When multiple payments are needed for a transaction, NetSuite Installments can be used to plan out the payment amounts and expected payment dates.
Initially released for version 2019.1, NetSuite Installments are a version of an accounting term that may be used to track due dates for an invoice or bill. For example, a vendor bill with a total amount of $120 due on December 30th, can be broken into 3 installments of $40 each. Example: 1st installment of $40 due October 30th, 2nd installment of $40 due November 30th, and 3rd installment of $40 due December 30th.
When setting up the term, there is the option to pay tax upfront which includes tax in the first installment. There is also an option to split the installment evenly which will divide the total amount of the transaction evenly between the number of payments.
If split evenly is unchecked, then percentages can be manually preset for each installment number and the percentages must add up to 100%. On the vendor bill on customer invoice, an Override Installments checkbox may be checked to manually change the payment date(s) and/or change the payment amount for installment numbers; the total of the installment payment amounts must equal the total amount of the transaction.
Not Split Evenly
Override Installments Checkbox
When would NetSuite Installments be used?
Installments are used when an individual transaction needs to be split into different payment amounts. For example, if a customer invoice for $10,000 is due in 90 days but the customer will pay it over the 3 months, then an installment term can be used. Installment terms SHOULD NOT be used as a substitute to mimic capturing payments against something that should be multiple transactions.
NetSuite Installments Considerations
With Installments, there is no discount percentage available for the term. For example, a term such as 2% Net 30 – where a 2% discount is given when paid within 30 days – would not be possible when using installments.
When either accepting a customer payment or making a payment against a transaction that uses installment terms, the installment reference number will appear next to the transaction reference number and the payment record can be recorded against that installment and its due date. For transactions that use installments, aging will be based on the due date of the installments rather than the transaction date.
To learn more about how your business can benefit from using NetSuite Installments functionality, PLEASE FEEL FREE TO CONTACT US!
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