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What are Financial Transactions?

Financial Transactions are statutory transactions, governed by the accounting standards of the country, carried out between two parties, the business and the customer, to exchange services or physical goods. The A Financial Transaction is an agreement between a buyer and a seller to exchange Services or Physical Goods for payment. The transaction’s nature is differentiated by its type Type (invoiceInvoice, credit noteCredit Note, paymentPayment, refund Refund etc.). Financial Transactions impact the balance of the customer's accounts receivable and the information kept on each of them depends on their type It involves a change in the status of the finances of the businesses or individuals involved, which is directly reflected on the customer's Accounts Receivable  by updating its balance.

Financial Transactions Glossary

Business Requirement

Company ZX would like to have the Due Date always fixed to the 15th of the next month.

CRM.COM Solution

• Configuration 

  The Accounts Receivable Credit Rule should be set up defining the x^th day to be equal to 15 after x months to be equal to 1.

• User Process
  When Posting the Invoice:

  • If the user defined the date then according to the date provided the system will validate accordingly. For example if the Date of Posting is 20th of May
    • Due Date Set: 21/05
      • System Message: Invalid Due Date
    • Due Date set: 16/06
      • System Message: Invalid Due Date
    • Due Date set: 15/06
      • Due Date Saved
  • If the user leaves the Due Date empty then the system will set the Due date automatically to 15/06

Business Requirement

Company ZX would like to have the Due date to always be set 10 days after the Posted date

CRM.COM Solution

• Configuration
   The Accounts Receivable definition Credit Rule should be set up defining X Days after transaction's Posted Date: X= 10

• User Process 

  When Posting the Invoice:

  • If the user defined the date then according to the date provided the system will validate accordingly. For example if the Date of Posting is 20th of May
    • Due Date Set: 28/05
      • System Message: Invalid Due Date
    • Due Date set: 31/05
      • System Message: Invalid Due Date
    • Due Date set: 30/06
      • Due Date Saved
  • If the user leaves the Due Date empty then the system will set the Due date automatically to 30/06

Business Requirement

Company ZX would like to allow agents to set the due date max to 10 days after the Posted date but the system should automatically set the due date to 5 days after posted date

CRM.COM Solution

• Configuration
  

  The Accounts Receivable definition Credit Rule should be set up defining X Days after transaction's Posted Date: X= 10

  Proximity range should be set to -5

• User Process
  

  When Posting the Invoice:

  • If the user defined the date then according to the date provided the system will validate accordingly. For example if the Date of Posting is 20th of May
    • Due Date Set: 28/05
      • Due date saved
    • Due Date set: 31/05
      • System Message: Invalid Due Date
    • Due Date set: 30/06
      • Due Date Saved
  • If the user leaves the Due Date empty then the system will set the Due date automatically to 25/05 (The smallest allowed dua date based on the Proximity Range set)

FIFO Versus FIFO & Against Item Principle

FIFO Principle

In the following example, we have one invoice which has already been allocated to a credit note using the FIFO model. A second invoice is created and then the first invoice is cancelled.

1. Invoice 1: $20
2. Invoice 2: $10
3. Credit Note 1: $20

FIFO & Against Item Principle

In the following example, we have 3 invoices of which the 2 first are allocated from Credit Notes that were intended for them. Then the first invoice is cancelled.

1. Invoice 1: $10
2. Invoice 2: $20
3. Invoice 2: $30
4. Credit Note 1 : $20 (Intended Invoice: Invoice 2)
5. Credit Note 1 : $10 (Intended Invoice: Invoice 1)

Financial Transactions Key Processes and Concepts

Financial Transactions Network Characteristics

Network Characteristics define the level of access for each record. i.e. Whether it will be available for selection, for viewing or editing etc.

Financial Transactions Related Modules

Financial Transactions  - Business Examples

The following section provides business examples to help you understand how CRM.COM Financial Transactions  module is used.

Posting Refunds after Bank payment confirmation

Business Requirement

Company ZX would like to create Refunds once a month for any customers with negative outstanding balance. The Refunds are paid out to the customers via their bank account. Once the bank makes the payment out to the customer's account, sends a file back to Company ZX with all the successful payments. Only then will Company ZX would like to update the customer's accounts balance.

