Here we’ll discuss what a Netted Payment-Type Transaction is, and how you can utilize it for your company. For the more detailed steps of posting any type of “Payment” (regardless of the exact type), please see our article on Posting a Payment-Type Transaction.
We will cover what is available, however depending on your business model, you may not use this type of payment, or you may use it in a different way. Feel free to re-purpose the functionality as you see fit.
What is it?
A Netted Payment-Type Transaction is similar to a normal Payment-Type Transaction, in the fact that you (the agency) are receiving money to pay down a balance due on an account.
However, where the Payment-Type Transaction is often paid from the individual who owes the money (debtor), a Netted Payment-Type Transaction often comes from another entity who may have collected the money for you, for example, an attorney.
The term Netted simply means you (the agency) have “netted” a specific amount (X) from a total amount collected (Y), because the other entity (in our example, an attorney) kept a portion for themselves as a commission (Z).
- An agency named Simplicity Collections has a debtor named John Doe who owes them $100.
- The agency is working with an outside attorney named Attorney Sally Sue.
- Miss Sally Sue spoke with John Doe and got him to pay the full $100 to her. She has a commission agreement that she gets to keep 20%. Because of that, she takes $20 of the total, and sends Simplicity Collections the other $80.
- Simplicity Collections wants to update John Doe’s account with them, and puts in a Netted Payment showing John Doe paid $100, but they netted $80.
- Now for John Doe, he sees on his statements that he paid the full $100. And for Simplicity Collections, their reports show they netted $80 (which they can now remit a portion to their own client, if they are a 3rd party collections company).
How do you set up a Netted Payment?
By default, we supply you with several “stock” transaction descriptions under Financials > Transactions that you can choose from when posting a payment. However, they are all normal Payment-type Transactions, and no Netted ones exist yet.
You will have to go to Financials > Advanced at the top right-hand corner, and create a brand new description:
Once you click Insert New, this description will be available on Financials > Transactions. You can then select it from the drop down list, and put in the necessary information:
Click Insert Transaction and the new Netted Payment will appear in the list like normal, but with a new column for “Netted”.