Credit Verification
This document describes how to put a customer on credit hold and how to modify the credit verification consequences when saving invoices. (5168)
Determining Credit Verification Consequences
You can choose what happens when a customer exceeds their credit limit or you place them on credit hold. For an Invoice, there are three options:
· Display a warning message and prevent new invoices from being saved
· Display a warning message, but allow new invoices to be saved
· Display no message and allow new invoice to be saved (even if on credit hold)
These same settings are available for Sales Orders, too.
To Set Credit Preferences:
1. From the Customer toolbar, select Prefs.
2. Select Sales Order Prefs or Invoice Prefs.
3. Choose Credit Verification settings using the QuickPop.
4. Click the OK button to save Sales Order/ Invoice Prefs.
5. Click the OK button to save Customer Prefs
These settings apply to all users and will immediately affect new and unsaved transactions.
Placing Customers on Credit Hold
Placing Customers on Credit Hold
If you have a credit problem with a customer (because of late payments, for example), you can place the customer on credit hold. Depending on the option you choose in the Customer Preferences window, a hold can prevent you from saving an invoice for the customer or simply display a warning message. See “Determining Credit Verification Consequences,” later in this chapter for more information.
When the customer’s credit problem has been resolved, you can remove the hold the same way you placed it.
To place a customer on credit hold:
1. In the Customer Card, click the Customer History tab.
2. Click the On Hold checkbox. (3070)
If you have a credit problem with a customer (because of late payments, for example), you can place the customer on credit hold. Depending on the option you choose in the Customer Preferences window, a hold can prevent you from saving an invoice for the customer or simply display a warning message.
When the customer’s credit problem has been resolved, you can remove the hold the same way you placed it.
To place a customer on credit hold:
1. In the Customer Card, click the Customer History tab.
2. Click the On Hold checkbox.
3. Click the OK button to save the Customer Card.
Terms Changes
Terms Changes include ongoing improvements to:
- Customer Terms
- Vendor Terms
Big Business 11.15 updates Terms conversion.
This Solution provides a starting point. (6817)
Big Business manages Terms for your Customers and Vendors.
In Setup, or importing Customers, you can import by name, such as "1% 10 Net 30". Big Business will automatically create new Terms. Then, in Terms choose Show List and Edit to define (due 30 days from date of invoice, 1% discount for payment in 10 days).
Credit Verification on Sales Orders
Version 2.5 of Big Business expands the Customer Credit Verification options to include Sales Orders. Earlier versions of Big Business would Warn the User or Prevent Saving of Invoices for those Customers who had been placed on Credit Hold or had exceeded their Credit Limit.
Big Business 2.5 adds the option to Warn the User or Prevent Saving of Sales Orders for Customers who have been placed on Credit Hold or have exceeded their Credit Limit. (3153)
Big Business 2.5 adds the option to perform Credit Verification on all new Sales Orders. You can Warn or Prevent the Save of Sales Orders for Customers who have been placed on Credit Hold or have exceeded their established Credit Limit.
To enable Credit Verification on Sales Orders:
1. Open the Customer Prefs from the Customer toolbar.
2. Open the Sales Order Preferences.
3. Select "Warn User" to warn the user whenever a Sales Order is created or modified for a Customer who has exceeded their Credit Limit or is on Credit Hold.
4. Select "Prevent save of Sales Order" to prevent users from saving Sales Orders for Customers who have exceeded their Credit Limit or who are on Credit Hold.
5. Click the OK button on Sales Order Preferences to save changes.
6. Click the OK button on Customer Preferences to save changes.
Writing Off Bad Debt (Step 1 of 3)
This Solution, along with Solution# 5175 and Solution# 5176 (linked below), describes the process for writing off receivables as bad debt. The general process is to create a negative miscellaneous sale for the amount to be written off, and then offset the positive and negative invoices using the receive money tool.
This is the first of three Solutions detailing the process. (5174)
Step 1. Determine Amount to Write Off
To determine the amount you would like to write off as bad debt for a customer, open the corresponding Customer Card in the Customer toolbar. Review the aging summaries for the Customer and determine the appropriate amount to write off. For this example, we will write off the amount past 90 days due ($678.62).