CRM.COM Solution

• User Process
  All the Refunds should be created in life cycle state Draft and sent out to the bank. Once the file with the successful payments, is received from the bank then each of those refunds should be accessed and updated to Posted. In this way the balance of the account will be automatically updated taking into consideration the Refund amount

Cancelling erroneously created Invoices

Business Requirement

Company ZX would like to cancel any invoices that are already posted and have been erroneously created.

CRM.COM Solution

• Configuration
  An operations user should be responsible for cancelling such invoices. Admin users can configure different types of Invoice Cancellation classified transactions, in order to differentiate between different reasons for cancelling an invoice. For example, Cancellation Error Invoices & Cancellation Complain Invoices.

• User Process
  

  The user should select the invoice to be cancelled and create a Financial Transaction of the respective type.

  In this way the invoice will be available for future reference but it will not affect the account's balance, while any user can have a clear picture of why it was cancelled based on the FT Invoice Cancellation type and if more information is needed, then the Cancellation's transaction Issue Reason may be accessed by the detail page to get extra information.

Cancelling erroneously created Payment

Business Requirement

Company ZX would like to cancel any payments that are already posted and have been erroneously created.

CRM.COM Solution

• Configuration
   An operations user should be responsible for cancelling such payments. Admin users can configure different types of Payment Cancellation classified transactions, in order to differentiate between different reasons for cancelling a payment. For example, Erroneous Cancellation Payments& Erroneously Allocated Cancellation Payments

• User Process
  

  The user should select the invoice to be cancelled and create a Financial Transaction of the respective type.

  In this way the payment will be available for future reference but it will not affect the account's balance, while any user can have a clear picture of why it was cancelled based on the FT Payment Cancellation classification and if more information is needed, then the Cancellation's transaction Issue Reason may be accessed by the detail page to get extra information.

Move Payments from Suspense Account to customer accounts

Business Requirement

Company ZX imports payments from the bank through an import. If the destination account is not found then the payment will be created in Company ZX system Suspense account. Back office personnel are responsible to manually check and move the payments to the correct customer account.

CRM.COM Solution

• User Process
  

  BackOffice operators should follow the process described below:

  Company's ZX backoffice personnel should daily access Company's ZX suspense account. For each of the payments which the correct account has been found the action "Move to Account" should be executed.

   

Company ZX issuing an invoice with Discount

Business Requirement

A customer of Company ZX has bought 2 Cards. For both of the cards he received a discount, 15% for the first one and 20€ discount from the other one. One of the cards would be charged with 0 VAT

CRM.COM Solution

• User Process
  

  Create a new Financial Transaction of type Invoice. In the Items tab add 2 lines with the following information

  1. Card 1
     • Cost: 100
     • Quantity: 1
     • Discount
       • Discount Percentage: 15%
     • VAT Rate
       • VAT rate:15%
  2. Card 2
     1. Cost: 100
     2. Quantity: 1
     3. Discount
        • Discount Amount: 20€
     4. VAT Rate
        • VAT rate:0%

  System Calculations:

  1. Card 1
     1. VAT Amount: (100-15)*15/100 = 12.75
     2. Subtotal: (100-15+12.75) = 97.75
  2. Card 2
     1. VAT Amount: 0
     2. Subtotal: 80

Company ZX - Invoice Due Dates - Fixed Date

Financial Transactions Key Processes and Concepts

Financial Transactions Access & Viewing Controls

Business Network Characteristics define the level of access for each record. i.e., whether the record will be available for selection, viewing or editing.

Financial Transactions Related Modules

Financial Transactions  - Business Examples

The following section provides business examples of how the Financial Transactions module is used in CRM.COM.

Posting Refunds after Bank Payment confirmation

Cancelling Invoices created by Error

Cancelling Payments created by Error

Move Payments from Suspense Account to Customer Accounts

Company ZX issuing an Invoice with a Discount

Company ZX - Invoice Due Dates - Fixed Date

Restrict rights to cancel Payments to certain users