Deposits are an amazing way to reduce no-shows and help with cashflow through your business, but it can be unclear what money should be treated as revenue and what should be a customer credit.
We’ve released an upgrade to make this easier. You can now treat deposits as customer credit. Making the change will mean:
- Deposits will be counted as customer credit instead of as a sale
- No invoice will be created until the point the customer checks out
- The deposit will automatically be added to the invoice
- There’s a much clearer way to claim deposits for cancellations
- It’s much easier to take deposits for appointments that you make in store
- There will be no changes on the client’s side to how they pay deposits
This document will cover:
How to change over to deposits as credits
Changing to the new deposits process is incredibly easy.
- Go to Setup > Online payments
- Scroll down to the Online payment terms section
- Tick the box that says 'Take online payments as customer credits'
- Click 'Save'
Tips for changing over
- To help keep a track of which deposits are treated in the new way, you might want to plan to switch over at the beginning of a month or another easy to remember date so that you know any deposits taken from that point forward will have been processed as credits.
- Once you have changed over, take your staff through the new checkout process and make sure they can identify:
- How to identify both sorts of deposits on the calendar
- How to check out appointments with both sorts of appointments
You may want to have a play with the new processes outside business hours to make sure all your staff are confident about how to proceed.
How changing over might affect your business
If you’re currently taking payment for services booked online you’ll be doing one of these two things:
- Updating your invoices when a client is checked out - When a client who has paid a deposit is checked out, you are currently changing the date on the invoice to the date that the service was performed, and updating the invoice to reflect the actual services and staff who performed them on the booking date, if different to what was initially booked in
This is what my business is doing - Not making any updates to invoices - When a client who has made a deposit is checked out you process the sale unchanged under the original invoice so that the sale is marked against the date the appointment was made.
This is what my business is doing
If you’re currently updating your invoices, here’s what you need to know:
The new process will mean you no longer need to update anything manually in order to have your invoices reflect the appointment details. However, the change will only impact bookings going forward. Any bookings that have already had a deposit made against them will need to be processed in your old way. This means that you will be using two processes for a short period of time. Don’t worry, it will be very clear which appointments need to be checked out in which way.
On the Calendar
Appointments with deposits still being treated the old way on the calendar:
Appointments that have had a deposit added to them in the old way will have an invoice already open. You’ll need to open the invoice to add the rest of the payment to the sale.
Once you’ve opened the invoice you can edit the invoice date to reflect the date of the appointment and check that the services provided match with what is on the invoice.
You can then apply the rest of your payment
Appointments with the new credit process on the calendar:
Appointments that have had a deposit taken in the new way (as a customer credit) will show the value of the deposit paid in the appointment pop out, and give you the option to check the client out directly. There's also a new cash symbol on the appointment to show a deposit has been paid.
Here’s how the two appointments will look next to each other on the calendar. You can see the top appointment has the new cash symbol to quickly see that a deposit has been paid. The second appointment which was booked using the old deposit process has the invoice symbol to show that an invoice is already opened for the appointment.
Checking clients out
When you click checkout a new sale will be created with the deposit automatically added:
And on the invoice, you’ll see the deposit clearly marked
While you still have deposits the old way you'll need to use both checkout processes in tandem, depending on how the deposit was taken. This should only be for a few weeks. The older process will be phased out fairly quickly as your clients book using the new deposits process.
Reporting
All your reporting will look the same after you have checked the client out, however there will be some differences when looking at reports for appointments booked in the future. For bookings in the future the value of the deposit will now show in your customer credit report (where it used to show the whole value of the booking in your sales report.)
The cash coming into your business will stay exactly the same but this will make it much easier to see what in your bank account is money earned and what is liabilities.
If you’re not making any changes and want to move to the new way of taking, here’s what you need to know:
Where in the past invoices for sales with deposits were reported against the date that the booking was made, the invoice will be created and recorded against the date that you check the client out. So for example, if a client books today for an appointment next Monday, the sale will be logged next Monday after you check them out rather than today.
When you make the update it will only change the way new deposits are taken, so any existing deposits in your system will have an invoice created in the old way ie dated when the booking was made.
This means that for a short period of time you will have two different deposit processes running at once, and consequently have invoices being reported on differently. Here’s how you’ll know which appointments are being check out the new way, and what to do for each.
On the calendar
Appointments booked using the old deposit process as viewed on the calendar:
They will have an invoice already open. You’ll need to open the invoice to add the rest of the payment to the sale.
Appointments with the new deposit process of as they appear on the calendar:
Appointments that have had a deposit taken in the new way (as a customer credit) will show the value of the deposit paid in the appointment pop out, and give you the option to check the client out directly. There's also a new cash symbol on the appointment to show a deposit has been paid.
Here’s how the two appointments will look next to each other on the calendar. You can see the top appointment has the new cash symbol to quickly see that a deposit has been paid. The second appointment which was booked using the old deposit process has the invoice symbol to show that an invoice is already opened for the appointment.
Checking clients out
When you click checkout a new sale will be created with the deposit automatically added.
And on the invoice you’ll see the deposit clearly marked
While you still have deposits the old way you'll need to use both checkout processes in tandem, depending on how the deposit was taken. This should only be for a few weeks. The older process will be phased out fairly quickly as your clients book using the new deposits process.
Reporting
The change means that money that you were counting as profit is now being counted as a customer credit (a liability) and won’t show up in your sales reports until you check the customer out.
The value of your transactions will remain the same, but you may notice it appears that your sales seem to drop during this time, while your customer credit report will show a higher value. This will balance out once you have fully transitioned into the new process.
If you would like to speak to one of the team about your specific setup or any individual reports please don’t hesitate to get in touch with our support team at [email protected].