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Understand the usage of Financial Transactions within CRM.COM |
Back to Financial Transactions Main Page
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Table of Contents
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What are Financial Transactions?
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 (Invoice, Credit Note, Payment, Refund etc.). 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
Terms | Description |
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Financial Transaction Classification | The Classification determines the nature of the Financial Transaction, including its notation in the double-entry accounting system (debit or credit). Financial transaction type classifications are predefined in the system and cannot be overridden. The following Classifications are available:
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Payment | A Payment is a financial document issued by a customer to a business to settle an outstanding balance. Payments are crediting Accounts Receivable |
Invoice | An Invoice is a financial document that shows a list of services or physical goods and the prices to be paid for them. Invoices are debiting Accounts Receivable |
Credit Note | A Credit Note is a financial document issued by a business to a customer to correct mistakes or adjust the amount that the customer was invoiced. Credit Notes are crediting Accounts Receivable |
Refund | A Refund is a financial document issued by a business to a customer in order to pay back a specific amount of money. Refunds are typically issued to customers who are not satisfied with the Services or Physical Goods that were provided to them and not to adjust or cancel specific Invoices. Refunds are debiting Accounts Receivable |
Invoice Cancellation | An Invoice Cancellation is a financial document which is issued to cancel a specific Invoice. Invoice Cancellations are crediting Accounts Receivable |
Payment Cancellation | A Payment Cancellation is a financial document which is used to cancel a specific Payment. Payment Cancellations are debiting Accounts Receivable |
Financial Transaction Life Cycle State: 'Draft' | A 'Draft' Life Cycle State represents a Financial Transaction which is not yet posted, and can still be edited, posted or rejected in the future. Financial Transactions in a 'Draft' Life Cycle State do not affect the Accounts Receivable Balance. |
Financial Transaction Life Cycle State: 'Posted' | A 'Posted' Life Cycle State represents a Financial Transactions that can no longer be edited. Financial Transactions in a 'Posted' State affect the Accounts Receivable Balance. |
Financial Transaction Life Cycle State: 'Rejected' | A 'Rejected' Life Cycle State represents Financial Transactions that went from being 'Draft' to being ''Rejected'' instead of being 'Posted'. 'Rejected' Financial Transactions cannot be edited and do not affect Accounts Receivable Balance. |
Due Date | The date by which an Invoice must be settled. Due Date is set either manually or automatically and must always meet predefined configurable system rules. |
Issued Date | The date on which a Financial Transaction is issued, either in a 'Draft' or 'Posted' Life Cycle State. |
Posted Date | The date on which a Financial Transaction is 'Posted'. |
Financial Transactions Key Processes and Concepts
Processes / Concept | Description |
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'Cancelling' Vs 'Rejecting' Financial Transactions | Financial Transactions cannot be deleted. If they have been created accidentally, then this can be corrected by using the 'Cancel' or 'Reject' action. Neither action will be taken into consideration by any of the system's financial processes.
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Posting of Financial Transactions | Financial Transactions created in 'Draft' Life Cycle State by using the Save As Draft button can be posted at a later stage by using the ' Post' action.Alternatively, you can set the Life Cycle State of a Financial Transaction directly to 'Posted' by using the SAVE button instead of Save as Draft
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Allocation of Credit Transactions on Invoices | Allocations are used to allocate Credit Financial Transactions against Invoices, in order to settle any outstanding amount. Allocations are applied automatically by the System based on the allocation principle specified on the active Accounts Receivable Definition. View Understanding Accounts Receivable as well as Understanding the Allocation Principles for a description of how the allocation principle works in CRM.COM |
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.
Entity | Network Characteristics | Description |
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Financial Transaction Types |
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Financial Transactions |
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Financial Transactions Related Modules
Entity | Interaction with the Entity |
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Accounts Receivable | Financial Transactions are Posted against Accounts Receivable. The balance of the account is updated when Financial Transactions are posted |
Bills | Financial Transactions are included in the Bill as Bill Lines |
Wallet Transactions | Financial Transactions can be related with Wallet Transactions via the Wallet related to the Accounts Receivable. i.e. if configured accordingly, whenever a Financial Transaction is created against the Accounts Receivable, a respective Wallet Transaction can be created against the Wallet. |
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
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Business Requirement Company ZX would like to create Refunds once a month for its customers with a negative outstanding balance. The Refunds are paid out to thecustomerstrough their bank account. Once the bank makes the Payment to the customer's account, the bank sends a file back to Company ZX with all the successful Payments. Company ZX can theupdatethe customer's accounts balances. CRM.COM Solution
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Cancelling Invoices created by Error
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Business Requirement Company ZX would like to cancel 'Posted' Invoices that were created by error. CRM.COM Solution
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Cancelling Payments created by Error
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Business Requirement Company ZX would like to cancel Payments that are already 'Posted' that have been created by error. CRM.COM Solution
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Move Payments from Suspense Account to Customer Accounts
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Business Requirement Company ZX imports Payments from the bank through an import file. CRM.COM Solution
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Company ZX issuing an Invoice with a Discount
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Business Requirement A customer of Company ZX purchases 2 Cards. He gets a discount for both, 15% for the first one and €20 for the other one. One of the two cards is charged a VAT rate of 0%. CRM.COM Solution
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Company ZX - Invoice Due Dates - Fixed Date
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Business Requirement Company ZX wants the 15th day of the month as the Invoice 'Due Date'. CRM.COM Solution
Business Requirement Company ZX would like to have the 'Due Date' always set 10 days after the 'Posted Date'. CRM.COM Solution
Business Requirement Even though Company ZX would like to allow agents to set the 'Due Date' at a maximum of 10 days after the 'Posted Date', it requires the System to set the 'Due Date' to 5 days after the 'Posted Date'. CRM.COM Solution
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FIFO Versus FIFO & Against Item Principle
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FIFO Principle In the following example, we have one Invoice which has already been allocated to a Credit Note using the FIFO model. After a second Invoice is created the first Invoice is cancelled.
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 the invoices in question. The first Invoice is then cancelled.
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Payment Methods accepted by Company ZX
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Business Requirement Company ZX only allows its customers to pay using Cash and Credit Cards. It wants to introduce a new way of Payment in order to allow customers to also pay via PayPal. This type of Payments would need to be distinguished on the Payment level as more types of online Payment other than Paypal might be added in the future. CRM.COM Solution
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Rejecting Payments Options
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Business Requirement Company ZX allows Payments to be rejected in the following cases:
CRM.COM Solution
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Related Areas
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