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Customer Invoice to Cash

Contents

Introduction

The Customer Invoice to Cash process involves the process from the moment the invoice is created until the moment the customer's debt (payment) is settled/reconciled.  

Abstract Business Process

The abstract Customer invoice to cash business process is defined by the following diagram:

CustInvBusProcScrn.png

 

The process can be summarized in two steps:

Roles Involved

The following roles are involved within this process:

Configuration

Some configuration needs to be done before performing this process. Please refer to the Configuration Manual.

Step by Step

Issue the Sales Invoice

The Finance role should be used.

There are five ways of creating a Sales invoice:

1. Creating a Sales Invoice from Scratch

Using the Sales Management || Transactions || Sales Invoice window create a new record:

InvoiceToCash01.png

Fields to note:

Go to [Lines] tab and add one line per product:

InvoiceToCash02.png

Fields to note:

Back in the [Header] click the Complete button.

2. Generating Sales Invoices Automatically

Navigate to the Sales Management || Transactions || Generate Invoices menu item that opens a new window. Parameters entered here will describe the invoices to be generated automatically:

InvoiceToCash03.png

 

Fields to note:

Click OK and all orders pending to be invoiced that match the filters defined above will automatically be invoiced. A Sales Invoice document is created for each Business Partner.

When the process is finished, a message will be shown with the document numbers of the invoices that have been created.

To see the generated invoices, use the Sales Management || Transactions || Sales Invoice window.

3. Retrieving Lines from Sales Orders or Goods Shipments

Create a new invoice and fill all required fields inside [Header].

Please refer to the Creating an Invoice from Scratch section for description of fields in [Header].

Then, click the Create lines From button to bring up a new dialog:

InvoiceToCash04.png

 

The Order and Shipment/Receipt dropdowns will be filled with documents pending to be invoiced for the business partner of the invoice selected inside [Header]. After selecting a sales order or goods shipment, the lines pending to be invoiced will be shown in the grid. Select the desired line(s) and click OK. The selected line(s) will be copied into the [Lines] tab where they can be additionally manually edited (e.g. changing the quantity, unit price, etc...).Back in the [Header] complete the document using the Complete button.

4. Copying all Lines from an already existing Sales Invoice

Create a new invoice and fill all required fields inside [Header]. Please refer to the Creating an Invoice from Scratch section for description of fields in [Header].

Then, click the Copy Lines button to bring up a new dialog. Select the Sales Invoice from which the lines should be copied, select whether the price should be retrieved from the pricelist and click OK to execute.

This process can be repeated to select line of other Sales Invoices also.

5. Using the Create Invoices from Sales Orders screen

In the Create Invoices from Sales Orders screen, all Sales Order that are eligible for Sales Invoice creation are listed. Filters for date range, Business Partner and Organization can be applied. InvoiceToCash05.png Select the Sales Orders for which a Sales Invoice should be created and click Process to execute.

Linking of documents

When this process is finished, the original order, the underlying shipment and the final invoice will all be linked.For example, each shipment's line will be linked to the sales order line it delivers for. Within the [Lines] of the Goods Shipment window the user can click on the links to drill down.

InvoiceToCash06.png

Each sales invoice line will also be linked both to the sales order line and the shipment line it invoices. Within the [Lines] of the Sales Invoice window the user can click on the links to navigate to either of them.

InvoiceToCash08.png

The original sales order line will also have the Delivered Quantity and the Invoiced Quantity fields inside [Lines] updated. This way, sales staff can easily see the status of their orders.

InvoiceToCash07.png

From the Sales Order Header by clicking 'Linked Items', the connected Sales Invoice and Goods Shipment information is displayed and by clicking the links, the user can navigate to these documents.

InvoiceToCash09.png

Payment Plan

When completing an invoice, a payment plan will be created related to the invoice. Revise it inside [Payment Plan]:

InvoiceToCash10.png

These are the relevant fields:

A brief summary of the payment plan information of each invoice appears in the invoice header. These are the relevant fields:

InvoiceToCash11.png

At this point the payment status is Awaiting Payment

Monitor Payments

Using the Finance role, the Sales Management || Transactions || Sales Invoice window is available to search open invoices of a business partner and have a good overview of individual outstanding payments from invoices.

InvoiceToCash12.png



The Payment Report displays payments and their statuses:

PaymentReportCollectionselection.png

161210PaymentReportCollection2.png

To see which invoices need to be collected, you can filter in this report by the status 'Awaiting Payment'.

Also, you can either see all payments by leaving the overdue checkbox unselected or just the overdue payments by selecting the overdue checkbox.

Review Cash Forecast

The Finance role should be used.Forecast report is not available yet.

