Invoicing
The invoicing process typically initiates the settlement process in the order life cycle. Invoicing can be done either through time-triggered transactions or APIs.
Shipment Invoicing occurs after the order has shipped. It initiates the collections process.
Order Invoicing enables the settlement process to start at any stage of the lifecycle of an order, not just after shipment. This can be used in situations where there is no shipment or instances when the invoice needs to span multiple shipments.
The Provided Service and Delivery Service is invoiced based on the ordered product line quantity.
Return invoicing enables refunds to be issued to the customer during the return process. The refund can be configured to occur either before or after the receipt of the returned goods. If the return was created by a gift recipient, Sterling Order Management System Software does not issue the refund to the buyer on the sales order, but to the gift recipient instead.
Any modification to order taxes and charges during invoicing time will update the order only when the order is completely invoiced. In addition, any modifications to line taxes and charges on the line during invoicing time will update these order lines only when the order line is completely invoiced.
Invoices can be published immediately after creation (generally for external collections) or after settlement within Sterling Order Management System Software.
Pro forma invoicing
In many business scenarios, if there are multiple shipments for each order, charges and taxes are split up between the shipments. Depending on implemented business processes, these amounts may be split amongst various shipments in several ways. To appropriately charge and tax subsequent shipments of an order, previous charges and taxes must exist in the database to be persisted against.
A Pro Forma invoice, an invoice generated upon shipment creation, acts as draft invoice that persists charges and taxes in the database so that when charges and taxes are calculated for additional shipments, previous charges and taxes are taken into consideration.
For example, an order with two lines is created for $70. The enterprise uses incremental charges for shipping as follows:
- A $4.99 shipping charge is added to orders between $0 and $49.99
- A $6.99 shipping charge is added to orders between $50 and $99.99
Line1 on the order is $40, while Line2 on the order is $30. Without pro forma invoicing the following charges would occur upon invoicing:
| Line | Amount | Charge |
|---|---|---|
| Line1 | $40 | $4.99 |
| Line2 | $30 | $6.99 |
With pro forma invoicing, when calculating the shipping charge for Line2, the existing charge on Line1 is taken into consideration:
| Line | Amount | Charge |
|---|---|---|
| Line1 | $40 | $4.99 |
| Line2 | $30 | $6.99 - $4.99 = $2.00 |
Cancelling part of an order with pre-collected payments
If an order has not yet been shipped, but the payment for that order has already been pre-collected, cancelling all or part of the order could require a certain amount to be refunded. If that is the case, Sterling Order Management System Software sends a notification that can be configured to be picked up by external payment systems with the amount refunded, if applicable.
For example, if an order for $140 has $100 worth of pre-collected payments and $50 are cancelled, an amount of $10 needs to be refunded to the pre-collected payment type. In that case, a notification is raised by Sterling Order Management System Software for the $10 refunded.
Additionally, the Deferred
Credit On Return Required rule can be enabled in the Applications
Manager at the payment rule level. If that rule is enabled, and if
a cancelled amount does not need to be refunded, Sterling Order Management System Software sends
a notification that can be configured to be picked up by external
systems with that amount.
If, in the above example,
the Deferred Credit On Return Required rule is enabled,
another notification is raised by Sterling Order Management System Software for
the $40 that was cancelled but not refunded.
Price changes post invoicing
Sterling Order Management System Software allows
for any charge or unit price change on an order to trigger the creation
of adjustment invoices when the order has already been invoiced. This
can be done by enabling the Apply Changes To Invoiced Quantity rule
at the document type level for a given enterprise. The adjustment
invoices are picked up by payment agents, and processed accordingly.
For example, some stores offer their customers a lowest-price
guarantee. If a customer buys a pair of shoes for $50 and finds those
same shoes at another store for $45, then should request for a $5
refund. If the Apply Changes To Invoiced Quantity rule
is enabled and the unit price of the shoes is changed to $45 on the
sales order post invoice creation, an adjustment invoice is created
for $5 and a refund is issued to the customer for that amount.
Tax changes post invoicing
Sterling Order Management System Software allows
for any change to the tax percentage on an order to trigger the creation
of adjustment invoices when the order has already been invoiced. This
can be done by turning on the Apply Changes To Invoiced Quantity rule
at the document type level for a given enterprise. The adjustment
invoices are picked up by payment agents, and processed accordingly.
For example, if a customer with tax exempt status makes a purchase but neglects to inform the store of his status until after the order has been shipped and invoiced, an adjustment invoice is created and a refund is issued to the customer.
When tax is applied on an order or an order line by passing tax percentage, the tax amount on the order, the order line, and the tax record are updated after invoicing. To reflect the correct tax amount on the order, the order line, and the tax record in the output of order APIs before invoicing, the correct tax amount for the corresponding tax percentage must be passed in the input or the recalculate tax user exits must be implemented.