Sales Order - Pre-payments/Deposits

Sales Order - Pre-payments/Deposits

Overview

Sales order prepayments are a common practice for businesses that require customers to pay upfront for goods or services before delivery. These prepayments help businesses secure revenue in advance, manage cash flow, and reduce the risk of non-payment. 

What is a Sales Order Prepayment?

A sales order prepayment is an advance payment made by a customer before the delivery of goods or services. This prepayment can be partial or full, depending on the terms agreed upon between the business and the customer. Prepayments are commonly required in industries where custom orders or high-value goods are involved, reducing the risk of non-payment after delivery.

Why Prepayments are Important?

  1. Risk Reduction: Requiring prepayments helps businesses reduce the risk of non-payment, especially for high-value or customized orders.
  2. Cash Flow Management: Prepayments improve cash flow by providing upfront funds that can be used to cover production or procurement costs before the goods or services are delivered.
  3. Commitment from Customers: Prepayments signal a customer's commitment to the order, reducing the chance of cancellations or order modifications.

Steps in Creating a Prepayment/Deposit:

  1. Navigate to the Sales Order for which the pre-payment/deposit is being made.
  2. Click Generate and choose Prepayment.
  3. Information such as the Customer, Date, Amount received and Prepayment number is prefilled but you can change the amount if you are receiving a  partial amount.
  4. Enter a Ref#, if applicable.
  5. Choose the appropriate choice for the Type toggle (Undeposited or Bank Account).
  6. Choose and enter the Account and the Payment Method.
  7. Click Save.



Generating a Prepayment


The prepayment can then be applied to the sales invoice automatically or manually.

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