Loading

Customers, Tax Codes and Intercompany

The customer master holds who you sell to and on what terms: currency, payment terms, credit limit, tax treatment, billing contact and addresses. Two fields added in October decide how services are taxed and mark a customer that is really one of your own group companies.

Where to find it

Admin Panel → Sales:

  • Sales — the Customers tab: search, create and edit customers, see their open balance and recent documents

Admin Panel → Receivables:

  • Receivables — the same Customers tab, where credit terms are set

Architect Panel → ERP - Sales:

  • Customers — the customer datastore; the badge counts customers on stop

Architect Panel → ERP - Reference Data:

  • Customer Classes — Retail, Trade, Strategic and your own classes, used for class pricing and reporting

Creating a customer

  1. Open the Customers tab and press New customer. The form has five sections: Who they are, Trading terms, Billing, Delivery address and Notes.
  2. Enter the Customer code (unique; this is what the sales ledger, statements, ageing and reminders carry) and Name.
  3. Choose the Company. ERP administrators and Finance can also choose Shared by every company for a customer every company trades with.
  4. Set the Customer class, Account manager (new documents take them as salesperson, and commission is accrued to them) and, if they trade electronically, the EDI trading partner.
  5. Under Trading terms set Currency, Payment terms (days) and the tax codes described below.
  6. Under Billing, the Billing e-mail (invoices, statements, reminders) is where every e-mailed invoice, statement and reminder goes.
  7. Press Save the customer.

Credit terms belong to Accounts Receivable

Credit limit, On stop - orders refused, Stop reason and Never send payment reminders can be changed only by holders of ERP: Receivables or ERP: Finance. A salesperson sees the credit position but the fields are read-only, with a note saying who sets them. Putting a customer on stop always needs a reason, which is shown to whoever is then refused. See Receivables & Dunning for credit control.

Tax codes on sales lines

  • Default tax code: when set, every line on the customer's documents uses it instead of the item's own sales tax code. Use it for an export, EU reverse-charge or tax-exempt customer.
  • Tax code for services (optional): when set, a line for a service item, or a line with no item at all (project billing, a typed charge), uses this code instead. This is for regimes where the customer's location sets the rate but the item decides whether it is taxable, such as US sales tax on professional services. Leave it blank to use the default tax code for every line.
  • With neither set, each item's own sales tax code decides.

Tax codes themselves are maintained by Finance; see Tax Codes and VAT Box Mapping.

Intercompany customers

When a customer is itself one of your group companies, choose that company in Is one of our group companies (on the datastore, the field is Group Company). Leave it at No - an outside customer for everyone else. Consolidation and the intercompany views read this link to find trade within the group, instead of guessing from customer codes or names. It is offered only when your group has more than one company.

Editing customers outside the console

A customer created or edited on the Architect Panel's Customers list, the record screen, the API or an import is held to the same rules as the console: the code must be unique, currency, terms, credit limit, e-mail and country codes must be valid, credit terms can be changed only by Accounts Receivable or Finance, a stop needs its reason, and a customer with sales documents cannot be deleted. Make an unused customer inactive instead: it keeps its history but no new quotes or orders can be raised for it.

What goes wrong

  • The credit fields are greyed out: you hold ERP: Sales only. Ask Accounts Receivable.
  • A customer cannot be deleted: it has sales documents. Untick Active - can be sold to.
  • A US services invoice carries sales tax: the customer's Tax code for services is blank, so the default code was used. Set an exempt code there.
  • Statements and reminders are not e-mailed to a customer: their billing e-mail is empty.

Worked example

A UK group sells consultancy through its US company to a New York customer whose goods are taxed at the local rate. The sales administrator sets the customer's Default tax code to the New York rate and its Tax code for services to an exempt code. An invoice with one hardware line and one consultancy line now taxes the hardware and not the consultancy. The same administrator records the Dutch subsidiary's customer account for the UK parent with Is one of our group companies set to the UK company, so the sale appears in the intercompany views at month end.

Recommendations

  • Agree customer codes before go-live; they appear on statements and in the ledger.
  • Fill in the billing e-mail for every customer you invoice electronically.
  • Set Tax code for services wherever services and goods are taxed differently.
  • Link every intercompany customer to its group company.
  • Deactivate rather than delete.