THE BASICS

Before taking a closer look at financials, let’s understand some basic financial-related terms which are used throughout the software.

A contact has one or more financial accounts, the primary one being in the business default currency and optionally additional ones in more currencies. An account is debited and credited by account journal entries and has a running and ageing balances. Journal entries are created by financial events, called financial transactions, such as invoice, payment, refund. An account has a credit limit and credit terms. All accounts in the system have calendar periods where on period close balances are summed for the period end, for example Nov 2022 balance is $57.88.

Financial Transactions

Financial transactions are user or system initiated and create debit and credit journals against an account. The classification of a transaction (e.g. Invoice, Credit Note, Payment, Refund etc.) determine the journal entry whether it is a credit or a debit.

Account

Both Person and Company type contacts can have accounts.

A contact can have multiple accounts in different currencies, each account has a running balance, an overdue amount and a credit limit. If the contact has multiple accounts, then one of the accounts will be selected as the primary account, which is the main account used by the contact and can be changed at any given time.

Aside from contacts, businesses and merchants/service providers can also own accounts. Refer to the Business Network manual for further information.

Wallet

Each contact owns a single CRM.COM Wallet. The CRM.COM Wallet has an Open Balance which is the contact’s money to spend as they wish, and a Commerce Balance which may be subject to spending conditions.

The CRM.COM wallet can be funded by any of the contact’s payment methods such as card or direct debit. Refer to the Wallets manual for further information about the wallet.

Payment Methods

Payment methods are the registered payment instruments of the contact, such as card, Paypal, SEPA. The CRM.COM wallet is also a payment method. Payment methods are used to fund the account for various debits created, typically as a result of purchases or subscription invoicing.

Refer the Payment Methods manual for more information.

Accounting Period

An accounting period is the duration of time within which financial transactions can be posted. At the end of each accounting period, (e.g. calendar month), the transactions are totalised and the account closing balance becomes the opening balance for the next accounting period.

The latest accounting period for which the opening balance was calculated for the account is visible when the Financials section is expanded on the contact screen. 

Accounting closing periods are configurable via Settings.

Ageing Analysis

Ageing analysis provides the Business the ability to view which contacts are in debt and for how long. An Invoice starts ageing from the moment it’s issued, and its aged balance (i.e. its outstanding amount) progresses through ageing buckets of 30 day intervals, for as long as it’s unpaid. The aged balance (in 5 30-day interval buckets) is available:

• On Contact’s Statements

• Via the Debtors report

• On the Finance dashboard

Getting Started

This manual covers the different types of financial transactions affecting the contact account, and how to manage the account from the back-end system. Wallet-related transactions and managing the wallet are not within the scope of this manual, so please refer to the Wallets manual for wallet specifics.

The Contact screen displays the contact’s financial state, and this is also where a back-end user can create various financial actions for the contact. To view the contact screen, and thus the contact’s financial information, navigate to CRM > My Contacts > select a contact > Financials.

Once the Financials tab is selected, you will see a summary of the contact’s financial information. The area on the left refers to the account information, whilst wallet information is displayed on the right.

Managing Financials

Account States

The the type of actions which can be carried out against an account are determined by the account state.

• Active - The account is in operational mode, financial transactions can be created against the account. New accounts are automatically set to Active.

• Suspended - This state can only be set manually through a dedicated action, and only if the account state is Active. Financial transactions cannot be created against suspended accounts, with the exception of those which credit the account, and the accounts cannot be used in new account-based actions (e.g. to fund a new subscription service). Suspended accounts can manually be set to Active once they have been settled.

• Terminated - This state can only be set manually through a dedicated action, and permitted only if there are no account-based entities which are still Effective (e.g. a subscription service). No financial transactions can be created against Terminated accounts. Accounts assuming this state cannot be modified, and their state cannot be reverted.

Refer to Account Actions for a list of actions which can be performed against the account and how these affect the account state.

Financial Actions

CRM.COM provides the ability for users to carry out financial actions using the back-end system. Remember that financial actions carried out on behalf of the contact will affect their account and/or wallet balances.

Access Financial Actions but clicking on options (…) under your logged-in user name in the top right-hand-corner of the screen.

Create Account

If the contact will be performing any type of financial transactions then an account must exist. A contact account will normally be created upon contact creation (the currency is set based on the contact's country of agreement), but it’s also possible to create new accounts for the contact in other currencies.

Select one of the contact’s defined addresses as the account Billing Address, this address will be used to communicate account-related financial information to the contact, and more importantly, for applying taxes based on the contact’s location.

The billing address of an account can be amended by navigating to the account in question, hovering, then and clicking on the Billing Address edit option.

