browse' window will be updated with the value of the Credit Note. If you try to reverse a Down Payment using other methods (e.g. creating a second Down Payment Invoice from the Order in which the Down Payment value is negative), the Downpaid figure in the 'Orders: Browse' window will not be updated. It is also not possible to create a Credit Note by duplicating a Down Payment Invoice and changing the Payment Term.

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    The Sales Order register in Standard ERP:

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