Creating Installment Payments Using Payment Terms

While Acumatica is user-friendly, there are some features and processes we get asked about more often than others. Doug Johnson, a Senior Sales Consultant at Acumatica, highlights some of these queries in Feature Spotlight.

Acumatica's Technical Tuesday

Scenario:

A customer negotiates to pay for a sales order in installments. The customer will pay 40% of the invoice up-front and pay the remaining balance in 2 equal payments in 30 and 60 days. Each installment needs to be invoiced separately.

How to do this in Acumatica

Acumatica payment terms provide an easy way to accomplish installment payments. Here are the steps:

Create credit terms to provide for 3 separate payment (see below)
Create a Sales Order and select installment payments (see below)
Ship and fulfill sales order (not shown)
Create the invoice (see below)
Release the invoice – thereby creating an invoice for each installment (see below)

All screens to the steps above are illustrated below.

Credit terms screen

Credit terms screen

Note the payment terms include 40% up front, plus 2 more equal payments of 30% of the total each following month.

SO with installment terms selected

SO with installment terms selected

After creating the sales order, the goods were shipped to the customer. Steps completed:

Create shipment
Confirm shipment

When the invoice is created, it displays the total amount and payment terms.

Prepare the invoice

Prepare the invoice

Release the invoice

When the invoice is released, the system recognizes the fact that the invoice needs to be broken into 3 installments. At this point, the three installment invoices are created so they can be sent to the customer. The net result:

The initial invoice is closed (because it will be paid by installments)
In our case, 3 new installment invoices are created. In the summary screen below you can see that each has the same created date, but the due date various according to the payment terms selected. As expected a balance is kept on each invoice.

3 new installment invoices are created

Note: in the example above the 4 circled invoices describe this purchase. The first invoice (closed upon release) is the original that is replace by the installment invoices. The second invoice is for $66. We already paid this, so it is listed as closed. The last 2 invoices are due in 30 and 60 days.

The second invoice created from the installment plan is illustrated below.

This invoice and the third invoice are paid separately, so a total of 3 payments are expected.

The second invoice created from the installment plan