As of the 2021.1 release, NetSuite has made several great additions to deposits and prepayments. Let’s take a look at these features, old and new, in detail.
This has been around for a while but it is still a great tool! The customer deposit feature allows users to track cash in and post a deposit to a Customer Deposit account of the type Other Current Liability. Customer deposits can be made using a credit card or any other accepted payment-type.
When a customer deposit is created from a sales order, those funds are tied to that sales order, and will be automatically applied to the invoice when the sales order is billed. If the customer deposit is less than the invoice, then the invoice is open with only the balance as the amount remaining. Once the sales order is fully billed, any remaining balance can be applied to other open invoices or be refunded to the customer.
A customer deposit can also be created from the customer record without associating it directly with a sales order. This is equivalent to a “deposit on account”. Customer deposits created this way can be applied to any open invoice or refunded as needed.
This feature is fairly new in NetSuite, but is quickly becoming a user favorite. Unlike the standard customer deposit, the required deposit allows tracking of the expected deposit amount, as well as how much of it has been paid. The recording of the required deposit uses the same customer deposit feature as above, so accounting and transaction treatments remain the same.
Users can define the amount or percentage of the deposit at the transaction level. When either value is entered, the lines are updated accordingly. Alternately, the deposit amount can be specified at the line level. The transaction fields will sum and display the amount and calculate the percentage.
With Required Deposit, sales teams or collection representatives can be alerted when a customer owes a balance on a required deposit. It even puts an alert right on the header of the sales order, and shows the amount of the required deposit that is still outstanding in the Summary box.
These amounts are also reportable, which users to create a saved search that your collections team can use to follow up on unpaid deposits. Additionally, the sales order can be left as pending approval until the deposit is fully paid.
As with standard customer deposits, the required deposit will auto apply to the invoice that is created from the sales order.
Enabling the required deposit functionality is a simple check box on the enable features page under Setup > Company > Transactions. To see the fields for required deposit the Standard Sales Order – Invoice user form will need to be used.
Another new feature in NetSuite is vendor prepayment. Instead of adding a line to the PO to indicate a prepayment, the same can now be recorded against a purchase order as a separate transaction. With vendor prepayment, outgoing cash can be tracked and posted to an Other Current Asset account.
When a vendor prepayment is created against a purchase order and the bill created, the vendor prepayment will be auto-applied to that bill by default. If there are more than one vendor prepayments, then the oldest prepayment will be applied first. After the purchase order is completed, any unapplied balance on the vendor prepayment can be applied towards other bills for the vendor. The bill will remain open with an open balance if the vendor prepayment does not cover the full amount of the bill.
Additionally, standalone vendor prepayments can be created for a vendor. This allows users to track prepayments on accounts or security deposits that were made to vendors. Standalone vendor prepayments can be applied to any open bill for that vendor.
Enabling the vendor prepayment functionality requires administrator permissions. To set up vendor prepayments, follow the steps below:
- Navigate to the Setup > Company > Enable features.
- Click on the Accounting subtab and then on the Vendor Payments checkbox under Advanced Features.
- Hit Save.
- Define the default vendor prepayment account. This is found under Setup > Accounting > Accounting Preferences.
- From there scroll down to Accounts Payable. A default account must be selected here. It can also be assigned on the Subsidiary records for OneWorld users. The subsidiary setting will override the global setting. Users can choose to not have the vendor prepayments auto apply to bills when creating them from purchase orders.