Difference between revisions of "COD Statement"

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(New page: ==Accounting for COD== When a package is shipped Cash On Delivery (COD), the carrier will ask the recipient for payment of the value of the package. The carrier will then forward checks ...)
 
 
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==Accounting for COD==
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==Introduction to Accounting for COD==
  
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When a package is shipped Cash On Delivery (COD), the carrier will ask the recipient for payment of the value of the package.  The carrier will then forward checks from multiple recipients together to the sender with a statement detailing the amount received from each shipment and the fee the carrier charges for the service.  The recipient may also refuse to pay for the package.  In that case, the carrier returns it to the sender undelivered.
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When a package is shipped Cash On Delivery (COD), the carrier will ask the recipient for payment of the value of the package.  The carrier will then forward checks from multiple recipients together to the sender with a statement detailing the amount received from each shipment and the fee the carrier charges for the service.  If the recipient refuses to pay for the package the carrier returns it to the sender undelivered.
  
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In accounting terms, when the order is shipped to the recipient, the responsibility to pay resides with the recipient.  Once the carrier has delivered the shipment, the responsibility to pay changes to the carrier.  When payment is received from the carrier, then it is applied to the carrier’s receivables balance.  In this process, we added a “Pending” state to the responsibility of the carrier to pay shipping charges, so that adjustments to the carrier’s payment could be made before it is made official and posted to the ledger.
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===Ledger Entries for COD Payments===
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The ledger entries for COD shipments and receipts are described in the User Guide section, [[Ledger_Transactions_Reference#COD_Shipments_and_Receipts|Ledger Transactions Reference]].
  
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Thus, the accounting transactions are:
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===Accounting Configuration for COD===
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To configuring accounting for COD statements the following setup is needed:
  
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1. Order is Shipped:  
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* A [[Payment Methods|Payment Method]] type of “Paid via COD” is configured to the "Uninvoiced COD Receipts" account, to configure this proceed as follows from the Main Navigation screen:
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<pre>
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Click: [Financials] Icon > [Configure] Tab > [Payment Methods] button
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  DR Accounts Receivable (Recipient),  
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The "Payment Methods for . . ." screen opens
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     CR Sales, etc.
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In the "Add Payment Methods for . . ." box enter the following data
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</pre>
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Enter for "Payment Method Type": [Paid Via COD] from the drop down menu
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Enter for "GL Account": [Uninvoiced COD Receipts], this is account #126100 in the demo data
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    if you have that installed, otherwise find this account in the drop down list. If it
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     is not configured, add the account to your Chart of (GL) Accounts.
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Enter a description such as "COD Statement Receipts"
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Click: [Add] to save your added account.
  
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2. Shipment is delivered:
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* Invoice item types “COD Receipt” is configured to the "Uninvoiced COD Receipts account
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<pre>
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* Invoice item type “COD Fee” is configured to the "COD Fees" account.
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  DR Uninvoiced COD Receipts,
 
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    CR Accounts Receivable (Recipient)
 
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</pre>
 
  
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3. Carrier COD bill is reviewed and approved:  
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NOTE: For Technical System Admins, an example of this configuration can be seen in the XML
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<pre>
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  configuration file which is in the '''opentaps''' server installation directory at this location:
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  DR Accounts Receivable (Carrier),  
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  hot-deploy/financials/data/DemoBillCOD.xml
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  DR COD Fees (Expenses)
 
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    CR Uninvoiced COD Receipts
 
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</pre>
 
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4. Carrier forwards COD payment
 
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<pre>
 
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  DR Undeposited Receipts (or other Cash account)
 
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    CR Accounts Receivable (Carrier)
 
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</pre>
 
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If the recipient of the shipment declines to pay, then the receivable for the shipment remains with the recipient as in #1 above. When the package is returned, it should be processed as a return for “Store Credit”, and the billing account credit should be applied to the outstanding invoice of the recipient.
 
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To configuring acacounting for COD statements, a payment method type of “Paid via COD” be configured to the Uninvoiced COD Receipts account and invoice item types “COD Receipt” and “COD Fee” be configured to the Uninvoiced COD Receipts and COD Fees accounts, respectively. An example of this is found in hot-deploy/financials/data/DemoBillCOD.xml
 

Latest revision as of 15:12, 15 September 2010

Introduction to Accounting for COD

When a package is shipped Cash On Delivery (COD), the carrier will ask the recipient for payment of the value of the package. The carrier will then forward checks from multiple recipients together to the sender with a statement detailing the amount received from each shipment and the fee the carrier charges for the service. If the recipient refuses to pay for the package the carrier returns it to the sender undelivered.

Ledger Entries for COD Payments

The ledger entries for COD shipments and receipts are described in the User Guide section, Ledger Transactions Reference.

Accounting Configuration for COD

To configuring accounting for COD statements the following setup is needed:

  • A Payment Method type of “Paid via COD” is configured to the "Uninvoiced COD Receipts" account, to configure this proceed as follows from the Main Navigation screen:
Click: [Financials] Icon > [Configure] Tab > [Payment Methods] button
The "Payment Methods for . . ." screen opens
In the "Add Payment Methods for . . ." box enter the following data
Enter for "Payment Method Type": [Paid Via COD] from the drop down menu
Enter for "GL Account": [Uninvoiced COD Receipts], this is account #126100 in the demo data 
    if you have that installed, otherwise find this account in the drop down list. If it 
    is not configured, add the account to your Chart of (GL) Accounts.
Enter a description such as "COD Statement Receipts"
Click: [Add] to save your added account.
  • Invoice item types “COD Receipt” is configured to the "Uninvoiced COD Receipts account
  • Invoice item type “COD Fee” is configured to the "COD Fees" account.
NOTE: For Technical System Admins, an example of this configuration can be seen in the XML 
configuration file which is in the opentaps server installation directory at this location:
hot-deploy/financials/data/DemoBillCOD.xml
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