Down Payment

You use this function to request a partial payment up front from your customer (for example, when signing the contract and after creating the VSS order) . When the remaining payment is due, the partial payment is deducted from the total.

Down payments must not be balanced with other receivables or payables and must be displayed separately in the balance sheet. Received down payments display on the liabilities side of the balance sheet.

Down payments always reference a VSS order. You can use the down payment feature in the standard transaction for VSS orders.

Features

If a down payment is required from a customer as part of a business transaction (vehicle order, service order or parts order), you can create a down payment request directly in the VSS order (see Down Payment List). A down payment can also be relevant prior to the order. You can include the down payment request in a quotation. A down payment request creates a noted item in the customer account. A noted item reminds the dealer that a down payment is expected. It does not update any debits or credits.

After a negotiation with the customer, you can agree on a different amount for the down payment. You can then update the down payment request. The system updates the noted item in the customer account.

If the customer does not pay the down payment, you can decide to fulfill the order anyway. You must cancel the down payment so that it does not appear in the customer accounts. The system cancels the noted item in the customer account. If you cancel the order, you must also cancel the noted item.

The down payment is posted when the customer pays the down payment request in the cash desk (incoming payment). The receivables are balanced, and the system creates a special G/L transaction.

If the customer only fulfills a partial payment of the amount in the down payment request, the system clears the noted item and creates a new noted item for the remaining amount. The customer receives a receipt as proof of the down payment made.

When the relevant business transaction is complete (for example a vehicle order), you create a final invoice for the customer. You cannot consider the down payment as revenue until the business transaction is complete.

If you have received an incoming payment for the down payment (a cleared down payment exists), the system deducts the paid amount from the final invoice. The system deletes the relevant noted items and the special G/L transactions. When you create the final invoice, the system transfers the special G/L transactions to the revenue account.

If you have not received the down payment, then the full amount of the invoice is due. If a down payment request has been created and there is a connection to the VSS order, the system deletes the noted item.

Depending on the agreement between your dealership and the customer, if the customer cancels the business transaction, you can keep the down payment as a cancellation fee. In this case, you must transfer the special G/L transaction to a revenue account.

If you have posted the down payment, but cancel the order because you cannot fulfill it, you credit the customer with the down payment amount.