Deposit by Credit Card, Remainder by Finance
The invoice for the policy shown below is being financed by Close Brothers (i.e. a sales invoice will be created for £575 to Close Brothers). However in this instance the customer has chosen to pay an initial deposit of £100 using his own credit card...
Before You Start - Setup Your Accounts
Before showing you how to resolve this problem, you’ll save a lot of time and trouble if you do the following set-up, starting from your Durell Main Menu.... Click the “Accounts” button Click the red “Setup” button Click the “Nominal accounts” tab Ensure the drop-down at the right says “Sales” Click the “Starburst” or new button Create a new nominal account called “Client Deposits” with the code “DEPO”, as shown below Click the red “Floppy Disk” or save button to save your new nominal account
Now click the “Invoice / text desc” tab Ensure the dropdown is set to “Sales invoice descriptions” Click the “Starburst” or new button Create a invoice description called “Client Deposit”, as shown below Click the red “Floppy Disk” or save button Reset the dropdown to “Sales text descriptions” Click the “Starburst” or new button Create a text description called “CLIENT DEPOSIT” in upper case Click the red “Floppy Disk” or save button Repeatedly click the “Exit Door” icon to exit and return to your Main Menu – you are now ready to proceed
Resolving The Problem
The problem is that you’ve got a £575 invoice to Close Brothers, of which £100 is being paid by someone completely different: the client. To account for this properly you should first complete and post the policy normally, as if it was just financed by Close Brothers. Afterwards, with the policy highlighted in the client’s scrolling list of policies, do the following... Click the “Signpost” button and select “Jump to / Sales ledger” In the sales ledger click the “Starburst” or new button Create an invoice to the client for the deposit amount (e.g. £100), as shown below If you’ve done the setups, above, you’ll be able to select the...
o words like “Client Deposit” from dropdowns on this screen
o nominal account “DEPO” for Client Deposits Save the invoice with the red “Floppy Disk” icon and exit with the “Exit Door” button
Back in the scrolling Sales Ledger create another invoice, this time to Close Brothers VERY IMPORTANT - you must set its “Type” to “Credit”, as shown below, so the value shown is a minus sum Save this credit with the red “Floppy Disk” icon and exit with the “Exit Door” button
Back in the scrolling Sales Ledger, highlight the client’s invoice, as shown below, then click the “Pile of Money” icon to auto-reconcile it
o Set the Date to today
o Set the Payment method to Credit Card
o Set the Bank to your Client Bank A/C
o Set the Cashing-up Method to Cash-up now as individual item in bank
o Click “OK”
Having done the above... You will have £100 of your client’s money in the bank, properly accounted for Your Close Brothers account will have been clearly and understandably reduced by the £100 Your Close Brothers statement and subsequent reconciliation in the Cashbook will be clear and obvious Your nominal accounts – particularly your Transferable Commission – will remain 100% correct The nominal account for Deposits will eventually end-up at zero
Refund Deposit by Credit Card, Remainder by Finance
This is the reverse of the preceding section, though the answer also depends on when the client requests the refund. If the client decides to cancel a policy like the one above, either immediately or after some weeks, you'll need to create a Mid Term Adjustment (a.k.a. MTA) for this early termination. Depending on how soon the client terminates the amount to refund will vary. So if the MTA refund value is... equal or less than the original Close Brothers invoice you’ll only need to create a credit (negative) to them more than the original Close Brothers invoice then it’ll have to be handled like the original policy, with additionally...
o a separate credit (negative) for part of the deposit to the client
o a separate invoice (positive) for part of the deposit to Close Brothers