Applying NetSuite Sales Order Customer Deposits on Independent Invoices

This article is relevant if you are an accountant using NetSuite and you are having trouble applying a customer deposit to an open invoice.


I like NetSuite customer deposits as they setup monies on accounts that can be used for subsequent payment on future invoices.  In my work with clients, this feature seems to not be well known or understood.  Sometimes, in our integration work to third party eCommerce systems, we will use the Customer Deposit feature to track credit card orders that were Authorized and Captured before they ship.  This way, we track a customer deposit liability until we ship the goods which appropriately reflects accrual accounting.  In our work with Bitcoin processing, the customer deposit feature is extensively used.

The key to getting the most of this transaction type is to understand the optional connection of a sales order to a customer deposit.

Sales Order Connection to Customer Deposit

Sometimes customers provide deposits and they only want the funds to be applied to specific commitments.  By linking a customer deposit to a sales order, only invoices generated from the respective sales order can participate in a deposit application.    I love the feature where invoices will get automatically paid by any deposits amount outstanding if they are linked to sales orders.  Consider an organization, such as an attorney, who accepts retainers as a regular practice.  As professional fees are earned, as recognized via invoicing, the retainer is automatically applied as the invoice is created.  Customer invoices can reflect this deposit application helping all parties understand the current retainer position.

How to Apply a Customer Deposit to an Unlinked Invoice

You might encounter a situation where you need to apply a customer deposit to an invoice that was generated on a different sales order (or perhaps without a sales order at all). ¬†You won’t be able able to apply an open deposit to those invoices. ¬†This may be alarming at first glance because you will swear you know monies are on account. ¬†What do you do?

The trick to solve this problem is to close the linked sales order temporarily.  Once the sales order is closed, the customer deposit then can be applied to other non-related invoices.  After you have applied the deposit to non-related invoices, you can reopen the Sales Order and continue with your item fulfillment and invoice work.

Get More out of NetSuite

Most people who know me will speak about my passion for NetSuite. ¬†The platform reflects some of the best implementation architecture I have worked with in my 25+ years doing ERP & CRM work. ¬†If you would like to work with a high caliber professional team of consultants that are NetSuite experts, let’s have a conversation.


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Marty Zigman

Holding all three official certifications, Marty is Southern California's NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 25 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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