Overview
Deposit Billing is a streamlined feature that allows businesses to capture deposit amounts during purchase order creation. It ensures that the invoiced deposit amount matches the purchase order, assigns deposit line items to a prepaid account code, and applies deposit credits to offset prepaid accounts when the final bill is paid.
Why is it beneficial?
Accuracy: Ensures consistency and accuracy in financial records by matching deposit amounts across documents.
Efficiency: Automates the deposit tracking process, saving time and reducing manual errors.
Financial Integrity: Maintains accurate records by offsetting prepaid accounts with deposit credits, reflecting the true financial position.
Deposit Billing simplifies and strengthens the financial management of deposit transactions, providing peace of mind and operational efficiency.
How does it work?
Capture Deposit Amount During Purchase Order Creation
Capture the deposit amount directly during purchase order creation, ensuring deposits are accounted for from the start.
Matching Invoiced Deposit Amounts
Match the invoiced deposit amount with the deposit amount specified in the purchase order, ensuring accuracy and consistency across your records.
Add Deposit Line Items to a Prepaid Account Code
Flexibly assign deposit line items to a designated prepaid account code, streamlining deposit tracking and management within your accounting system.
Offsetting Prepaid Accounts with Deposit Credits
When the final bill is paid, apply the deposit credit to offset the prepaid account. This ensures accurate and consistent financial records.
Learn more about our All New AP Module: here
Overview of Steps
Creating a Purchase Order with a deposit
Creating a Bill for the Deposit payment
Creating a Bill for the Remainder payment
Creating a Purchase Order with a deposit
There is a new Deposit field in the Totals section when creating a Purchase Order.
Important: The deposit amount cannot exceed the total cost of the PO, and cannot be a negative amount.
Creating a Bill for the deposit
Navigate to Accounts Payable → Create Bill
Select the applicable Purchase Order
The items from the PO will populate the bill
You will see two more line items: a deposit, and a negative deposit credit
Delete all line items other than the deposit line item by using the 3-dot options button then selecting Remove Item.
Allocate the deposit amount to your account code for prepaid expenses by using the 3-dot options button then selecting Edit Item.
Submit the bill.
Creating a Bill for the remainder invoice/payment
Navigate to Accounts Payable → Create Bill
Select the applicable Purchase Order
The items from the PO will populate the bill
You will also see the negative deposit credit which was removed from the bill when you created the bill for the deposit payment.
Allocate the negative deposit credit to your account code for prepaid expenses by clicking the 3-dot options button then selecting Edit Item.
Submit the bill.
Step 3 above re-allocates the deposit amount from the prepaid expenses to the appropriate account code for the item.
Note: Partial deposit billing is not supported. For example, if a deposit is $5000, it cannot be split into two separate $2500 deposits on a single bill.
Additional Information:
Deposit Payments is not compatible with the Pay by Credit Card option on Purchase Orders.
Taxes are not supported on Deposit payments.
The Deposit amount can only be edited on the PO and must not be associated with a bill, including draft bills. Ensure to remove the deposit from all bills editing the deposit amount.
AP Automation will automatically create bills with the deposit line items as seen above.