Sage 100 How to Process Customer Deposits in Accounts Receivable and Sales Order

There are two primary ways of entering customer deposits in Sage 100 ERP.  The first is entering Pre-payments in A/R Cash Receipts Entry. The Second is entering the customer deposit directly into the Sales Order or S/O Invoice Deposit Amount field located on the Totals Tab.

Customer Deposits in Sales Order

Customer deposits can be entered on a sales order, and posted on an invoice to a special liability holding account that allows you to track cash received for items not yet invoiced. This Customer Deposit account is credited with the deposit amount when the Accounts Receivable Cash Receipts Entry update is performed, and debited when a sales order invoice with a customer deposit is updated. The Customer Deposit account postings are detailed with reference and customer name information. If the Asset Account field in Accounts Receivable Payment Type Maintenance is left blank, the Customer Deposit account specified at the Customer Deposits Account field on the Sales Order Options Additional tab is used.

To process customer deposits:

1. In Sales Order Options establish an account for Customer Deposits. On the Sales Order Setup menu, click Sales Order Options. Click the Additional Tab. Select the Post Customer Deposits by Division check box to use separate deposit accounts for each division. Clear the check box if you do not want to use separate accounts. At the Customer Deposits Account field, enter the general ledger account established in your chart of accounts for customer deposits.
2. In Accounts Receivable enter the Cash Receipt using GL option and post to the Customer Deposit Account. Although the customer deposit information is entered in Sales Order Entry and Invoice Data Entry, all cash receipts, including customer deposits, must be entered using Accounts Receivable Cash Receipts Entry. Enter each customer deposit separately as a cash deposit type, even if the customer deposit was paid by credit card (select Cash at the Deposit Type field in the Cash Receipts Deposit window). Use G/L Option by using the G/L Account field on the Accounts Receivable Cash Receipts Entry Lines tab to distribute the deposit amount to the Customer Deposits account. Make sure you enter the Customer Deposits account specified in Sales Order Options or Accounts Receivable Payment Type Maintenance. Note:  If the payment type used is not Check, you can enter the payment type at the Check Number field. The Customer Deposits account is credited with the deposit amount when the Cash Receipts Entry update is performed. The balance of the Customer Deposit account at any time represents the total outstanding deposits (deposits received for sales orders that are not yet invoiced).
3. In Sales Order or Sales Order Invoice data entry, you may enter a deposit on the total screen. On the Sales Order Main menu, click Sales Order Entry. On the Totals tab, enter the following information depending on your selection at the Payment Type field:

• • • Check Number and Deposit Amount
    • Credit Card Number
    • Reference Number

4. The reference number is reflected in the sales order as a memo amount. The deposit amount is printed on the sales order acknowledgment and listed on the Open Sales Order Report.

Note: General ledger postings and adjustment of the customer balance are not made until the order is invoiced.

5. On the Sales Order Main menu, click Invoice Data Entry. At the Invoice Number field, enter an invoice for the sales order. The deposit amount entered on the sales order is recorded against the invoice. For a one-step invoice that does not have a sales order, on the Invoice Data Entry Totals tab, enter the Deposit Amount and Check Number. The deposit applied is printed on the invoice and also reported on the Deposit Recap and the Daily Sales Journal. The deposit available also appears. When the customer invoice is updated to the Open Invoice file, after the Sales Journal is printed, the invoice balance is calculated as the invoice total less the deposit amount applied.   General ledger postings from the invoice update debit the deposit amount to the Customer Deposit account and credit the Accounts Receivable account.

For example: Invoice Total = $100 S/O Invoice Posting

Deposit $ 25 Debits Customer Deposit Account 

Invoice Balance = $ 75 Credits A/R Account

A/R Cash Receipts $ 25 Debits Cash Account

Use GL option Credit Customer Deposits Account

Customer Deposit in Accounts Receivable

Customer Pre-payments in Cash Receipt Entry

While in Cash Receipts Entry, enter the customer and invoice number.  You will need to know, or at least record the invoice number used for the pre-payment. Record the invoice as a pre-payment using (-PP). This will create an entry for the customer with the invoice number including a -PP after it.  When you finally invoice the customer, you MUST use this same invoice number. Sage MAS 90 will automatically apply the pre-payment to the open invoice when the sales journal is posted or update.

When using a “prepay” invoice to record cash deposit received before the invoice is generated, it is important to use the same invoice number when creating the invoice in Invoice Data Entry. The system is designed to match the invoice number with the extension -PP to the same invoice number with the extension -IN or -DM. By using the same invoice number for both the prepayment and the invoice, you will not need to manually apply these invoices using Cash Receipts Entry.  You can also use Match Credits to Open Invoices to apply credits to open invoices.

If the same invoice number cannot be used for both the prepayment and the invoice, the suggested alternative is to use a different numbering system for prepaying invoices entered using Cash Receipts Entry. For example, use the date as part of the invoice number to reduce the chance of duplicating the prepayment invoice number. Apply the credit pre-payment against the open invoice using Cash Receipts Entry.

Support

If necessary, seek the assistance of Acute Data Systems to help provide assistance with this process.