Charge the Contact

Manually create an invoice to charge the contact using products defined in the Product Catalogue.

Credit the Contact

Issue a credit note against an existing invoice or for just for specific products.

Journal Entry

Create a manual journal entry to debit or credit a contact’s account/wallet. If the journal entry is being performed against a wallet and no commerce pool conditions are specified, then the wallet’s Open balance is affected, alternatively the Commerce balance with the accompanying conditions is credited or debited.

Record Payment

Create a payment for a contact either against an invoice generated via CRM.COM, or an external invoice (External Financial References) in which case the external reference number should be provided.

Record Payout

A Payout returns money directly to one of the contact’s funding sources (i.e. card). A Payout (unlike a Refund), is not issued based on a financial document such as a Payment.

Refund the Contact

A full or partial refund is issued against a contact payment. The refund transaction returns money back to the contact through four different refund methods (Cash, Card, Wallet, Account Debit). Refunds can be issued to customers who are not satisfied with their purchase, or in cases where an order cannot be fully or partially delivered to the contact.

Top-up Money

Top-up the contact’s Account or Wallet with an amount of money from one of the Contact’s payment methods.

Transfer Money

Transfer a sum of money from a contact’s Account/Wallet to another of the contact’s own Account/Wallet, or a different contact’s Account/Wallet. If the Wallet is being used as the source then only the Open Balance amount is available for transfer.

Statement

View the journal entries performed against the contact’s account and wallet, for a selected period of time. The statement can be exported in PDF or CSV format and emailed to the signed-in system user, or emailed directly to the contact.

Save as Draft

If a financial action is Saved it will be Posted against the Contact’s account and consequently affect the balance, alternatively, any actions Saved as Draft will not be posted, and thus not affect the balance (yet).

To Post a Draft financial action it must first be retrieved from the Activity Feed > select options (…) > Post.

Account Actions

To access the Account actions click on the options button (…) in the Financials tab area.

Account actions will directly affect the contact’s account so caution should be exercised in this case.

Set as Primary

This option is only available for Accounts that are not set as the Primary Account. A Primary Account is the contact’s main Account, this is the Account that will be set as the default Account for payments, and also the Account that will be credited in cases where the Contact is due any money.

Modify Classification

Account classifications are used to group similar types of accounts for pricing, billing or subscription purposes. Account Classifications can be configured via Settings.

Suspend

Accounts can be temporarily Suspended in case of a dispute or while running a credit check. Financial transactions can still be created against a Suspended Account, but no new Subscriptions or Service Requests can be related to the Account. The Account can be reactivated once the issue is settled, or the check is successful.

Activate

Reactivate a Suspended Account (making it Active). This option is only visible if an Account has been Suspended.

Terminate

Terminated Accounts are no longer operational and the state cannot be reversed. An Account can’t be Terminated if it’s been used to fund a Subscription which is still Active, or there are any financial transactions still in Draft state.

There are three options to choose from when terminating an Account and this will determine how the terminating Account’s balance will be handled:

• Instantly - Terminate the Account (any Commerce wallet balance will be lost)

• Transfer to same contact account - Terminate the Account and transfer any balances to another Account of the same contact

• Transfer to other contact account - Terminate the Account and transfer the balances to an Account of another contact. This option can also be used in cases where there are duplicate Accounts for the same contact

Change Credit Limit

Credit limit is the maximum balance that the customer can possibly owe to the business. If the credit limit is not set then the default credit limit defined in Settings > Financials > Credit Terms applies. However, it’s possible to apply a different credit limit for each account, the new credit limit must be less than the default credit limit set in system Settings.

Change Payment Terms

Payment Terms define the account owner’s credit period, i.e. the period of time that an Invoice will be due after its posting date. If Payment Terms are not set, then the default Payment Terms defined in Settings > Financials > Credit Terms apply. It’s possible to set up different Payment Terms as long as one of the allowed ones is selected.

Wallet Actions

Wallet actions directly impact on the contact’s Wallet, refer to the Wallet manual for a list of possible actions.

The Activity Feed

The activity feed keeps a log of all financial transactions against the Account and Wallet in ascending chronological order, along with all communications sent to the contact.

Use the filter to narrow down the results, and then select a financial transaction from the Activity Feed to see its full details.

Payment Methods

Contact payment methods are the funding methods authorised by the contact to pay for their purchases. The Contact can choose from the acceptable payment methods setup by the organisation.

A primary payment method (identified with a P) can be optionally specified by the contact, this is the default payment method which will be used for online (automatic) payments.

Financial Events

The Financial Events screen displays a consolidated list of finance-related events generated by CRM.COM, against all contacts accounts and wallets.

