Dealing with customer deposits in Cin7 Core (the right way)

Designing features in the Cin7 Core ecosystem 

I recently published an article sharing our initial experiences with the Cin7 Core App Ecosystem. Building on that, I want to provide a specific example of a project that significantly enhanced the capabilities of system integrators in servicing their clients. Through deliberate consultation with our early Cin7 Partners, we identified key payment workflows that users had been eagerly requesting. Extensive interviews with Cin7 integration partners and B2B users revealed that managing deposits and prepayments was a common yet cumbersome process.

The Challenge

Sellers who customize, manufacture, or import goods often encounter significant lead times from order placement to product delivery, ranging from four weeks to four months. This extended period introduces a substantial risk that the buyers might opt for cheaper or faster alternatives. To mitigate this risk, sellers typically require a deposit of 25%-50% of the total order value.

Traditionally, sellers had no automated solutions to handle these deposits. They would issue a quote, indicate the required deposit, and wait for the buyer to complete a bank transfer, which could take days or even weeks. 

Once the funds cleared, the seller had to manually record the deposit receipt and track it until the final product was ready for delivery and the final payment was made. This is a very inefficient way to operate. It cost more and opens up the business to human error.

Innovative Solutions by Cin7 Core and PencilPay

Cin7 Core is dedicated to building powerful business tools for modern sellers from ordering to inventory to manufacturing. Over the years, Cin7 Cores product has evolved to become a powerful ERP that 3rd party apps can build into to enhance the user experience.

At PencilPay, we made the most of this from a technical perspective, but not before we actively listened to Cin7 Core users and implementation partners. Based on feedback from 50 companies, we developed new features for receiving and tracking deposits and prepayments within Cin7 Core taking into account correct accounting methodology including revenue recognition, recognising bill of materials, GST when taxes apply and more.

These capabilities can be utilized at the quote, order, or invoice stage, making them ideal for businesses that require deposits or down payments before ordering raw materials or releasing goods.

The instructional video below will show you how it works.