On Account payments (or charging account to debtors) are where you provide a product or service to your customers in advance of a payment. This effectively allows the customer to build up a debtor balance with you.

Panacea makes it really quick and easy to apply and use On Account payments and our On Account functionality is, of course, fully integrated with Xero.

On Account payments are recorded against the customer making them. They're similar to a charge-account, where the customer receives the goods or services they want in advance of payment.

A customer can still have an 'on account' balance (i.e. a balance owing for invoices that have been charged to their account) and a prepaid balance. These are two separate things and, although you can use a prepaid balance to pay off 'on account' invoices, they don't automatically cancel each other out.

On Account payments and Prepayments are fully integrated with Xero.

Because of the various accounting practices surrounding debtors, On Account payments can be a bit more difficult to understand in Xero, so it may pay to get a bit of advice on how On Account payments are handled from your bookkeeper or accountant.

In order to use On Account payments they must first be enabled through the client screen.

This is important as not all customers may meet your credit requirements and so this functionality defaults to ‘Cash Only’ payment terms.

To enable On Account payments first navigate to the Personal tab on the Client’s screen and click the edit [pencil] icon. Next scroll down to the Payments box:

Next check the desired boxes and fields to:

Note: If you've set your default payment terms at the clinic settings level, these will already be populated into this field on every client account. By changing this, you will be setting up personalised payment terms for the chosen client.

Once you have saved these terms you will see the On Account terms in the Client’s Personal tab:

Applying On Account payments couldn't be easier. You can do so from the Invoice on the Sales screen (click edit [pencil] icon next to the invoice). Note that ALL on Account payments must be associated with a client. You can only accept On Account payments for a customer if they are enabled for On Account payments.

To apply an On Account payment, simply click on the blue '+' Payment [Credit Card] icon in the top right hand corner of the invoice screen

Next choose the 'On Account payment' from the drop-down list, as illustrated below:

The ‘On Account payment' window will appear, as illustrated above. Simply enter the amount, payment method (On Account), date and time of the payment.

We recommend leaving the date and time as-is (i.e. current date and time) when accepting payments, as it can cause accounting difficulties if you change these.

This is achieved by checking the amount tendered is correct and then apply it by clicking the ‘ON ACCOUNT’ button.

There is the option to receive a combination of payments (e.g. Cash, EFTPOS etc) and apply the outstanding balance as On Account. This is achieved simply by entering the amount tendered then clicking the method of payment for each payment and then clicking the balance remaining as On Account.

The Sale will then record the payment types and balance outstanding (On Account):

Once complete, the On Account balance will also be displayed against the client table on the Client’s personal screen:

Note: This invoice and payment now cannot be edited.

If your Panacea instance is integrated with Xero then all the On Account payments automatically synchronise with it.

The customers will be created in the Xero platform with an outstanding balance that mirrors the outstanding Aged Receivables.

Here are some useful links to our Xero articles:

[Add link to Understanding the Xero integration article - Customer Invoice Synchronisation section]

[Add link to Reconciling Xero transactions' article in the Customer Invoice Synchronisation section]

The outstanding On Account balances (Debtors) are reported in the Aged Receivables report under the Analytics tab.

These can be sorted by Debtor, Due period or Total Outstanding simply by clicking the column header.

Here’s an article on our Aged Receivables (debtors) reports - [add link to the aged receivables report article]

On Account payments can only be charged to the client where the invoice was created. In other words, you can't charge On Account payments belonging to one customer to another customer’s account.

Reversing On Account payments

You cannot reverse On Account payments. You can however Void the transaction which will cancel the payment and the invoice.

See Voiding Sales [add link]

Summary

In summary then, making an On Account payment applies the outstanding unpaid balance to the client's account and changes the invoice status to On Account.

It also syncs to Xero instantaneously, uploads the sale to the aged receivables report and triggers Panacea's alert/notification feature.