To view such events navigate to Finance> Financial Events from the main menu on the left-hand side of the screen. Use the filter to narrow down your search, and click on an event to see more information.

Finance Settings

Configuration of all Finance related settings (subject to user permissions) is possible by navigating to the Financials Settings screen - click on your logged-in user name in the top right-hand-corner of the screen > Settings > Financials.

These are Account specific settings, for Wallet-related settings please see the Wallet manual.

Account Name Display

Select how the Business would like the Account name to be displayed throughout the software. Choose from Account number alone, or a combination of Account number and Contact name.

Allocation Settings

Select the default allocation principle to be used when allocating credit transactions against debit transactions. The following are supported:

• FIFO - Credit is allocated against the oldest (non-allocated) debit

• FIFO and against item - Credit is allocated against a designated debit and the remaining amount is allocated using FIFO

Accounting Period Closing Settings

Define the duration of the Business' accounting periods. This setting is configured to be monthly by default, and the accounting period closes once a month, but a Business might decide to keep more than one accounting periods open.

Example

Let’s use the screenshot below to explain the accounting period closing setting. In this example, a Business has selected to automatically close the third accounting period prior to the current (running) accounting period. The current accounting period is March 2023, therefore on 5th March 2023 accounting period December 2022 was closed. Next month (5th April 2023), accounting period January 2023 will be closed and so on.

Account Classifications

Account classifications allows you to characterise and manage your contact’s Accounts closely by applying a combination of business rules, such as defining:

• Credit Terms - Bypass the default account credit and payment terms, by creating a rule applicable for a specific account classification (Settings > Finance > Credit Terms),

• Subscription Service Restrictions - Impose restrictions on the maximum number of subscription services a contact can own based on the contact’s account classification (Settings > Subscriptions > Service Restrictions).

Financial Transaction Types

Financial Transaction Types have a classification which defines the operational characteristics of each transaction. User-definable types can be created to distinguish between financial transactions of the same classification (e.g. Invoice, Payment, Refund) which determine its notation in the contacts Accounts - i.e. whether it will be recorded as a credit or a debit.

Multiple types can be created for each classification, such as an Invoice type for ‘Order invoice’ and Payment type for ‘Cash payment’, the most suitable type can be selected when the relevant financial transaction is being created. 

Once financial transaction types are configured, set the system's default types by selecting the Default checkbox.

The financial transaction types can be queried using Insights filters, and can also be set on Order and Subscriptions financial settings.

Numbering Schemes

Setup how Account, Invoice and Credit Note numbers should be automatically generated by the system.

Taxes

Taxes are applicable whenever a service or a physical good is sold to a contact, and are applied when issuing the financial transaction.

A tax rate has three major characteristics; a percentage rate which is valid for a specific period of time, a set of products (defined by SKU or Family) to which the rate applies, and a set of location conditions.

Tax Exempt defines a status whereby a tax rate of 0% is applied when invoicing an account owner who is not eligible to pay taxes. 

A contact can be marked as Tax Exempt from the Contact screen.

Credit Terms

Credit Terms represent an agreement between the Business and the Account owner in terms of:

• A credit limit - The maximum amount of credit allowed for an Account (i.e. the maximum balance that an Account is permitted to have)

• A credit period - The time granted to the Account owner to settle financial obligations

Use the pencil icon to define the allowed credit periods in days.

The default credit terms are applicable to all Accounts, but optional credit terms can also be configured with additional conditions.

Allowed Payment Methods

Payment methods are the forms of payment accepted by the Business, and which will be available for contacts to choose from when paying for purchases or settling outstanding balances.

Refer to the Payment Methods manual for a full description of all payment method types.

Payments on File

This setting provides the ability to configure the business' preferred behaviour for payments on file during the (subscriptions) billing run. By default, the billing run tries to retrieve enough money in order to pay off the generated invoice (i.e. Invoiced Amount). However, this can be overridden by the Account Outstanding Amount setting whereby, the billing run process requests the invoiced amount, plus any overdue amount of the account that is being billed.

Reference Material

You may also find it useful to refer to the following manuals for further reading in relation to Accounts.

Contacts

Contacts

Wallet

https://crmdevelopment.atlassian.net/wiki/spaces/CRM/pages/1726644225

Rewards

Reward Offers Reward Offers

Rewards Events https://crmdevelopment.atlassian.net/wiki/pages/resumedraft.action?draftId=432472155#rewards-events

Accounts

https://crmdevelopment.atlassian.net/wiki/pages/resumedraft.action?draftId=1412235485

Subscriptions

Subscriptions & Billing

Business Network

https://crmdevelopment.atlassian.net/wiki/pages/resumedraft.action?draftId=610697345

Integrations

Platform