Writing Off Bad Debt (Step 2 of 2)
This Solution, along with Solution# 5174 and Solution# 5176 (linked below), describes the process for writing off receivables as bad debt. The general process is to create a negative miscellaneous sale for the amount to be written off, and then offset the positive and negative invoices using the receive money tool.
This is the second of three Solutions detailing the process. (5175)
Step 2. Create Miscellaneous Sale(s)
Open the Miscellaneous Sales tool and create a negative Miscellaneous Sale for the amount you wish to write off.
Adjust Postings for Miscellaneous Sale
Upon the recommendation of your accountant, you may want to write off this bad debt to a different account (not the default Sales account). To adjust your posting, click on the feather button in the upper right corner (next to the plus and minus) and select a different account.
Writing Off Bad Debt (Step 3 of 3)
This Solution, along with Solution# 5174 and Solution# 5175 (linked below), describes the process for writing off receivables as bad debt. The general process is to create a negative miscellaneous sale for the amount to be written off, and then offset the positive and negative invoices using the receive money tool.
This is the third of three Solutions detailing the process. (5176)
Step 3. Use the Receive Money Tool to Offset Invoices
Once you have created the negative invoice, you will now need to link this to all of the appropriate open invoices for this Customer. This is done by opening the Receive Money tool in the Customer toolbar and entering in the appropriate Customer. While leaving the Amount field of the Receipt at $0.00, enter the applicable positive and negative amounts in the Applied column in the Apply Payments to Invoices section of the window. This will offset the open invoices which are due. Verify that the Amount and Unapplied Amount fields are both at $0.00 before saving the Receipt.
Note: No postings are created when saving a $0.00 Receipt. The two postings that are created during this process credit Accounts Receivable and debit Bad Debt Expense (or any other selected account).
Entering a Returned Check (Step 1 of 3)
This Solution, along with Solution# 5178 and Solution# 5179 (linked below), describes the process for entering a returned check. The general process is to create offsetting miscellaneous invoices for the amount of the returned check, and then receive and deposit the negative invoice. This is the first of three solutions detailing the process. (5177)
Step 1. Create Miscellaneous Invoices
Open up the Miscellaneous Sales tool in the Customer toolbar and create two invoices for the same Customer. One invoice should be for the positive amount that is due (they still owe you this money) and one invoice for the negative amount of the returned check (you need to back this amount out of Big Business).
If you'd like to impose an additional charge on the Customer, make the positive Misc. Sale for the total. For example, if your policy is to charge $25 for NSF checks, and the customer has bounced a $100 check, make the Misc. Sale for 125.00.
If you already know that your bank is including a service charge in the amount being deducted from your account, make the negative Misc. Sale for this amount. For example, if the returned check is $100 and the bank has notified you that your account was charged $110, make the Misc. Sale for -110.00 to simplify your next Bank Reconciliation.
Entering a Returned Check (Step 2 of 3)
This Solution, along with Solution# 5177 and Solution# 5179 (linked below), describes the process for entering a returned check. The general process is to create offsetting miscellaneous invoices for the amount of the returned check, and then receive and deposit the negative invoice. This is the second of three solutions detailing the process.
(5178)
Step 2. Create a Negative Receipt
Once you have created the negative Invoice, you will now need to remove this amount from the bank account where you previously made the deposit. This is done by opening the Receive Money tool in the Customer toolbar and selecting the appropriate Customer. Enter the amount of the returned check into the Amount field (negative) and apply this amount to the negative invoice. Verify that the Unapplied Amount is at $0.00 before saving the Receipt.
Entering a Returned Check (Step 3 of 3)
This Solution, along with Solution# 5177 and Solution# 5178 (linked below), describes the process for entering a returned check. The general process is to create offsetting miscellaneous invoices for the amount of the returned check, and then receive and deposit the negative invoice. This is the third of three solutions detailing the process. (5179)
Step 3. Create a Negative Deposit
In order to complete this transaction, you must then deposit the negative receipt. To do this, open the Deposit tool in the Banking Toolbar. Select the negative receipt along with the correct Account this money is coming out of (i.e. Checking Account). You have now reversed the payment that was received from a customer.
Note: For Bank Account reconciliation purposes, you should create a separate “Deposit” for each returned check. This will keep these transactions separate when you go to reconcile your account.