About Multiple Due Dates for Invoices and Debit Memos
Creating multiple due date payment terms allows you to set up an invoice payment schedule for customers.
Multiple due dates can be set up for the following:
- Invoices generated from customer orders and manually entered on the Invoices, Debit and Credit Memos form.
- Debit memos generated from the Price Adjustment Invoice form and manually entered on the Invoices, Debit and Credit Memos form.
The successful use of multiple due dates depends on creating billing terms with multiple due dates and percentages, and selecting the appropriate billing terms for customers and customer orders.
Billing Terms Setup
To use multiple due dates, create a new terms code on the Billing Terms form. On this form, you indicate that you want to use multiple due dates by selecting the Use Multiple Due Dates check box. You can create more than one terms code that uses multiple due dates.
System-generated debit memos from the Price Adjustment Invoice form should have multiple due dates if the terms code being used is a multiple due date terms code.
You can use prox days and Advanced Terms in a multiple due date terms code. However, you cannot create billing terms with Discount Days.
A multiple due dates terms code includes the following:
- Sequence: Sequence is used internally to track the sequence of the multiple due date record and is assigned by the system. The first sequence starts with 10 and the next/subsequent sequences at increments of 10. The due date calculation takes place normally, using the due days from billing terms. You must enter more than one sequence.
- Due Days Offset: Number of days from the previous due date sequence of the billing terms. The offset day in the first sequence is always equal to zero.
- Percent: The total of all sequence records for the multiple within a billing terms code must equal 100 percent.
Customers and Customer Orders
Once a new terms code is created, it is immediately available. The default billing terms code is set up on the Customers form, but it can be changed on the Customer Orders, Price Adjustment Invoice, or Invoices, Debit and Credit Memos forms.
You should not assign a multiple due date terms code to a customer and customer order where the following options are used:
- Letter of Credit Required
- Consolidated Invoicing
- Payment Type is Draft
If these options are selected, the system displays an error message.
Invoicing
Once the customer order has been shipped, the system generates the invoice and calculates the invoice payment schedule according to the settings in the terms code. Multiple due date records are assigned to the invoice for as long as the invoice exists. If an invoice is deleted, the system deletes all due date records for that invoice. If the terms code is modified, the system recalculates the due dates and creates new due date records for the invoice.
On the Invoices, Debit, and Credit Memos form, you can adjust the amounts and due dates after the invoice is created, but the total due amount must still equal the total invoice due amount. On the A/R Posted Transaction Detail form, you can only update the due date.
To create invoices or debit memos with multiple due dates on the Invoices, Debit, and Credit Memos form, use the Generate Distributions function to create the sequence of due dates and amounts.
The following examples show how multiple due dates are set up and invoiced. The second example uses prox days and prox codes.
EXAMPLE 1: There are four sequences defined. The invoice date is May 5. For Billing Terms, the due days offset is 30 days. The following table shows how the system calculates the due date.
| Sequence | Due Days Offset | Percent | Final Due Date |
|---|---|---|---|
| 10 | 0 | 25 | June 5 (May 5 plus 30 days) |
| 20 | 30 | 25 | July 5 (May 5 plus 60 days) |
| 30 | 30 | 25 | August 3 (May 5 plus 90 days) |
| 40 | 30 | 25 | September 1 (May 5 plus 120 days) |
EXAMPLE 2 (Advanced Terms): There are three sequences defined. The invoice date is May 5. For Billing Terms, the due days is 30, prox code is 2 (system sets the due date to the end of the month), and prox days are 15 (day of the month). The following table shows an example of how you can divide the billing and how the system calculates the amount to pay and the due date.
| Sequence | Due Days Offset | Percent | Invoice Due Date | Prox Code Applied | Final Due Date with Prox Days Applied |
|---|---|---|---|---|---|
| 10 | 0 | 30 | June 4 | June 30 | July 15 |
| 20 | 30 | 30 | July 3 | July 30 | August 15 |
| 30 | 30 | 40 | August 3 | August 31 | September 15 |
Viewing Due Date Records for an Invoice
You can view the list of due dates for an invoice by clicking on the following forms:
- Invoices, Debit and Credit Memos
- A/R Posted Transaction Detail
- A/R Quick Payment Application
Applying Payments to Invoices
When you make payments using the A/R Payments form, if there is more than one due date amount applied to the same invoice, the system creates one record per payment per invoice.
When you make payments using the A/R Quick Payment Application form, the system applies payments to each due date in chronological order regardless of when they were received. The earliest due date is always paid first.
EXAMPLE 3: For example, an invoice I101 has 3 due date records:
- Due date = May 10 Due amount = $200
- Due date = June 10 Due amount = $100
- Due date = July 10 Due amount = $100
A payment of $250 is applied to this invoice and one record of type Payment is create for $250 for invoice I101. When the system needs to display the aging of the invoice that is not fully paid, it:
- Looks up all the records for invoice I101
- Takes the payment and credit memo
- Totals the amount
- Applies that amount to the earliest due date
In this example, take the payment record of $250 and apply that to the first due date record and then the second due date record. The A/R Aging Report shows the following due records for invoice I101:
- Due date = June 10 Due amount = 50
- Due date = July 10 Due amount = 100.
Applying Debit Memos to Invoices
You can also create debit memos with multiple due dates, either manually or automatically. If the debit memo is automatically generated, you can update it using the Invoices, Debit, and Credit Memos form before posting. After it is posted, you can view it in the A/R Posted Transaction Detail form, just like an invoice. When the debit memo is applied to an invoice, it is processed with the invoice for A/R payment processing and aging for reports and customer statements.
There are three ways debit memos can be applied to invoices when either or both have multiple due dates:
- For a debit memo with a single due date applied to an invoice with multiple due dates, the debit memo is applied to the first due date.
- For a debit memo with multiple due dates applied to an invoice with multiple due dates, the total debit memo is applied to the first due date record of the invoice.
- For a debit memo with multiple due dates applied to an invoice with a single due date, the total of the debit memo due amount is applied to the first due date record of the invoice.