NetSuite Customer Deposits : When and How to Use Them

Have you ever had to deal with the complexity of tracking down payments upfront or struggled with reconciling customer deposits? Most Accounts Receivable teams have heard ‘But we already paid for that!’ a time or two.

If these are familiar struggles then take a look at the NetSuite Customer Deposits feature.

NetSuite Customer Deposits allow you to collect payments from customers in advance of delivering goods or services. When managed well, this feature can help you streamline your revenue collection process and improve cash flow management.

In this article, I’ll guide you through everything you need to know about NetSuite Customer Deposits – from understanding their purpose to mastering the process of recording and applying them within your NetSuite account.

What is a Customer Deposit in NetSuite?

A customer deposit is a facility for recording a prepayment made by a customer before the order is delivered.

The deposit is recorded as a liability rather than affecting the accounts receivable subledger.

Once the order is completed and billed, the deposit amount can be applied to the relevant invoice and the liability removed.

If the order is never delivered and the deposit needs to be returned, it can be refunded using the Customer Refund process.

NetSuite Customer Deposits are recorded with one of three statuses.

Unapproved PaymentThis status means that the deposit has not been successful. Possible reasons for this status include insufficient funds in the account, or the card used for the payment is reported lost or stolen.
Not DepositedThis is a successful status, the deposit is being processed but the funds have not yet been deposited.
DepositedThis status is applied when the funds have been deposited.
An extract from Oracle Help Center article Recording a Customer Deposit

How to Record a Customer Deposit in NetSuite

You can record customer deposits in one of two ways. Either from the relevant Sales Order or via a specific Customer Deposit Page.

Record a Customer Deposit from the Sales Order

If there is a Sales Order for the deposit that is being received, the customer deposit can be generated from it directly.

Eligible Sales Order transaction forms will show a Create Deposit action button after saving.

A screenshot showing where to find the Create Deposit button on the NetSuite Sales Order.
Only unbilled Sales Orders will show the Create Deposit button. You cannot create a deposit this way retrospectively.

Once the Deposit form loads, populate the following fields:

  • Date – The date the funds were received.
  • Account – The account the funds have been received in to. If the deposit has not yet cleared then you can select Undeposited Funds.
  • Currency – The currency of the payment.
  • Exchange Rate – The exchange rate from the the subsidiaries base currency.
  • Amount – The amount in the transaction currency.

Now Save the record.

Bear in mind that deposits created in this way can only be applied to invoices generated from the Sales Order in question.

Once the invoice is raised, the deposit will be automatically applied.

Using the Record Customer Deposits Page

If you want to record a standalone deposit for a customer, navigate to Customers > Accounts Receivable > Record Customer Deposits.

Once the Deposit form loads, populate the following fields:

  • Date – The date the funds were received.
  • Customer – The customer that has made the deposit.
  • Account – The account the funds have been received in to. If the deposit has not yet cleared then you can select Undeposited Funds.
  • Currency – The currency of the payment.
  • Exchange Rate – The exchange rate from the the subsidiaries base currency.
  • Amount – The amount in the transaction currency.

Now Save the record.

The Customer Deposit form in NetSuite

Applying a NetSuite Customer Deposit

If a customer has made a deposit then at some point an invoice will be raised that the deposit needs to be applied to.

If the deposit was posted against a Sales Order then the deposit can only be applied to invoices generated from that Sales Order. The deposit will be automatically applied when the invoice is raised. If it is a standalone deposit on the customer account then it can be applied to any invoice. This is a manual process.

You can apply deposits from the Accept Customer Payment page, in the same way that you would apply any other payment.

Navigate to Customers > Accounts Receivable > Accept Customer Payments > List. Select the customer and currency. Bear in mind the currency selection will dictate which invoices and deposits are visible.

Under the Apply subtab you will see a list of deposits. Under the Invoices subtab you will see a list of invoices. Check the box in the Apply column next the Invoice and Deposit you want to match.

A screenshot of the subtabs on the Accept Customer Payment page demonstrating how to apply a NetSuite Customer Deposit

Before saving, check your total Applied and To Apply amounts to ensure you have applied the amount in full. If the amount being applied is only partial then adjust the Amount column for the invoice to match the deposit.

The process of applying deposits and payments is described in greater detail here.

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