Sales Order Cancellation Fee


(Mitchell) #1

Hi,

Has anyone had luck creating a method for charging customers a cancellation fee? A little info on the business case, the cancellation fee would be for sales order do that do not end up shipping. However, the fee should be linked to the sales order line that was cancelled (my thought is to manually close the line but keep the part, quantity and price intact). I have explored using an AR misc. invoice but have found this to be somewhat cumbersome.

Thanks,
Jason


(Aaron Moreng) #2

Not Epicor related, but probably a waste of time to try and actually recover the AR for this. Just a thought…


(Nancy Hoyt) #3

We use a line on a sales order because finance prefers the accounting this way. The line does need to get shipped and then AR invoices uses “get shipments” to bill. The part “Cancellation Charge” is setup as non-quantity bearing and purchased.

Nancy


(Mike Watkinson) #4

We do it the same way that Nancy mentioned. I have a few generic sales parts set up for stuff like this. Non-Qty bearing. You may need to do something with the Job if it’s a make direct line. This also wont be lined to your order line, but will be on the same order which is close enough for us but may not be for you. If you report on orders I would consider that also if the fees are substantial. We use the sales order bookings and monitor it closely. When you manually close the line, it creates a negative entry. Add the Cancellation Charge line and you get a positive entry. Misc. Charges don’t count. Same for misc. invoice.

@Aaron_Moreng it really depends on what they are selling. We collect on 100% of our cancellations fees. We also sell large custom items, to repeat customers, that have some post order engineering and long lead time purchased components we can’t return or use in the next 5 years.


(Mitchell) #5

Thanks for the advise. I have done some preliminary testing with adding a cancellation fee line. However, I am running into two issues with this method.

  • The first is that we pay rep commission for all bookings/sales and would not want to pay a commission for a cancellation fee.
  • The second is with assigning a different GL Control/Account to the part and seeing it on the invoice edit list (a finance requirement and will help to avoid paying commission). I would want these charges classed differently and posting to a unique GL Account. When I set up the part I added the new GL Control with a unique “cancellation fee” GL Account and create a Product Group that has no GL Control. But I think I am bouncing up against posting rules within the Customer Group/Sales Category.

That said, I was able to post the invoice to the cancellation fee GL Account by creating a misc. charge with that GL Control account. I closed the sales order line (correcting bookings) then created a misc. invoice, associated the misc. invoice to the sales order line that was cancelled and added the cancellation miscellaneous charge.

Yes, the selling we do is custom work or made to order. The cancellation fee would kick in if we have already purchased unique components or began manufacturing the finished part. This would be a policy known by the customer.

Thanks for the help!