Prior to reading this article, we recommend you read the following article:
The Billing Map covers the process for billing customers, recognizing revenue, and receiving a cash payment for services and non-inventoried products.
Use this article to learn more about the following:
- Create Billings
- Amortized Revenue
- Receive and Apply Cash
- Create Deposit and Reconcile with Bank
- Customer Returns
A Billing is a customer invoice and can be created from the Billings tab or from any of the following objects:
- Quote (Salesforce Opportunity)
- Work Order (Salesforce Field Service)
- Recurring Billing
- Time Card
- Expense Report
- Custom Object
Once a Billing is created it is posted. Posting the Billing creates the debit and credit entries in the general ledger. The debit entry for a Billing is always the Accounts Receivable Control GL Account set in Default GL Accounts. The credit for a Billing is created to the GL account used on the Billing line labeled Revenue GL account. This is typically a revenue type but can also be set to a balance sheet type if the Billing has amortized revenue.
If a Billing has amortized revenue, it is very easy to set up an amortization schedule from the Billing record. The accounting entries for amortization will debit the Amortized Revenue GL account and credit a Revenue GL Account. An amortization entry will be made for each accounting period required.
Receive and Apply Cash
Once a Billing is sent to the customer it will show as an Accounts Receivable record until it is collected. When a payment is received it is recorded as a Cash Receipt. When a Cash Receipt is posted it will create a debit to cash and a credit typically to unapplied AR suspense.
The credit GL account for the Cash Receipt defaults to the Unapplied AR GL account set in Default GL Accounts. This GL account can be overridden with a different value at the time of entry. It would be appropriate to set the credit GL account on the Cash Receipt to a revenue type if you are recording a service sale without a Billing record or taking a cash donation as a non-profit.
When a Cash Receipt is received for a specific Billing or group of Billings it should be applied to the appropriate Billings. This is initiated by clicking Apply/Unapply on the Cash Receipt.
When a Cash Receipt has been applied it will update the general ledger by debiting the unapplied AR GL account (or the GL account set as the credit on the Cash Receipt) and crediting Accounts Receivable.
Create Deposit and Reconcile with Bank
A Cash Receipt can be grouped with other Cash Receipts and recorded as a deposit or it can be included as a single data record when performing the Bank Reconciliation.
If a customer has not paid a Billing and you wish to issue a refund, you can create a credit memo. A credit memo is a negative Billing in Accounting Seed. The credit memo is easily applied to the Billing.
If a customer has already paid and you wish to issue a refund then you would create an Account Payable. The debit GL account used on the Payable Line is typically the same Revenue GL Account used on the original Billing record.