A vehicle deposit with the balance from a finance house
How a dealer records a buyer's deposit and the finance house's payout against one vehicle invoice, and what to do when finance is declined.
By Achekam · · 5 min read · For Automotive businesses in South Africa, Nigeria, Kenya
Most used and new vehicles leave a dealership paid for by two people. The buyer puts down a deposit, often by transfer on the day the deal is signed. The rest comes later from a bank or finance house, straight into the dealer's account, once the finance agreement is approved and the paperwork is complete.
In the books that is one sale and two payments, received days or weeks apart, from different payers. And sometimes the second payment never comes, because the application is declined. This article sets out a way to record each step in Achekam so the vehicle, the deposit and the finance house's payout always tie up.
One vehicle invoice, two payers
Start from a simple rule: one vehicle, one invoice. The invoice carries the full selling price, and both payments are allocated against it.
Achekam lets you record customer payments against a single invoice or spread across several, and a part payment leaves the invoice part-paid. That is exactly the state a financed sale should be in between the deposit and the payout: issued, with the deposit applied and the balance waiting.
Check with each finance house which name it expects on the invoice and how it wants its reference quoted. Some want the buyer's name with the finance agreement number in the reference; whatever they ask for, use it every time, because that reference is how you will recognise their payment later.
Taking the deposit when pro-forma invoices are not offered
Many dealers like to send a pro-forma first. Achekam does not offer pro-forma invoices, so plan for that.
The cleanest route is to create the invoice when the deal is signed. You can prepare it as a draft, which you can still change or delete, and issue it when the deal is final. Issuing takes the next number in your sequence and posts debtors, sales and output VAT to the ledger. Then record the deposit as a part payment against it. If the buyer pays the deposit online, you can create a payment link for the issued invoice and e-mail it with the invoice.
Some dealers prefer not to issue the invoice until the vehicle is delivered. If yours does, agree with your accountant where the deposit sits in the meantime and how it is cleared once the invoice exists, because the timing of the invoice also decides when sales and VAT are recorded. That is a decision to make once and apply to every deal, not case by case.
Recording the finance house's payout
When the finance house pays, record its payment as a second receipt against the same invoice. The invoice moves from part-paid to paid, and your debtors balance for that buyer clears.
If the payout does not match the balance, stop before allocating it. Find out why from the finance house's settlement letter: a different agreed price, an extra the buyer added, or a fee. Allocate only what belongs to this invoice, and keep the settlement letter with the deal file. If more arrives than the invoice needs, the extra is held on the customer's account rather than lost.
When finance is declined
A declined application turns a sale back into a refund. Work through it in this order:
- Issue a credit note from the vehicle invoice, in full. A credit note is always issued from the invoice it corrects, and it posts to the ledger.
- The deposit now shows as credit held for the customer.
- Decide with the buyer whether the deposit is refunded, kept for another vehicle, or partly kept under the deal's cancellation terms.
- An administrator can refund or reverse the receipt in Achekam; make the actual payment back to the buyer from your banking.
For South African dealers, section 17 of the Consumer Protection Act deals with deposits on orders and what a supplier may keep when a consumer cancels; the Acts Online text of section 17 sets out when a reasonable deposit may be taken and what cancellation charge may be kept. Nigerian and Kenyan dealers should check their own consumer rules and the wording of their offer to purchase.
Refunding a deposit that was paid online
If the buyer paid the deposit through the invoice's pay link, Achekam does not send the refund through the payment gateway. The refund is made in the gateway's own dashboard, and a person then records it in Achekam. Do both on the same day, so the gateway's records and your receivables never disagree overnight. For the wider picture of refunds and cancellations in another industry that lives on deposits, see refunding cancelled travel bookings.
Matching both payments on the bank statement
Import the bank statement and match its lines. Achekam suggests matches and a person accepts each one; a line not yet in the books becomes a suggested journal that a person approves.
One trap: matching a bank receipt to a customer invoice does not record the payment on the invoice. The deposit and the payout must each also be recorded in receivables, or the invoice will still look unpaid while the bank looks right. A short checklist for each financed deal:
- deposit recorded against the invoice and matched on the bank statement;
- finance house payout recorded against the same invoice and matched;
- settlement letter and signed deal filed together;
- invoice showing paid, with nothing left on the buyer's account.
Payments by transfer at the service desk follow the same discipline, which bank transfers at the service counter covers. And if you also deal with conveyancers or other third parties who pay on a client's behalf, commission paid by the conveyancer shows the same two-payer pattern in property.
The next deal
Write your dealership's version of this routine on one page: when the invoice is issued, how deposits are taken, what reference each finance house uses, and who handles a declined application. Then test it on the next financed sale from deposit to payout.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
