About payment reservation for sales orders

You can streamline your processes by entering a customer prepayment or a payment intended for a particular order directly by using the Sales orders (SO301000) window.

On the Payments tab of the window, you can click Create payment or Create prepayment to enter a payment or a prepayment, respectively.
A prepayment or payment can be for a full amount or a partial amount.
You can later create an additional payment for the balance or link the order to an existing payment or existing payments.

Also, you can link a new order to existing prepayments or payments by selecting the available customer prepayments or payments by their reference numbers on the Payments tab.
Moreover, you can reserve payments with balances that were already applied to unrelated invoices in the Supplier ledger workspace.

When you enter a customer prepayment or payment in the Customer payments (AR302000)window in the Customer ledger or Inventory workspace, you can link it directly to a particular order or multiple orders by using the Orders to apply tab.
The payments with balances that have been partially applied to invoices can also be reserved for sales orders.

For customers who pay by credit cards, you can create a payment, link it to particular sales order or orders, and charge the credit card by using the same Customer payments (AR302000)window.

An order with a payment linked is processed in the same way as any other order is.

An order can be fulfilled by one or multiple shipments: first shipments are created and confirmed, and then invoices are generated and released.

An order can be edited until it is Open.
If no invoice has been generated for the order, you can cancel payment application by removing the reserved payment from the list on the Payments tab of the Sales orders (SO301000) window.

Once any amount applied to an order has been transferred to the invoice generated for the order, you can view the history of application on the Application history tab of the Customer payments (AR302000)window, which is available in both the Inventory workspace and the Customer ledger workspace.
As orders linked to this payment are being shipped and completed, you will see on the Application history tab the list of applied invoices (generated for those orders) as it is populated.

Consider a simple scenario when a full-amount payment was reserved for an order.
Once the order has been shipped and an invoice has been generated and released, the payment amount is applied to the invoice and the invoice gets the Closed status.
The payment amount that was applied to the invoice is shown as Transferred to invoice.
The order gets the Completed status.

If an order with a full-amount payment linked was shipped partially and then has been completed or cancelled, its unapplied balance is reset to zero while the payment with unapplied balance has the Open status and its applied amount is shown as Transferred to invoice.

There may be many variations of this scenario: multiple shipments (and multiple invoices) for the order, multiple payments reserved for one order, or multiple orders paid by one prepayment.
If the order is being shipped in multiple shipments, you can track how the payment's partial amounts was applied to multiple invoices.

On release of invoices, the system applies the payments (in the amounts reserved for orders) to invoices, and if the amount of payments is equal to the order total, the invoices get the Closed status.
If the total amount of payments (applied to orders) is less than the order total, one of the invoices is given the Open status with the balance that is equal to the difference between the order total and the payments' total.
Some of the linked payments may be applied to an order partially and also applied to unrelated invoices.