Review Aging Receivables

The Finance role should be used.Payment Aging Balance report is not available yet.

Perform Collection Actions

The following will be explained:

Receive Payments

There are two ways to receive a payment:

  1. using the Payment In screen
  2. using the Add Payment button directly within the corresponding Sales Invoice

Both are described below.

Payment In

Navigate to Financial Management || Receivables & Payables || Transactions || Payment In screen and create a new record. Fill out the information reflecting the amount received and the business partner involved.

InvoiceToCash13.png

Fields to note:

Press Add Payment Details button to link the amount to existing open transactions with the selected customer (orders or invoices).

    InvoiceToCash14.png

Fields to note:

If the amount paid is less than the outstanding amount, the system will offer the options to Write of the difference (See next section) or Leave as an underpayment (the remaining debt will be paid afterwards). In case that the amount paid is more than the outstanding amount, the system will offer the options to leave credit to be used later or refund amount to customer. When selecting the option to leave the credit to be used later, the available credit information will appear on future payments and can be selected to be used. When selecting the option to refund the amount to the customer, the system adds a credit payment.

Press Process button and select processing option (Action regarding document)

InvoiceToCash15.png

Fields to note:

The Payment Status is changed from Awaiting Payment to Payment Received.

After process completion, the description field is updated with Invoice and Order numbers and the amount left as credit.

InvoiceToCash16.png

Add Payment Button

It is also possible to register a payment directly against a sales invoice. Find the sales invoice and click Add Payment button to link a payment to the given invoice.

InvoiceToCash17.png

Fields to note:

The amount entered in Actual Payment field will be automatically spread among the pending debts. First, debts associated to the given invoice will be marked 'to be paid', and in case the amount is bigger that the grand total of the invoice then it will mark next invoices 'to be paid' till the whole amount is consumed.

If the amount paid is less than the outstanding amount, the system will offer the options to Write of the difference (See next section) or Leave as an underpayment (the remaining debt will be paid afterwards). In case that the amount paid is more than the outstanding amount, the system will offer the options to leave credit to be used later or refund amount to customer. When selecting the option to leave the credit to be used later, the available credit information will appear on future payments and can be selected to be used. When selecting the option to refund the amount to the customer, the system adds a credit payment.

Press Process button to complete the transaction.

InvoiceToCash18.png

Fields to note:

The payment status is changed from 'Awaiting Payment' to 'Payment Received'.

Write Off Bad Debt

When there is a difference between the amount paid and the outstanding amount which results into an underpayment, there is an option to write off the debt.For example, Customer A owes 758,01 euros but pays 758 euros via transfer. The remaining amount (0,01 euros) is so small that most of companies will no longer manage that debt and will write it off.

InvoiceToCash19.png

Just by selecting Write off the difference option, the remaining 0.01 euros will be posted in the ledger as a loss.

Execution Process

For collection there is no execution process defined, so the Execution Type is set to Manual. This means that the payment status Awaiting Execution is not used for collection.

When needed developers have the option to create a module with a payment execution process for different payment methods such as Bill of Exchange, Promissory Notes, etc.

The execution process will then be activated from the Payment In window or from the Payment Execution window.

Payment Transaction

Navigate to the Financial Management || Receivables & Payables || Transactions || Financial Account  || Account  window and select a defined Financial Account.

Financial Accounts are used in Openbravo to represent accounts at financial institutions, such as bank accounts, credit cards, electronic payment services, as well as cash and petty cash registers.

Go to the Transactions tab to see the transactions associated with this financial account.

InvoiceToCash20.png

Fields to note:

Grid:

Add Transaction

The user can add a Transaction (Payment, GL item or Bank Fee) to the account by clicking on the Add Transaction button.

InvoiceToCash21.png

In the grid all the completed payments will appear. Select them and press OK button. The user can also add a new payment clicking on the Add Payment button. In a new popup all the pending payments will be shown based on the selected filtering option.

InvoiceToCash22.png

After clicking on the Process button, the application will return to the previous popup and the recently added payment will be shown in the grid. This is the result of adding all the payments as transactions.

InvoiceToCash23.png

The payment status has changed from 'Payment Received' to 'Deposited not Cleared'.

Cash & Bank

Please refer to the Financial Account to Reconciliation chapter of the user manual for more information on how to reconcile Financial Account transactions.

Accounting

There is no specific accounting procedure or configuration that this process requires apart from the regular business partner and product configuration.

Posting of a Sales Invoice

When a Sales Invoice is posted to the general ledger, a posting will be similar to:

PostSalesInvScn.png

The information of the post is retrieved according to the configuration of:

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