Recently I was engaged by an advisor to provide advice to a client using Xero and Vend on how to manage “on account” sales and their subscquent payments. We are committed to passing on all that we learn, so here it is.
After an On Account sale has been processed in Vend, it automatically gets pushed to Xero and is created in Xero as a Sales Invoice.
There are two ways you can record a future payment that has been received from the customer.
- In Xero and then in Vend, or
- In Vend (Vend will update Xero, but this has it’s disadvantages)
There is no “more accurate” way to manage this process. Both options have their advantages and disadvantages. However, I prefer processing payments in Xero – let me explain why.
When you match up your payments to invoices in Xero correctly and reconcile your banking daily then Xero will always know who owes you money. The issue is that this information isn’t directly reflected in Vend and if the customer walks in or calls up to make payment, the retail operator doesn’t necessarily know the correct amount by looking at Vend.
The process when managing payments in Xero and then in Vend is as follows:
If you receive a bank deposit or other online payment from a customer, apply the payment in Xero. Find the payment in your bank feed, and use the reconciliation feature to match it to the On Account invoice/s.
Next, you need to update the On Account sale(s) in Vend. Find each On Account sale in Vend, and click the ‘Check for Xero Payments’ button. This will update the sale with any payments you recorded in Xero.
Tips to Managing On Account Sale Payments in Xero first
- Each week, in Xero, run a list of all the invoices paid and then go into Vend to update those sales.
- To do this, go to Accounts > Sales > All > Search Within “Paid date” and set the dates you want.
- Go into Vend, got History > Filter to Show “On Account” and then enter the Customer name and Update. Don’t enter dates in the Filter as this is sale date and many payments could be for older sales.
- Select each Sale in the History screen for that customer corresponds to the Sales invoice marked as Paid in Xero and select the Xero button (on the sales history in Vend) > Check for Xero Payments.
Note: if you delete a payment from an invoice in Xero, Vend will not update automatically. You need to go back into Vend and Check Xero for payments to update the outstanding balance in Vend.
Why I prefer managing payments in Xero first?
I know that your customers may wish to come into your store to pay their account balance off. If this happens, you will only be able to pay off one account sale at a time. If they want to pay off multiple sales, you’ll need to open each sale individually to record the payment. Given that On Account sales are often multiple during the month to put on the statement, this process is really just as convoluted as the above process.
Note: You should never add any more products to an On Account sale in Vend if it had already been posted to Xero. Adding extra products in Vend does not update the accounts receivable invoice in Xero. If the customer wants to buy more, ensure you start another sale.
As outlined in the Vend Help Centre, to take a payment from a customer in store:
- Find the account sale in Vend. If it was made in the same outlet you’re working in, you can use the ‘Retrieve Sales’ screen. Otherwise, find the purchase in your sales history, or by searching for the customer, and opening previous sales.
- Open the sale
- Click ‘Pay’ and record the payment amount. If the are only paying a partial payment, you can choose ‘On Account’ again to put the sale back onto Account.
- Vend will automatically update Xero with the payment.
The disadvantage of managing payments in Vend first and then letting it populate Xero, is because the money received is then combined into total monies received during the day. The payment will be included in a larger bank deposit, such as the end of day takings deposit into the bank (for one or multiple days). This means you’ll need to match this payment to the invoice for the account sale, as well as they other applicable transactions (such as the daily register closure). I suggest only using this method once you 100% on top of your daily reconciliations in Vend and Xero.
Setting a Due Date on On Account sales
In case you didn’t know already, you can specify your on account due dates in Vend. To get this set up you’ll need to add a default due date in Xero (if you don’t already have one) and map this in Vend in the Xero settings page.
Follow the steps below to get going:
1. Add a Due Date in Xero
If you already have a default due date for sales invoices set in your Xero account you can skip ahead to step 2.
To add a sales invoice due date in Xero:
- Login to your Xero account
- Navigate to Settings -> Invoice Settings and choose Default Settings
Here you will find the Sales Invoices Default Due Date field, fill this out with your chosen due date and click Save.
Now that you’ve set this default due date you can make your way back to Vend.
2. Map Your Payment Due Date in Vend
Once you have a payment due date set in Xero, you will need to map it in your Xero mappings page in Vend. To do this:
- Head to your Xero settings page in Vend
- Scroll to the bottom and select Reload Accounts , this is a required step for the invoice due date field to appear.
- Next up, navigate to Inventory Orders and Account Sales section.
4. Underneath Invoice due date , specify your due date. You can pick from either Noneor your chosen default due date in Xero.
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