the CRM allows you to set up flexible billing arrangements using Parent-Child or Third-Party relationships between Company records in your system.
You can gain greater control over invoicing and sales by assigning unique payment responsibilities that cater to more complex company relations.
Parent-Child or Third-Party relationships can be set-up to simplify the following scenarios:
This is useful when you deal with companies that have different locations or branches and a head office – e.g. Bunnings Hardware has a head office, as well as various store locations around Australia. This type of relationship is based on ownership i.e. the Parent record ‘owns’ the Child records.
This type of relationship is based on an association between companies, rather than a hierarchy of ownership. Facilities management contracts are a good example of this – a customer may have work done on their office, but the invoice for work would need to be sent to their strata management, rather than the customer.
A Parent Company can have many Child Companies where the Parent ‘owns’ the Children. This type of relationship is different to a Third-Party one, which is based on an association, rather than ownership.
For every Child record, you have two options you can enable:
- Invoice to Parent: if you convert a Sales Order, the Invoice will be generated and sent to the Parent Company
- Sales Order to Parent: if you convert a Quote to a Sales Order, the order gets sent to the Parent Company
Using the Bunnings Hardware example above, if we had a Parent Company record for “Bunnings Head Office” and Child Company record for a store location “Bunnings Chatswood”:
- If you created a Sales Order for “Bunnings Chatswood”, it will show on the Child Company record for the store location.
- When the Sales Order is converted to an Invoice, the Invoice will be sent to the Parent Company “Bunnings Head Office” on behalf of the Child Company “Bunnings Chatswood” and the Invoice would be visible on both Company records i.e. Parent and Child records.
For accounting purposes, the invoice will go to the Parent record i.e. “Bunnings Head Office” when it is exported to MYOB or Xero.
Third-Party relationships are based on the same concept as Parent-Child relationships, but in this case, invoices would go to a third-party company that is related by association, rather than ownership e.g. you may want to send a Sales Order to one customer and then Invoice a different customer for the order.
Using the facilities management contract example above with a customer and their strata management, neither business owns the other as part of a hierarchical structure – their relationship is based on a contract.
When you create this type of relationship, you specify on a Company record that the business bills via a third party and nominate the third-party Company to use for billing purposes.
For accounting purposes, the invoice will go to the selected billing third-party company (i.e. the strata management company in this example) when it is exported to MYOB or Xero.
Please note that neither MYOB or Xero currently support hierarchical account structures (i.e. parent-child or third-party) – this is only available within your CRM.
For this reason, you won’t be able to work with your CRM relationships in MYOB or Xero e.g. generate a statement from your accounting system to show a breakdown of branch billings for a head office-branch (parent-child) relationship in CRM.
To enable either of these relationship types so that the applicable fields are visible in your system:
- Head to the Main Menu> Admin> General and scroll down to the Invoice Settings section.
- Check the required boxes beside Use Third Party Billing and/or Use Parent Child Accounts.
- Make sure you click on Save at the top of the page to apply the changes to your system.
To create a Child Company:
- Create a new Company record.
- Select an existing Parent Account (i.e. a Company record) to link it to.
- Choose whether Invoices should be sent to the Parent.
- Choose whether Sales Orders should be sent to the Parent.
You can also link a Child Company from a Parent Company record:
- Open the existing Company record that you want to be the Parent.
- Go to the Child Accounts tab and click on Create Child Account.
- You will then be taken to fill in a new Company record for the Child.
To create a Third-Party relationship:
- Open a Company.
- If this Company will bill on behalf of another Company (for example, if it is a reseller or strata manager), tick the Bills on Behalf of Third-Parties box.
- If this Company’s billing will be via a third party (the Company is the end customer) tick the Billing Via a Third Party box.
- A field will then appear beneath this box – you need to select the existing Company record that will act as the third-party for billing.