Take a computer shop with credit card terminal for example. Sometimes, third party vendors / retailers that do not have credit card machine may borrow the merchant's credit card terminals as they do not have the facility themselves. There are various scenarios, however, we could define the figure and amount in using some variable names, for easy elaboration of the transactions to be performed in order to accurately affect the inventory and accounting records.

We define the terminology as below:

COMPANY-A - The company using Wavelet system

COMPANY-B - The vendor / retailer intending to borrow COMPANY-A credit card machine for its own collection

CUSTOMER-A - The actual customer buying the product or services

SALES-AMOUNT1 - The sales amount charge to the end customer

SALES-AMOUNT2 - The invoice amount of the product for COMPANY-A to bill COMPANY-B

MARK-UP = SALES-AMOUNT1 - SALES-AMOUNT2

CARD-CHARGES - The finance charges incurred while doing the Credit Card transaction

There are 2 types of scenario:

1) COMPANY-A System to show detailed records of  the transaction in Account Receivable with COMPANY-B (more steps)

1-A) Stock sold belong to COMPANY-A

Analysis:

The challenge here is that COMPANY-A does not sell to the customer directly, essentially, COMPANY-A will bill COMPANY-B SALES-AMOUNT2 which is normally lower than SALES-AMOUNT1 (price to end customer), however, customer will swipe their card using COMPANY-A's credit card machine, hence, there is an over payment of the invoice, and COMPANY-A needs to refund this to COMPANY-B.

i) Step 1: Create an Invoice with amount SALES-AMOUNT-2 to COMPANY-B, and select the respective product

ii) Step 2: Create a Debit Note to COMPANY-B, with MARK-UP amount - Click CUSTOMER -> CREDIT MEMO

In this Debit Note, you can credit contraAccount GL Code (or any  other gl code you use for this kind of contra purposes), and debit accReceivable (automatically chosen).

iii) Step 3: Create an Official Receipt under CUSTOMER -> SETTLEMENT

This settlement function allows user to create an official receipt amounting to SALES-AMOUNT1, and knock off the credit memo created in (1-A-ii) and invoice created in (1-A-i).

iv) Step 4: Create another credit note to the COMPANY-B

In this Credit Note, you can debit contraAccount GL Code (or any other gl code you use for this kind of contra purposes), and credit accReceivable (automatically chosen). Do not forget to credit "financeCharges" also, because COMPANY-B is absorbing the finance charges.

v) Step 5: Create a Payment Voucher under FINANCE -> PAYMENT VOUCHER

As COMPANY-A may be using a different bank account other than the bank account linked with the credit card machine to issue cheque, user can select the respective cash book, and use this Payment Voucher to knock off the Credit memo created in (1-A-iv), amounting to MARK-UP - CARD-CHARGES figure.

Note, to knock off this credit memo, click on the "Customer credit memo" while issuing the payment voucher.

1-B) Stock sold belong to COMPANY-B

Analysis:

Since the stock belongs to COMPANY-B, and COMPANY-A is only providing the credit card machine facility to COMPANY-B, hence no invoice is issued. If COMPANY-A, would like to keep assume buying the stock from COMPANY-B, and then sell it back to COMPANY-B with invoice, they can do it also, just to have a record of the transaction.

i) Step 1: Create a Debit Note to COMPANY-B, with SALES-AMOUNT1 amount - Click CUSTOMER -> CREDIT MEMO

In this Debit Note, you can credit contraAccount GL Code (or any  other gl code you use for this kind of contra purposes), and debit accReceivable (automatically chosen).

ii) Step 2: Create an Official Receipt under CUSTOMER -> SETTLEMENT

This settlement function allows user to create an official receipt amounting to SALES-AMOUNT1, and knock off the credit memo created in (1-B-i)

iii) Step 3: Create another credit note to the COMPANY-B

In this Credit Note, you can debit contraAccount GL Code (or any other gl code you use for this kind of contra purposes), and credit accReceivable (automatically chosen). Do not forget to credit "financeCharges" also, because COMPANY-B is absorbing the finance charges.

iv) Step 4: Create a Payment Voucher under FINANCE -> PAYMENT VOUCHER

As COMPANY-A may be using a different bank account other than the bank account linked with the credit card machine to issue cheque, user can select the respective cash book, and use this Payment Voucher to knock off the Credit memo created in (1-A-iv), amounting to SALES-AMOUNT1 - CARD-CHARGES figure.

Note, to knock off this credit memo, click on the "Customer credit memo" while issuing the payment voucher.

2) COMPANY-A system does not need detailed and accurate records of transaction with COMPANY-B (less steps)

2-A) Stock sold belong to COMPANY-A

Analysis:

The challenge here is that COMPANY-A does not sell to the customer directly, essentially, COMPANY-A will bill COMPANY-B SALES-AMOUNT2 which is normally lower than SALES-AMOUNT1 (price to end customer), however, customer will swipe their card using COMPANY-A's credit card machine, hence, there is an over payment of the invoice, and COMPANY-A needs to refund this to COMPANY-B.

In the transaction flow below, we assume COMPANY-A sell the product at full price to CUSTOMER, and pay COMPANY-B a commission (the MARK-UP - CARD-CHARGES).

i) Step 1: Create an Invoice with amount SALES-AMOUNT1 to COMPANY-B, and select the respective product

ii) Step 2: Create an Official Receipt under CUSTOMER -> SETTLEMENT

This settlement function allows user to create an official receipt amounting to SALES-AMOUNT1, and knock off the  invoice created in (2-A-i).

iii) Step 3: Create a Payment Voucher under FINANCE -> PAYMENT VOUCHER

As COMPANY-A may be using a different bank account other than the bank account linked with the credit card machine to issue cheque, user can select the respective cash book, and use this Payment Voucher to pay to COMPANY-B. Use the "Add Expenses" section to indicate it as "commission" or some other type of expenses.

2-B) Stock sold belong to COMPANY-B

Analysis:

Since the stock belongs to COMPANY-B, and COMPANY-A is only providing the credit card machine facility to COMPANY-B, hence no invoice is issued. If COMPANY-A, would like to keep assume buying the stock from COMPANY-B, and then sell it back to COMPANY-B with invoice, they can do it also, just to have a record of the transaction.

Since COMPANY-A may make take a small cut out of providing this credit card machine facility to COMPANY-B, when creating the Receipt Voucher and Payment Voucher below, user can use one of the GL Code like (otherRevenue etc).

i) Step 1: Create a receipt voucher under FINANCE -> RECEIPT VOUCHER

The amount of the receipt voucher should be SALES-AMOUNT1 - CARD-CHARGES, because that's the net amount COMPANY-A would receive.

Choose "otherRevenue" (create it if it does not exist, or name your own GL Code).

ii) Step 2: Create a Payment Voucher under FINANCE -> PAYMENT VOUCHER

As COMPANY-A may be using a different bank account other than the bank account linked with the credit card machine to issue cheque, user can select the respective cash book, and use this Payment Voucher to pay the net amount to COMPANY-B. Typically SALES-AMOUNT1 - CARD-CHARGES  or lower.

Must use the same GL Code as 2-B-i